With the current inflation rate, Canadians should expect a rise in the cost of just about everything. However, a new demand for the dollar is expected as businesses are now allowed to charge a fee every time their credit cards are used.
Loblaws and Superstores are among the companies charging a fee when you pay using a credit card. Only some people may understand this, which has become a point of discussion. We will try breaking it down for you here.
Should You Pay Surcharge on Credit Card in Canada
Imagine this; you get to the counter with your credit card at Superstore or when paying at Loblaws. And then you are told that your transaction came with some extra charges that perhaps you didn’t know about yet. What does that mean?
The extra charge could be the service fee, also known as a surcharge unless you have paid for extra services. This additional fee is always annoying for many people as it can add to the cost of whatever you are buying.
So, why do businesses do this? They want to cover the credit card processing costs. It has become normal across Canada. So, should you accept it? And is it legal?
Yes. Since October 2022, it has become legal for merchants and businesses in Canada to charge surcharges whenever they use a credit card. This means customers are expected to cover the card fees that card companies like Mastercard usually charge merchants.
Don’t be surprised again when you hear that your card has been charged an extra fee. This has been the responsibility of merchants all along, which is why many Canadians did not know about it.
How Much Will You Pay
In short, a credit card surcharge is an extra cost charged by credit companies as a processing fee. It’s not the merchant that imposes such costs.
Depending on the issuer, the fee can be anywhere from 1% to 3%. Previously, merchants took care of such costs as part of business expenses. The recent class action lawsuit against several banks, Visa and Mastercard, changed things. Businesses can now charge the customer directly so that the merchant does not have to pay.
Using Credit Card at Superstore and Loblaws
Superstores and Loblaws are among the largest merchants in Canada. You may have been used to paying for goods and services here without an extra fee. Well, expect to find a different rule if you haven’t already.
Luckily, they follow the same rule as any other merchant in Canada. There are certain restrictions on how they can charge customers and by what percentage. The general guidelines include the following:
- Credit card fees should exceed 2.4%. If you are charged 3%, you can seek legal advice against the store.
- The stores will not charge the service or convenience fee as an additional fee. The surcharge is specifically for the credit card company.
- Customers will not be charged more than what it costs the merchant to accept the card.
The store must openly show when they charge the surcharge fee during the sale process. This can be in-store, online, in physical stores, and on receipts. You won’t be confused about the extra charges anymore.
