Auto Service World
News   October 12, 2022   by Adam Malik

Business can now add credit card fees

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Automotive aftermarket shops and jobbers are now able to add a surcharge on customers who pay by credit card.

But if the bigger merchant trend translates to the aftermarket, it could be shops footing the extra fees when buying parts from their jobber.

A survey from the Canadian Federation of Independent Business (CFIB) found that about one in five (19 per cent) of its merchant members will indeed look to offset credit card processing fees by passing the cost on to customers. According to the survey, companies that operate under a business-to-business model — such as from jobber to shop — would be most likely to add the surcharge. Those that deal directly with consumers were less likely.

The ability to do so comes following a class action settlement in which Visa and Mastercard will allow small businesses to add a surcharge on some credit card transactions. The CFIB noted that this option will not be available in Quebec due to the province’s consumer protection laws.

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The group’s survey also found a quarter (26 per cent) said they will add the surcharge if their competitors or suppliers do. Meanwhile, 40 per cent of businesses aren’t sure if they will do it at all. Only 15 per cent said they don’t intend to implement the charge at all.

“Most smaller merchants are still on the fence or don’t plan to surcharge as they don’t want to risk losing customers. However, it’s important for them to know they will have this option,” said Corinne Pohlmann, senior vice-president of national affairs at CFIB. “Small businesses have long been dealing with expensive credit card processing fees and trying to find ways to absorb the cost of accepting premium cards without the ability to surcharge or refuse those cards. Surcharging gives them the ability to offset some of their costs and be transparent with their customers about the fees they pay.”

Credit card processing fees can eat up 1.5-2.5 per cent of every sale, noted CFIB president Dan Kelly.

Merchants adding a surcharge for credit card usage have to display signage that they are charging the fee and have it explicitly shown on the receipt.

According to the CFIB, businesses can now apply for the surcharge by registering their plans with their credit card processor and Mastercard (Visa requires registration with the processor only). Once they have registered their intent to surcharge, merchants must then wait 30 days before they can start to apply a surcharge on Visa and Mastercard transactions.

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2 Comments » for Business can now add credit card fees
  1. Malcolm lves says:

    Perhaps the credit card companies should be paying merchants for sending a very lucrutive transaction their way!!

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