Hard Times Force More to Buy ‘on Credit’

Bronx bodega Gourmet Deli offers a credit system to the customers it knows best who need it the most. (Photo by Mariela Lombard via El Diario-La Prensa)

Bronx bodega Gourmet Deli offers a credit system to the customers it knows best and who need it the most. (Photo by Mariela Lombard via El Diario-La Prensa)

Despite the popular signs saying “We don’t give credit” in plain view of customers, the reality is that selling “on credit” is becoming increasingly common during the current economic crisis.

The practice of selling on credit has risen by around 25 percent over the past few weeks, and is expected to grow in the coming months according to José Fernández, president of the National Bodega Federation, which comprises 8,500 small businesses, most of them Latino-owned.

“Selling on credit is nothing new,” said Fernández, “but there has definitely been a significant increase, especially after the cuts to the Supplemental Nutrition Assistance Program (SNAP),” which started on November 1.

Bodega owners allow customers to use the classic “put it on my account” line because they want to keep regular customers coming back.

“You only trust clients you know well, and you start with a small item, like a pound of tomatoes or a gallon of milk,” explained Izy Alí, owner of the Gourmet Deli on Burnside Avenue in the Bronx.

Customers who pay their weekly debt earn the owner’s trust, which lets them buy a larger number of products on credit, but without going above a limit that ranges between $50 and $100.

Alí, who started his business five years ago in the neighborhood of Morris Heights, said that 80 percent of his customers are Latino. He sells them basic food staples on credit and even patiently listens to their stories of economic hardship.

“The elderly and single mothers are most in need of credit. It’s a must to survive the high cost of living,” he explained.

Ángel Caballero, of Puerto Rican background and the executive director of the Davidson Community Center, uses the credit system at Alí’s bodega to stock up on snacks for the kids at the center’s after-school program.

“The credit offered by small businesses saves needy families from going hungry. The cuts to social services have forced individuals and organizations to make use of this resource,” stressed Caballero, who has been providing the neighborhood with community services for more than 30 years.

The center offers breakfast, lunch, and dinner to 100 local residents each week. But waiting in line means that some end up facing a crisis since the number of people often exceeds the amount of available food donated by the Food Bank for New York City.

“People start waiting at 5 a.m. for a voucher, and on average, around 80 people go away empty-handed because there isn’t enough food,” he explained. “The frustration comes out in anger. Families are no longer asking for help; they’re demanding it.”

Caballero said that cuts to SNAP set off a “tsunami of credit” in Bronx bodegas.

“Without enough food at local food banks, people turn to bodegas, appealing to the owner’s kindness,” he said.

This is the case for Julia Nazario, a 67-year-old Dominican woman who uses credit at the bodega close to her building on Jerome Avenue.

“If I don’t get enough food at the center, I go to the bodega owner. He already knows that I pay him when my pension check arrives,” said Nazario.

According to Fernández, the credit system has risen most in the neighborhoods of the South Bronx, Inwood, Washington Heights, South Brooklyn, and Jackson Heights. Basic food staples, cigarettes, and calling cards are the most common items bought on credit.

“Customers don’t go to the stores. They call from their apartments and ask for what they need on credit. The bodega owner keeps a record in a small notebook, like back in our native countries,” said Fernández. “Many ask for the PIN (personal identification number) of the calling card, accumulating up to $25 on the account.”

He explained that the practice doesn’t pose a risk for small businesses.

“Everyone in the neighborhood knows each other and the debt is taken seriously. Credit doesn’t go above $100, which makes paying it back easier,” he said. “In general, the bodega owner trusts his community. For example, an Asian owner only gives credit to Asian customers; it’s the same for a Latino.”

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