About 20% of businesses are looking to overcharge their credit cards – Morinville News

The results of a recent class action settlement, Visa and Mastercard have given small businesses the option of adding a surcharge on credit card transactions to offset credit card processing fees.

A recent survey of its members by the Canadian Federation of Independent Business (CFIB) indicates that almost one in five small businesses (19%) are considering doing so.

“Most small merchants are still on the fence or don’t plan to overcharge as they don’t want to risk losing customers. However, it’s important for them to know that they will have that option,” said the first vice -CFIB National Affairs President Corinne Pohlmann in a press release: “Small businesses have long struggled with expensive credit card processing fees and are trying to find ways to absorb the cost of accepting premium cards without the ability to overcharge or decline those cards. Overcharging gives them the ability to offset some of their costs and be transparent with their customers about the fees they pay.

While 19 percent said they would impose additional fees, an additional 26 percent said they would if their competitors or suppliers did. Another 40 percent responded to the survey that they were unsure what action they would take. Only 15 percent said they would not overcharge.

The businesses most likely to overtax were businesses that sell to other businesses, including construction, manufacturing, and finance/insurance. Businesses that serve consumers directly were less likely to say they would overcharge. Nineteen percent of hotel industry respondents indicated a plan to surcharge, while 17% of personal services and 12% of retailers intend to surcharge.

“These data reveal the frustration so many business owners feel with the high cost of credit card processing, which can account for approximately 1.5-2.5% of every sale,” said CFIB President, Dan Kelly.

The business lobby group continues to call on the federal government to further reduce ongoing credit card processing fees for small businesses. Currently, Quebec does not have the ability to surcharge, and CFIB believes it should also have the right to surcharge to offset credit card charges.

“The power to surcharge will allow merchants to meet their rising operating costs, fend off future credit card fee hikes and keep prices competitive,” Kelly said. “With the growing pressures small businesses face from inflation and government-imposed costs, markup is another way to reduce their financial burden.”

Merchants wishing to surcharge register their plans with their credit card processor and Mastercard (Visa requires processor registration only). Once an intent to surcharge is registered, merchants must wait 30 days before they can begin applying a surcharge to Visa and Mastercard transactions.

“All payment processors should be prepared to support merchants interested in overcharging as soon as possible. If processors are not ready, CFIB urges them to find a solution for merchants who want to start overcharging,” Pohlmann added. .

More information can be found at cfib.ca/surcharge.

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