Merchants Can Now Charge Credit Card Fees

[Cecil Terwilliger]

Paying with a credit card? Expect to see a fee when you shop under new rules that start now

Retailers, other businesses will be allowed to pass on fees of up to 2.4% to consumers

The new rules won't be a free-for-all, as starting Thursday, merchants must give card providers 30 days' notice of their intent to start charging a fee. They must also make it clear to customers at the time of payment that there's a surcharge, and it can't be more than they pay themselves. Finally, the surcharge will be capped at 2.4 per cent. But the rules won't be in force in Quebec, because that type of fee is forbidden under the province's Consumer Protection Act.

https://www.cbc.ca/news/business/cre...shop-1.6606997

Tired of inflation? Well be prepared for the price of everything to go up another 2% starting soon if you pay with a credit card.

I wonder how this will work for online shopping, where paying via other methods is more difficult.

I also don’t understand how they can only pass along their exact fee if the fees differ depending on what kind of car you use. A no fee card has a much smaller merchant fee from visa than an Infinite card.

[Locke]

Dont blame merchants, blame banks.

We've been eating these fees for years. How do you think we feel when we do a big job or manage a big sale and the customer whips out their Westjet card or whatever to 'get their points' and we immediately lose an additional few percentage points?

You want it to be fair? Either kill points/rewards/loyalty cards entirely or make the advertiser or bank eat the fee rather than the customer or the merchant.

[Slava]

Well surely these fees are already baked in to prices? Realistically, we shouldn’t see an increase. I know we will, and I’m not delusional, but if a business isn’t factoring this in (and hasn’t for the past decade or two), they’re running a pretty poor operation.

[Sliver]

lol at blaming the merchants. We've been paying for your points for decades.

[Cecil Terwilliger]

Lol. Who’s blaming anyone? Touched a nerve just by posting an article I see. Didn’t know all our business owners were this sensitive.

[Locke]

Originally Posted by Slava

Well surely these fees are already baked in to prices? Realistically, we shouldn’t see an increase. I know we will, and I’m not delusional, but if a business isn’t factoring this in (and hasn’t for the past decade or two), they’re running a pretty poor operation.

It used to be illegal.

Good example is that AMEX charges merchant fees at ~double+ what MC or VISA charges, all cards charge different rates especially points cards, and it was illegal to charge more based on form of payment which is why places either took AMEX or not.

Ditto as to why Chinese Food places would 'give you a deal' based on how you choose to pay. But mainstream merchants cant really do that.

Another good example is when Universities stopped taking Credit Cards for Tuition for a spell...because they were getting murdered on service charges.

[Sliver]

Originally Posted by Slava

Well surely these fees are already baked in to prices? Realistically, we shouldn’t see an increase. I know we will, and I’m not delusional, but if a business isn’t factoring this in (and hasn’t for the past decade or two), they’re running a pretty poor operation.

That's a fair point, but some cards charge merchants exorbitant rates just so the users get better perks. I would love to tack on a surcharge on those types of cards. You're correct, of course, that credit card charges are basically priced into things, though.

I can't see myself charging anything based on this at least until I let other merchants try it out to see how customers react. I think it's good to allow merchants the option to do this. Like, you could look at it as getting penalized for paying with a credit card, but it'd be neat if I could offer a discount (even like 1%) to people paying with Interac. Right now that's against the rules with my point of sale machine provider.

[Cecil Terwilliger]

Originally Posted by Slava

Well surely these fees are already baked in to prices? Realistically, we shouldn’t see an increase. I know we will, and I’m not delusional, but if a business isn’t factoring this in (and hasn’t for the past decade or two), they’re running a pretty poor operation.

Exactly. It’s always been the cost of doing business. Pretty soon paying for anything is gonna look like my enmax bill. There will be 15 other charges, before the charge for the actual service.

Maybe regulate visa and Mastercard better if it’s so reviled. But they bribe too well, so I doubt our politicians would be doing that.

Many other countries who have actual consumer protections in place, mandate the CC fees credit card companies can charge merchants and outlaw special merchant fees for customers. But that’s too logical for us.

Outlawing rewards would also be a good move but god forbid we do anything to not promote consumer debt. Credit cards should be differentiated by interest rate and nothing else.

[getbak]

I wonder how many businesses will actually do this? Calgary Co-op has already announced they won't be.

