Walmart used $2 billion in credit card and personal-finance fees to expand its credit card business, the company announced on Thursday.
Walmart said it plans to use that money to expand the business by selling merchandise directly to consumers, rather than through third-party retailers like Amazon and Best Buy.
Walmart will also offer customers more choice in the products they buy, including a new range of clothing, toys, electronics and appliances, and its first-ever television, a $1,000 TV.
The expansion comes after the company spent $2,859 per person in credit-card fees, the majority of which were for its first fiscal quarter of 2017.
That’s up from the $2 per person it spent in fiscal 2016, and up from $1.4 per person Walmart paid in fiscal 2015.
The move to increase its retail footprint has been controversial because of its impact on workers.
The average Walmart worker makes $15 per hour, and the average customer makes about $1 per hour.
Walmart says it will cut that wage gap in half by 2020.
But some critics say Walmart is exploiting low-wage workers for its own gain.
In a recent letter to Walmart shareholders, the American Federation of Government Employees (AFGE) said the company’s expansion was “an affront to workers and to the public.”
Walmart spokesman Steve Hollinger said the retailer has been working to reduce the impact of its credit cards on its workers.
The company’s move will result in lower credit card interest rates and higher payments on those cards, Hollinger wrote.
“Our credit card debt is low relative to the size of our business, and our credit card customers will see their payments rise, and we will pay less on the cards they are using,” he wrote.
The new credit-cards fee is the largest one Walmart has ever levied, with the company previously charging $3.75 per card for the first three months of its expansion.
Walton-based Walmart said it is using $1 billion in fees for its expansion to make sure that customers get the products and services they want and pay the same rates as before.
Walman is the latest company to use credit cards to boost its business.
In 2016, Walmart spent $1 million to boost the popularity of its Walmart Pay card and then spent $3 million on a promotional campaign for its Pay Cash card.
The Federal Reserve has said that the Federal Reserve will eventually consider using a combination of consumer-facing and financial-market-linked policies to help stimulate the economy.
Walston-based Wal-Mart Stores Inc., which makes $10 billion in annual revenue, will use the new fees to raise cash.
The company is expected to spend the money on acquisitions.