As consumers, we love to use our credit cards to make purchases. Especially if that credit card earns us reward miles, air miles, etc. However, businesses are on the hook to pay various credit card processing fees. Those fees increase for the merchant if the credit card used for payment is a loyalty/rewards card, platinum card, etc.
Following a class-action settlement against Visa and Mastercard, credit card companies must now allow merchants to pass on the surcharge to their customers. Merchants must make it clear to customers at the time of payment about the surcharge, and it cannot be more than what the merchant pays the credit card company (up to 2.4%). For merchants, this surcharge is HST exempt, meaning merchants cannot collect HST on top of the surcharge. Some businesses may simply increase their prices instead of seeking permission to add the surcharge with credit card paying customers.
There has been little sympathy for large corporations for charging the surcharge to customers, though shoppers are more empathetic towards smaller businesses. Case in point, Telus jumped on the bandwagon to charge a 1.5% credit card surcharge on customer bills in the fall of 2022, only to reverse that decision in June 2023. Both Rogers and BCE decided against passing a credit card surcharge to their customer invoices.
Have you come into many retailers who are charging a surcharge for paying with your credit card? If so, is it enough for you to consider paying with cash or a debit card instead?
