Ontario businesses can now add surcharge to credit card transactions

As of today, merchants can pass on their credit card expenses to the people they’re selling to.

This is something that could add around two per cent to your bill if a store decides to pass on the charge. A significant number of stores said in a survey they’re going to pass on the charges, although stores we spoke to today said they’re not going to do that.

When a customer uses a credit card to buy a product or service, the seller pays a surcharge to the credit card company, typically between 1.5 to 2.5 per cent.

Now, under a rule change by credit card companies, sellers are allowed to add the surcharge to the bill paid by the customer, an additional two per cent or so.

At the Sweet Bakery in Brantford, Stacey Bester says passing on credit card costs to customers is definitely not part of her business philosophy.

“Times are challenging for everybody and I would like everyone to be able to make every day a sweet occasion and have a little indulgence in their life and if it means I’m absorbing that cost right now that’s something I’m willing to do,” Bester said.

The Canadian Federation of Independent Business says this is a grim time for small businesses facing high costs and debts from the COVID-19 pandemic.

A survey by the federation on the credit card surcharge shows 19 per cent of small businesses plan to pass on the surcharge to consumers, 40 per cent are not sure and 26 per cent say it depends on what their competitors and suppliers do and 15 per cent say they do not intend to pass on the surcharge.

Consumers already facing high inflation are not looking forward to paying credit card surcharges, in fact, none of the businesses CHCH News spoke to today said they plan to pass on the surcharge.

Business owners we contacted like Stacey Bester say bank fees are a cost of doing business and they won’t ask customers to pay them.

The Federation of Independent Business says a lot of businesses are taking a wait-and-see approach, before deciding whether to pass on the added cost.

If it does happen, there has to be transparency. Any company that decides to pass on the surcharge has to give the consumer plenty of warning. Businesses are supposed to have a notification at the point of sale telling the consumer they’re paying the surcharge and how much they’re paying and it should be on your receipt.