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Ask HN: How do we feel about Canadian businesses charging customers cc fees?

16 points by costcofries ↗ HN
As of October 6th, 2022, Canadian businesses will now be allowed to pass on the CC fees to customers. What are your thoughts on this new change?

https://www.ctvnews.ca/business/canadian-businesses-can-charge-credit-card-fees-starting-oct-6-1.6096370

33 comments

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kaidon
How about a discount on Cash or Interac purchases in kind then?
NiagaraThistle
I've always thought this would be an ideal solution to CC fees for store-owners. Also, I think if we bag our own groceries/goods we should get a small discount.
tanseydavid
>> Also, I think if we bag our own groceries/goods we should get a small discount.

Do you anticipate that the discount will be sufficient to cover the charge for BAGS?

hankchinaski
that's already been happening for ages especially anywhere in southern Europe. At least in my personal experience in Spain, France and Italy you have many old fashioned merchant that would tell you 2 different prices based on whether you want to pay with card or cash. Or require a minimum spent for card
jusssi
Is it the sort of deal where the cash goes straight to the pocket and you don't get a receipt?

And no, you don't need to go south to find those deals.

Symbiote
In Denmark, it's not so unusual for there to be one price for cash or debit card, and a surcharge for credit cards, especially foreign ones.

They aren't fiddling the tax. Credit and foreign cards cost extra to process.

logicalmonster
You won't find this too often in a big corporate chain, but some small businesses do offer some form of cash discount.

I find cash to be a lot more convenient and satisfying than a credit card and I prefer to use that for most everyday purchases. It's easy to open your wallet and see how much you've allotted to spend on a trip out (and avoid the temptation to spend more than what you've budgeted) rather than having to deal with logging into some app and trying to figure out how much you want to justify spending.

Once in a while, I run into a business that refuses to take payments in cash. I always ask the business, why do you prefer giving away a percentage of your income to the credit card companies rather than dealing directly with your customer and keeping all of the money that you possibly can? I've never gotten a satisfying response to that.

tothrowaway
There's a cost to handling cash. It can get stolen by employees or robbers. It can leak away when giving incorrect change. There's a chance you get counterfeit bills. The bank charges you to deposit it. And most brick and mortar businesses aren't paying the 3% that Stripe & friends charge. They get much better rates.
logicalmonster
Nothing in life is 100% perfect, but as a business owner I see quite a few risks with a business handling credit cards.

Even when you deal with customers properly and fairly, you take a risk handling credit cards because you can deal with false disputes and chargebacks long after you've already provided the product or service. It doesn't matter if you can provide detailed records proving that you provided the service (including signed shipping records and emails from a customer verifying delivery) the payment dispute is judged in a non-transparent process by a busy person that barely puts 30 seconds into checking your documentation and usually has much more of an incentive to favor the fraudster.

And on top of being out on the product and losing your payment, you also have to deal with paying an extra chargeback fee to the payment provider for them to have to deal with the dispute.

Worse still: every one of these false disputes holds the potential to trip some random algorithm at a payment processor and effectively kill your business by them blocking your account due to too much fraud. It's not super common, but it does happen that businesses get destroyed due to fraud.

As long as you walk free and have at least 1 arm, nobody can ever prevent you from handling cash.

ThePowerOfFuet
It costs businesses money to handle cash; it has to be counted, transported, deposited, and it can be stolen.
tanseydavid
It is an essential part of doing business.

This is almost like pointing out that inventory can be stolen. Of course it can.

ThePowerOfFuet
Of course it is, but it was suggested that the businesses would save money by accepting cash; it might be a case of six of one, half a dozen of the other.
logicalmonster
It's fair to say that there's a bit of manual work involved with cash.

But I gotta say if my biggest problem as a business owner was having a pile of cash that took too long to count, well that wouldn't exactly rank highly on my list of biggest life concerns to deal with.

ThePowerOfFuet
Your employees can't steal card transactions made with your POS equipment.

Most banks charge businesses a fee for cash deposits per thousand dollars deposited. It's not typically free.

I would say that it's more or less even between cash and card (although much better in Europe where the fees are capped much lower).

bell-cot
Vs. the old way - where the credit card cartel forced businesses to accept 99, 98, 97, ... cents on the dollar for credit card sales, while cash customers still had to pay the business 100 cents? Then the cartel could split their take with the customers - to push more and more of a business's gross sales into the "we only get paid 96, 95, ... cents on the dollar" category?

It's About Time.

toomuchtodo
It is economically efficient to internalize externalized costs, and will encourage uptake of less expensive payment rails. Net good imho.
cuteboy19
Anything that causes a move away from physical cards and onto direct bank to bank transfers is good
nobodyandproud
No way. A buffer away from the bank account is one of the meaningful reasons to use credit cards.
killingtime74
Sure then you should pay for that and people who disagree don’t need to subsidise you
nobodyandproud
That’s fine and is in fact expected. I’m all for transparency.

Let’s make sure other payment processors like Apple pay also don’t get subsidized either, instead of targeting just crefit cards.

csomar
Like an expense account?
nobodyandproud
No.

It’s the difference between a debit card—which directly hits your account—and a credit card, which is a personal loan.

When fighting fraudulent charges, debit cards put consumers at a major disadvantage.

mcv
Good. Makes the cost of expensive payment systems more transparent. Hopefully this will encourage people to move to cheaper and more secure methods.
gnicholas
I went to a restaurant on University Ave in Palo Alto and was unpleasantly surprised to find that they tack on a credit card fee, which they don't tell you about. I only know about the fee because I happened to realize that the amount I was rung up for differed (by more than the sales tax amount) from the amount displayed in the subtotal. They assume everyone is paying credit so if you decide to pay cash they have to back up the transaction and re-run it without the extra charge. That tells me that virtually all of their customers pay credit, and probably very few are aware that they are paying this surcharge.

I understand the desire to pass on costs to relevant customers, as this is fairer to cash purchasers. But it is not OK to hide the ball and secretly surcharge the vast majority of your customers, who pay with credit.

DwnVoteHoneyPot
Yes, there is a balance somewhere where customer needs to know all-in cost (which includes transaction, shipping and tax costs) but also have transparency of what the all-in costs includes. At many gas stations (definitely at PetroCanada), I see the final cost on the pump, and the pump has a sticker showing a pie chart of product vs. taxes.
gnicholas
Pie charts are nice for gas vs taxes, just so the customer knows where the money is going.

But it's a totally different situation when one of the fees (a cc surcharge) only applies if the customer chooses a certain payment method. That has to be explicitly flagged somewhere in the transaction flow. You can't expect people to do the math and realize that the total is 12% more than the subtotal, not 9% more.

rdsnsca
LOL, some have been doing it since the 1970's, or at least a few comic / games stores in Halifax, Nova Scotia did.
e-clinton
Don’t care for this. Just raise your prices.

Also, I hate tipping. Just raise your prices.

8jef
Time to celebrate the Interac payment system, very low fees since 1984. For everything else, we still have cash.
csomar
It's going to get worse before it gets better. I'm travelling in SEA and using my cards for payments (both US and European). The European card started charging me a commission fee for foreign transactions. That was new and the US card still doesn't have that. The fee is around 3.5% of the total transaction.

Of course, I've had to swallow the cost. Pretty much every other merchant (Kuala Lumpur) accepts card and some do not handle cash anymore. I'll be jumping to an eWallet thingy (TnG card) that I can reload with cash and pay with in most stores.

So these things have consequences but it's going to take time. I don't think they understand what they are doing but it's going to take a little bit of time before it hits them.

afarrell
As a GoCardless shareholder? Happy that will nudge people towards direct debit.