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Joanne McNeish is an associate professor at the Ted Rogers School of Management, where she researches consumer trust and brand loyalty.

Parents in the midst of a divorce are often warned by psychologists to avoid fighting in front of their children or making them take sides. Why? Because children will bury these negative moments in their subconscious memories, which can make them distrustful of their partners in future relationships.

As with bickering parents, both Visa and Wal-Mart are trying to woo customers to remain loyal and take a stand against the other company by airing their grievances in public. But this tactic could backfire on both companies, both in the short term and the long term.

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Customer loyalty creates predictable and lower-cost patronage for the company. Loyal customers are more likely to spend more money and to shop frequently. They are more likely to forgive the company when mistakes happen and not switch to a competitor. And most importantly, loyal customers are more likely to recommend the company to others, which helps the company grow.

Both Visa and Wal-Mart have made substantive financial investments and efforts to maintain the loyalty of their customers. That effort has paid off with high consumer loyalty levels. So erosion to brand loyalty is horrifying to these companies, especially since they operate in highly competitive credit-card and retail markets.

To be sure, brand trust is an essential piece of consumer loyalty. Some studies have even shown that loyalty and trust have a symbiotic relationship – one can't exist without the other.

Furthermore, trust is formed by the belief that one person has the best interests of the other at heart – even when they can't verify their actions. Distrust is formed when there is an expectation of negative behaviour; for example, it can be based on an individual's own experience or what he or she hears from others through media or advertising.

People generally avoid dealing with people or companies they don't trust. If they are forced to deal with that person or company, they interact as little as possible, interrogate, take much longer to make decisions and insist on costly verification procedures.

Not only could Wal-Mart and Visa's dispute create negative feelings among their customers, it could affect the marketplace. Their competitors have reason to be concerned about the effect on every company's trust levels.

The effect of past bad actions can be seen in consumers' trust levels. Surveys published in the past few years in Canada and the United States show historically low and declining levels of trust for all for-profit companies, including retailers and credit-card companies. These negative trends are even more dramatic among women. Women are more likely to be the primary shopper for the household and are Wal-Mart's primary target audience.

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The conclusion that Canadians may draw from this public battle? Visa and Wal-Mart are actually serving their own interests and not their customers'. So Canadians may conclude that neither company deserves to be trusted. It's hardly the win-win the two companies would prefer.

Here's why.

Visa can't win. Not only because the information about high interchange fees charged to merchants is consistent with consumers' experience of paying high monthly interest rates, but because of Visa's strong association with Canadian banks, which just announced service-fee increases while posting record profit levels.

Wal-Mart can't win because its customers are not convinced by its claims that the publicized internal cost savings will be passed on to consumers. And potential customers who don't have another credit card or the cash available may decide to shop somewhere else.

Neither side is completely innocent nor guilty. But both companies are making consumers feel even more powerless than they already feel based on their past dealings with these two large corporations. Those feelings of powerlessness, along with the negative information from both sides, increase their distrust. That can't be good for sales and customer loyalty.

Wal-Mart and Visa would do well to get some private counselling rather than arguing in public – because their customers are listening.

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