Money Management

Walmart wants to get out of its credit card partnership with Capital One. See what the retail giant’s lawsuit alleges and what it means for cardholders. 

What happened

Walmart filed a lawsuit against credit-card partner Capital One last week, according to the Wall Street Journal. The retailer alleges that Capital One didn’t meet the terms of the contract, specifically that it failed to replace lost cards promptly, and that it failed to promptly post some transactions and payments to accounts.

A Capital One spokesman denied those allegations and said Capital One resolved those issues pursuant to the terms of the contract. The lawsuit “is an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago, or end the deal early,” Capital One’s spokesman told the Wall Street Journal.

So what

Capital One became the card issuer for the Walmart credit card in 2019, and the contract reportedly lasts until at least 2026. People familiar with the matter say that Walmart executives wanted to renegotiate terms of the contract, including changing the loss-sharing agreement on chargebacks and getting its own fintech arm involved in issuing cards.

This could end up affecting cardholders if Walmart is successful in its attempt to terminate its partnership with Capital One. In that case, Walmart would most likely launch a new credit card with another bank and send it to all of its cardholders in the mail. Card features usually change during transitions like these, so it’s unlikely that the new Walmart card would have the same benefits as the old one.

This isn’t the first time Walmart has sued a credit card partner. Walmart also filed a lawsuit against its previous partner of nearly 20 years, Synchrony, in November 2018. The circumstances were different there, as Walmart and Synchrony had already decided to end their partnership. Walmart agreed to dismiss the lawsuit a few months later.

Now what

If you have a Walmart credit card, nothing is changing right now. It’s possible that the two companies resolve their issues, or that Walmart’s lawsuit is unsuccessful, and everything continues as normal. If Walmart switches to a new card issuer at some point and launches another card, you’d receive that in the mail to replace your old card.

It’s worth mentioning that store cards like this one tend to be lacking in features compared to what the best credit cards offer. A Walmart credit card, for example, is mainly going to be useful at Walmart. Everywhere else, there are rewards credit cards that earn more back. So, while it might make sense to have a Walmart card if you shop there often, it shouldn’t be your only credit card. Make sure you have at least one other card with more versatile features, such as a cash back card or a travel card.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Synchrony Financial is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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Sam’s Club definitely has a generous return policy. Still, you’ll be out of luck if you try to return any of these items. 

You know that old adage about the customer always being right? It occurs to us that sometimes a customer is more “gutsy” than “right.” Among the more ridiculous items Sam’s Club members have been known to return for a refund are a fishing pole (because they didn’t catch any fish), an empty jar of oysters (because they made them sick), and grapes purchased the month before.

You gotta love Sam’s Club, though. Unless employees spot a pattern of abuse, the retailer attempts to make customers happy.

These items can’t be returned

Despite Sam’s Club’s sweet return policy, there are some things even it won’t take back.

1. Personalized items

This includes items like the pillow you had personalized for Aunt Louise and the birthday cake for your dog.

2. Contact lenses

You can’t return an open box of contact lenses because, yuck.

3. Eyeglasses

If you’ve had the new glasses for over 14 days, unless your prescription has changed, they’re yours to keep.

4. Gift cards

You’ll have to hold onto that Hooters gift certificate you bought for your brother’s birthday because, frankly, Sam’s doesn’t want it back.

5. Tickets

If you purchased tickets to the Renaissance Festival before remembering how much you dislike scurvy-riddled peasants, buxom barmaids, or jousting in general, you’re stuck with those tickets. The moment a Sam’s Club customer service rep sees you holding tickets, they’re likely to wish you a quick “fare thee well.”

6. Bulk purchases

Remember that pallet of toilet paper you brought home because you heard there was a shortage and people would pay “anything” for a roll of TP? Unless it was damaged when you bought it, Sam’s will not refund it now that we’ve all learned that toilet paper is not, in fact, worth its weight in gold.

Where things get hazy

These items might have more flexibility depending on where you live and the fine print.

Alcohol

Regretting the money you pulled from your savings account to throw a party? Before attempting to return a half-full bottle of wine, give your local store a call. Alcohol returns depend upon the laws of your state.

Prescriptions

This is an iffy one. Some exceptions exist, so ask your pharmacist if the medication is refundable when you get your free consultation at pickup. Considering the high cost of prescription drugs, it’s a good thing exceptions exist.

Cigarettes and tobacco products

The policy on tobacco product returns can vary by store. You may want to call ahead to find out if you’ll have any trouble making that return.

Hearing aids

We understand why someone would want to return hearing aids that aren’t doing the trick, but Sam’s Club will not accept the return after 90 days unless there’s a warranty issue.

Subscription/protection plans

Whether or not that protection plan is refundable depends on the fine print that came with the purchase.

