More retailers are charging their customers a small fee to use their debit cards, despite the risk of aggravating them and losing business.
The debit card fee is on top of whatever fee the bank charges for use of the card, and some stores
charge it to offset the expense of implementing the system.
Debit card readers in retail stores used to be the domain of the big banks, but more private companies have been developing their own networks since the deregulation of the industry in 1997.
The private systems give storeowners the option of giving their customers cash back with their purchases and of charging a fee for the transaction.
Michael Back, who runs CollectivePOS, one of the private point-of-sale companies, said debit surcharges started in convenience stores, but now more small- and medium-sized businesses are doing it.
"We're seeing it expand into businesses that have small average ticket prices. Coffee shops, for example," said Back.
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| Michael Back |
For transactions of only a few dollars, the fee to the business for completing the debit transaction would be too high to make a profit, so the surcharges help the business offset their costs.
"We're seeing these people start to implement convenience fees," said Back.
But Back said some businesses are now seeing debit surcharges as a source of revenue, as well.
Bill Knight of the Financial Consumer Agency of Canada said debit machines, and the convenience and surcharges that come with them, are part of competition.
Knight said consumers can express their displeasure with the charges and take their business elsewhere.
"If somebody is in the retail business, they really don't want to aggravate their customers over a minimal fee to them that is, in fact, going to make them go elsewhere," said Knight.
