Small businesses may soon be able to charge customers an extra fee for using credit cards with rewards plans. The Canadian Federation of Independent Businesses (CFIB) is working to get this along with other regulations passed that would relieve small business of hidden costs they incur when customers use special rewards cards.
Mike Kasij is the district manager of CFIB’s Toronto core has been working with the company for two years.
“We take information from the bottom, the business owners, and bring it up to the top, to the policy makers,” says Kasij.
Kasij says this membership gives business owners confidence that they are being represented and have a voice in policy change. The CFIB has a democratic approach, and representatives keep in contact with business owners by sending out e-mails and questionnaires to help understand issues that businesses may be facing.
It is no new issue for businesses to pay fees for credit card purchases, but according to the CFIB website there are over 70 premium or commercial credit cards some carry a merchant fee of 2.64 percent per transaction. Regular VISA and MasterCard charges are a minimum of 1.64 percent.
Paul Cass, owner of Account 4It Canada Inc., works with small business owners and often finds they are confused about fees that show up at the end of the month.
“There are fees that Visa and MasterCard charges, and nine cents or 13 cents per transaction doesn’t sound like much, but when you put that on top of other fees, over time it adds up,” says Cass.
CFIB promotes Credit Free Friday, and has downloadable PDFs available on their website that shop owners can print and display to encourage customers to use debit or cash. Even with notices and information available, Cass says cardholders believe this is just the cost of doing business.
Ian Bone, 22, is in his second year of Creative Advertising at Humber College. Bone says he got a student Visa card so he could buy a computer and that he is aware of the charges small businesses have to pay.
“I used to work at a small bike store and we would give discounts to people that used cash,” says Bone.
Not everyone is informed though. Second-year criminal justice student Zachary Davis, 19, says he didn’t realize that points cards come with extra fees for businesses.
“I use it for every other purchase, I want to get my points up,” says Davis. “Knowing this now will probably make me second guess my purchases at smaller businssess. They’re struggling to make it big so why not help?”