How the aftermarket will treat credit card fees

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For now, most aftermarket businesses won’t pass on credit card fees to their customers. But at least a third of the industry is undecided.

Following a class action lawsuit, most Canadian merchants are now able to pass on credit card processing fees to their customers. Those in Quebec, however, will not due to the province’s consumer protection laws.

A survey by the Canadian Federation of Independent Business (CFIB) found that about one in five (19 per cent) would look to offset fees by passing the cost on to consumers. CFIB also found that merchants that operate in a business-to-business environment would be more likely to pass on fees than those that deal with consumers.

Auto Service World asked its readers how they will approach this. The results were more or less in line with the greater business community.

At least, for now. Most are still undecided about how they will proceed.

When asked if they would pass on fees to consumers, most (43 per cent) said no. But not far behind were those who are still thinking about it — 39 per cent said they’re undecided. One in five (19 per cent) said they would, matching CFIB’s findings.

When looking at whether they’d pass on fees to business customers, aftermarket professionals were more likely to pass on those costs (25 per cent) in this case. However, like with consumers, most (43 per cent) said they wouldn’t and almost a third (32 per cent) were undecided.

“Merchants have been paying for years credit card commissioned fees to Moneris or the … and been unable openly to ask reimbursement,” one respondent wrote in the option comment section. They answered they will pass on fees no matter the type of customer. “Credit card users benefited accumulating [cash] points or Air Miles benefits. It’s about time to stop the hemorrhage.”

Several respondents said they would not pass on the fees explained the added cost is already built into their pricing structure for all customers.

“We have chosen not to add fees at this point. In my opinion all businesses have already factored this in,” said one respondent.

A pair of respondents who said no in both cases explained that doing so would cause them to lose customers. Similarly, one respondent cited added fees would simply by another price hike on consumers.

“It’s better to lose 2 per cent than 100 per cent,” observed another.

Even though one respondent said they wouldn’t pass on fees to either type of customer, they did note that “the credit card holders should incur all fees not the businesses accepting them.”

One who was undecided said they would wait to see what others do first. “I will if competition does. But I won’t be the first.”

Another undecided respondent explained that it could depend on the size of the customer’s bill. “I place a thresh hold where above that I charge an extra 2 per cent. But below, not sure how I would implement it yet. We’ll see.”

On the yes side, one who said they would charge consumers the extra fees explained that they pay about $30,000 a year in credit card fees. “With an average of almost 2 per cent per transaction, it adds up fast and reduces our bottom line.”