Return at will

Out of the thousands of items you might pull your debit or credit card out to pay for on any given day, there’s not much the warehouse giant won’t accept for a refund. That includes:

Within 90 days

ElectronicsMajor appliances

Within 30 days

Commercial heavy equipmentMotorsports items

Within 14 days

Cellphones (prepaid, postpaid, and no contract)

The embarrassment of being banned

No one wants to be that person banned from shopping at Sam’s Club, but that’s precisely what can happen if you regularly return items for a refund. For example, no one will be thrilled if you walk up to the customer service counter carrying a Magic 8 ball and want a refund because “it lied to you.”

Whether you adore a trip to Sam’s Club on a busy Saturday morning or truly dread the experience, it’s nice to know that the company stands behind nearly everything it sells.

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Nobody wants to get audited. Read on to see if your income might increase your chances. 

At this point, a lot of people have finished working on their 2022 taxes and are ready to sit back and wait for their refunds to arrive. But just because you’ve submitted your return doesn’t mean your refund will land in your checking account in a few weeks and that’ll be it. If the IRS has questions about your tax return, or if something on it looks suspicious, then you may end up receiving an audit notice in the mail that you’ll need to address before your tax refund can be processed.

Now, one thing you really should know is that tax audits aren’t necessarily the scary thing you might expect them to be. When the IRS audits a tax return, often, all the agency is doing is looking for more information. You may, for example, be asked to supply proof of a deduction you claimed on your tax return. Submit a copy of a receipt or the right documentation, and the matter should be closed.

But still, most tax-filers would rather not have to go through the audit process. However, if your income falls into a certain range, your chances of getting audited may be higher.

Does your income increase your audit risk?

Generally, tax-filers with very high incomes — we’re talking multi-millionaires — have a higher chance of getting audited than someone with an average income. But it might surprise you to learn that a low income could also increase your audit risk.

Financial expert Graham Stephan tweeted, “The stunning fact is that if you make under $25,000 a year, your chances of being audited by the IRS are about five times higher than everyone else.” He then went out to say that the rate of audits among the lowest income wage earners was 13 per 1,000 returns for the 2021 tax year. For everyone else, it was 2.6 per 1,000 returns.

Why might a low income increase your audit risk? In some cases, the IRS might be suspicious of the fact that you’re getting by on as little income as you claim. Also, low-income filers are often eligible for the Earned Income Tax Credit, which is a desirable one to claim because it happens to be fully refundable.

Most tax credits will only reduce your tax liability down to $0. But a refundable credit will pay you the amount you’re claiming, even if you don’t owe the IRS any money. Because low-income filers are more likely to claim this credit, which is associated with relatively high instances of fraud, it could explain why audit rates are higher for those not earning all that much.

How to decrease your chances of getting audited

Although you don’t need to lose sleep over the idea of a tax audit, one way to potentially minimize your chances of that happening is to be honest on your tax return. Report all of your income and only claim the credits and deductions you’re truly eligible for.

Also, make sure you have proof of the deductions you’re claiming when you file a return. That may not stop you from getting audited — but it might make the process of responding to an IRS audit letter a lot easier and smoother.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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Talking to your children about money can help them build strong financial habits. Here are five tips for getting started. 

April is Financial Literacy Month, so it’s the perfect time to begin a conversation about healthy financial habits with your kids. Of course, this is easier said than done. More than 4 in 10 parents said they’re reluctant to discuss finances with their children, according to a T. Rowe Price survey.

There could be a lot of reasons for that, but having a solid plan in place can make things easier. Here are five tips to help you get started.

1. Keep things age-appropriate

This one should be obvious, but it bears repeating. You might be able to explain the basics of interest rates on loans to your teenager, but your four-year-old might feel overwhelmed by this information. So think about what they already know and how you can build up from there in a way they’ll understand.

You don’t need to turn it into a serious lecture about finances or the importance of savings accounts. Just don’t shy away from discussing money when it naturally comes up. Talking to your children about their own values and helping them establish their own financial priorities can also go a long way. This can get them thinking about the long term and teach them about the importance of budgeting.

2. Explain the ‘why’ behind your decisions

When you choose to purchase one item over another or to forgo buying something you want but don’t really need, explain your thought process to your children. This will give them insight into why you handle your money the way you do and what factors they ought to consider when deciding how to manage their own funds.

3. Include kids in family decision-making

When appropriate, consider including your children in family financial decisions. For example, they might decide what brand of a product you buy at a store or how you spend some of your time on a family vacation.

When your child makes a decision, ask them about why they chose what they did and guide them to key financial concepts, like price comparison and the importance of saving.

4. Give them a chance to practice

Giving your children an allowance is a great way to enable them to practice their money-handling skills. They can choose which goals they want to save for and how they’ll budget for them over time. And if they run into trouble, you can use it as an opportunity to talk about what went wrong and what they might do differently next time.

You might also consider opening a savings account for your child. Many banks offer special accounts for minors that enable them to earn a modest rate of interest. Some are linked to parental accounts, so you can monitor their spending and transfer funds to them as needed.

5. Be honest about what you don’t know or haven’t done well

It can be tough to talk to your children about your financial mistakes, but doing so can help your children avoid the same errors. Explain what happened, why you regret what you did, and what you wish you’d done differently.

