Warehouse Group dumps Diners Club
The Warehouse Group (TWG) is quitting the New Zealand franchise of Diners Club, which it bought in 2014 for $3 million.
Members have been sent letters explaining that Diners Club (NZ) will stop issuing cards and membership will be discontinued from the end of December.
About 50 employees may be affected but a TWG spokeswoman declined to reveal the number of cardholders due to commercial sensitivity.
A cardholder, Kevin Bell, said he was disappointed because it had been a useful tool in his wallet for about 30 years.
‘‘It was great for international travel, with free access to Strata Lounge at Auckland Airport ... They appear to be playing the wind-down by the book. They will refund the unused portion of the annual fee,’’ Bell said.
The letter from TWG chief operating officer Mark Yeoman asked Diners Club cardholders to pay balances or contact the company to arrange repayment.
All rewards redemptions should be made before the termination date or they will expire. Club members will also need to cancel any automatic payments.
According to TWG’s spokeswoman, international travellers will still be able to use their cards in New Zealand shops.
The staff affected by the closure were being offered a proposal that might see some re-deployed elsewhere in the business.
The New Zealand franchise was described as ‘‘loss-making’’ when The Warehouse bought it from the owner of Diners Club, Johan Holdings of Malaysia.
Johan has also stopped issuing cards in Malaysia, although the cards appears to be in widespread use in many other countries.
Within three years of buying the franchise TWG changed tack and sold out of its main financing business, which was also making losses, to SBS Banking Group.
That deal did not include Diners Club.
According to rating agency Canstar, Diners Club rewarded the higher end of the credit card market and was generous with its rewards points. But it also charged a higher surcharge, which discouraged ‘‘many everyday customers from using Diners Club, resulting in it being less commonly used or accepted than Visa or MasterCard’’.
Canstar said Diners Club had less than 1 per cent market share worldwide, which equated to about 70 million cardholders in 190 countries.