I'd think any company that does a large percentage of its transactions by credit card will already have it factored into their prices and it would be better to give a discount for cash payments than charging more and pissing off a large percentage of your customers for paying by card.

[Cecil Terwilliger]

Originally Posted by getbak

I wonder how many businesses will actually do this? Calgary Co-op has already announced they won't be.

I'd think any company that does a large percentage of its transactions by credit card will already have it factored into their prices and it would be better to give a discount for cash payments than charging more and pissing off a large percentage of your customers for paying by card.

The Visa and MC terms of service typically outlaw offering discounts for paying debit or PAD.

Since that’s the exact part of this that got struck down, I do think we’ll see more businesses going the incentive route, rather than positioning it as a penalty.

The problem is that credit cards are so ubiquitous and so many Canadians who live paycheck to paycheck rely on credit cards to be able to eat and live, will be hit hardest by this change.

[GGG]

In general I’m supportive of this.

Transparency in the costs we pay is a good thing

Right now wealthy people with better points bearing cards are being subsidized by those who are not able to meet the qualifying requirements of points bearing cards.

[iggy_oi]

Originally Posted by Sliver

lol at blaming the merchants. We've been paying for your points for decades.

If it makes you feel better companies that have points programs pay for them by charging higher than necessary prices to their customers upfront regardless of whether they are a points member or not.

[Snuffleupagus]

Merchants who charge this are going to loose more than 2% of their customers IMO.

[calgarygeologist]

Originally Posted by getbak

I wonder how many businesses will actually do this? Calgary Co-op has already announced they won't be.

I'd think any company that does a large percentage of its transactions by credit card will already have it factored into their prices and it would be better to give a discount for cash payments than charging more and pissing off a large percentage of your customers for paying by card.

I really don't expect a lot of businesses will start charging a fee especially the big retail or service chains like gas stations. This will probably be utilized by smaller restaurants and smaller merchants.

[Slava]

Originally Posted by Locke

It used to be illegal.

Good example is that AMEX charges merchant fees at ~double+ what MC or VISA charges, all cards charge different rates especially points cards, and it was illegal to charge more based on form of payment which is why places either took AMEX or not.

Ditto as to why Chinese Food places would 'give you a deal' based on how you choose to pay. But mainstream merchants cant really do that.

Another good example is when Universities stopped taking Credit Cards for Tuition for a spell...because they were getting murdered on service charges.

No, I know that was the law before. But what I mean is, as a business, you know it costs ~2-3% to accept cards overall. You include that when you price your products though. If more people use Interac and you gain a percent, that’s great. If everyone uses Amex, you breakeven because you had it priced in.

I know we won’t see that from everyone. The registries charge for everything, which is incredibly annoying. I know it’s not a big amount, but consumers hate these things, and I think a lot of businesses are going to recognize that. It might not be a huge deal for things that are more one-time in nature, but for things like a restaurant that relies on repeat customers, I’d be wary of adding this.

[White Out 403]

lol @ people thinking this isn't already baked into the price of everything already.

This is just another wealth transfer from the middle and lower class to rich #######s and corporations.

Keep squeezing. Hungry people don't stay hungry for long.

[Johnny Makarov]

How about blame yourself? pay with debit.

[TrentCrimmIndependent]

use paypal for online purchases (and connect your debit account to your PayPal) . available on most sites now

[Cecil Terwilliger]

Originally Posted by GGG

In general I’m supportive of this.

Transparency in the costs we pay is a good thing

Right now wealthy people with better points bearing cards are being subsidized by those who are not able to meet the qualifying requirements of points bearing cards.

So now the wealthy people get their points and the people without points cards because of the qualifying requirements will have to pay more when they spend. How does that not just benefit the wealthy people?

And how does this add to transparency to costs? This is not a good thing for anyone, including merchants. You’re already paying for it as part of the other costs of running a business. Do you want your next trip to subway to include line items for rent, power, wages and food costs?

[Jacks]

I had a client who wanted to pay a $30,000 bill by credit card so he could get the Airmiles. I tried to explain to him that his $150 worth of Airmiles was going to cost me $600 - $800 in fees, he didn't think that mattered. I told him I'll give him $150 in cash and he said he wouldn't feel right about taking that money. People are idiots.

I started charging 3% for any credit card payment over $1000 a long time ago. No one from Visa, Mastercard or the merchant processor ever called me to say I had to stop.