You also shouldn’t be afraid to admit if there’s a financial concept you struggle with or don’t fully understand. Show your child that it’s OK to ask questions and seek out the answers together. Talk about what you’re learning and how you plan to put it into practice with your family’s finances.

Talking about money with your children may not be easy at first, but you should get more comfortable with it over time. Allow it to be a part of your regular household discussions and encourage your child to ask questions if there’s anything they don’t understand. It may not seem like it at the time, but all those little conversations will add up over time and may give your child the confidence to manage their money well when they strike out on their own.

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I love my bank in large part because of its mobile banking app. Keep reading to learn about one issue I have with it, though. 

Mobile banking is a huge time saver, as it enables me to do so many things. I can check my account balance, move money from checking to my savings account, and arrange bill payments right from my phone or from my tablet.

I also can deposit checks. But, there’s a big catch when it comes to the ability to deposit money in my checking account from the comfort of home — and it’s a feature I really dislike about mobile banking.

This mobile banking issue is a real annoyance

Most mobile banking apps make it possible to take a photo of a check and then deposit the money into a bank account linked with the app. However, banks typically limit the specific amount you can deposit both per day and per month.

There are different limits set by different financial institutions, with some banks establishing the same limit for everyone and others setting the maximum mobile deposit amount individually for each customer. But, in many cases, these limits are relatively low.

The problem is, if you have a larger check than the mobile app allows you to deposit, you end up having to take it to the bank — which defeats the point of the convenience of using the app in the first place.

And, worse, if you’re with an online-only bank without branches, you may have to mail in the check. This not only is a huge hassle, but it could mean your money won’t be available for a long time because you have to wait for the check to travel through the postal service, get to the bank, be processed, and land in your account.

This entire process can take over a week, and if you’re waiting for the money to pay the bills, then you could be in trouble.

Is there a way to overcome it?

If you also find yourself annoyed by this feature of mobile banking, you do have options.

The approach I took was to find a bank that had a very high deposit limit. I can now deposit checks up to $50,000 in my account, which is a whole lot better than my old account that capped me at $2,500. For most people, being able to deposit up to $50,000 at a time is going to pretty much be sufficient for all of their needs.

You can also opt for a bank that has a branch location convenient to you. This way, if you do have to make an in-person deposit because the mobile app limit is too low, at least you can do so quickly and easily. This pretty much rules out online banks though, which isn’t ideal since these banks tend to have lower fees and better terms in many cases.

Ultimately, this may not bother you if you aren’t depositing checks regularly. But if you do want to be able to make a mobile check deposit in a larger amount, then be sure to pay careful attention to this feature when picking the bank that’s right for you.

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The U.S. labor market expanded in March, but at a slower pace than in recent months. Read on to see what this might mean for the broader economy. 

What happened

In March, the U.S. economy added 236,000 new jobs, which was a few thousand less than what economists expected. The unemployment rate fell from 3.6% to 3.5%, which is comparable to where it sat before the pandemic began.

So what

In January, the U.S. economy added 472,000 jobs (a figure initially reported as 517,000 but eventually adjusted downward). That month, the jobless rate fell to 3.4%, representing a 54-year low. (As a point of clarity, the unemployment rate measures the number of workers who want to participate in the labor force but are unable to due to a lack of finding work. It does not account for retirees or those opting out of the labor market.)

In February, the economy added 326,000 jobs. March’s jobs gain was notable, but considerably smaller than the gains recorded during the first two months of the year. March’s 236,000 jobs also represent the smallest monthly gain since a decline in December of 2020.

“The labor market in March came in like a lion with a banking crisis and more layoffs, and is going out like a lamb with a solid jobs report,” said Daniel Zhao, Glassdoor’s lead economist, in a statement. “The labor market is still strong, but it’s gliding slowly back down to Earth.”

Now what

Normally, a strong jobs report is considered positive news, as it’s indicative of a stable economy. In recent months, strong jobs data has led to stock market upheaval and fear among economists.

The reason? Inflation is still a major problem for consumers, and the Federal Reserve is intent on fighting it by implementing interest rate hikes. But since March’s jobs data wasn’t nearly as impressive as that of January and February, this news might prompt the Fed to slow down on interest rate hikes, thereby offering consumers in need of loans some relief.

A cooling on the rate hike front might also help quell the recession fears consumers and financial experts alike have been harboring since mid-2022. Aggressive interest rate hikes have the potential to produce a significant pullback in consumer spending, and that could be enough to fuel a broad economic downturn. If the Fed hits pause on its interest rate hikes, it might allow for steadier spending in 2023, thereby allowing the economy to avoid a recession.

Meanwhile, March’s lower jobs numbers should not fuel recession fears, either. While the number of jobs added last month is considerably lower than the number added in January and February, between 2010 and 2019, the U.S. economy added an average of 183,000 jobs a month. So an addition of 236,000 jobs puts the labor market in a stable, solid place.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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