A Toronto sweets shop and restaurant has come under fire for something lots of businesses are doing right now: passing on credit card surcharge fees to customers.

[hegemony]

A Toronto sweets shop and restaurant has come under fire for something lots of businesses are doing right now: passing on credit card surcharge fees to customers.

[PotO]

1 hour ago, hegemony said:

A Toronto sweets shop and restaurant has come under fire for something lots of businesses are doing right now: passing on credit card surcharge fees to customers.

 

Hopefully they will be bankrupt soon.

 

 

[hdporter]

On 10/19/2022 at 11:01 AM, PotO said:

 

Hopefully they will be bankrupt soon.

 

 

 

 

I can get behind that sentiment somewhat ...

 

 But I'm gonna take this opportunity to vent about something more insidious that impact cardholders:  The unrequested wholesale upgrade of standard card to "premium" (Signature, Elite, etc) cards with benefits that largely go unused and against which the issuers charge premium swipe fees.

 

The issuers claim that the higher swipe fees are warranted to recoup the cost of added benefits, plus use of these cards are more valuable to retailers because they're held by more hefty spenders (at least, the credit limits and underlying income are higher).  That's a huge load of crap ...

 

99% of the time the cardholder patronizes the business because the business attracts them; it has nothing to do with promotion by the issuer.  And, in the case of most cardholders of these premium cards, most of the added benefits are little used, if at all.  (It's been 2 years since I last reached out to a "concierge" to secure a hard to get restaurant reservation.)

 

And, in the case of the one card benefit I greatly value (primary rental car damage waiver), I believe a growing number of "premium card" issuers are ridding themselves of the product.  (Notably, CITI).

 

The bottom line is that card issuers saw an opportunity to boost their swipe fees by 25%+, cajoled cardholders into using them by adding services with a cost that's a fraction of the added swipe revenue, and told merchants to bend over and take it (if they want to continue accepting that charge brand).

 

Having been left with just very limited leverage in the contractual relationship, I'm not surprised that some retailers are unwisely pushing back in the only manner left open to them ... passing on fees to cardholders (not smart at all, but I'm not surprised).