Credit card surcharge could deter Canadians from shopping at major retailers: Angus Reid

Two-in-five Canadian credit card holders would stop shopping at major retailers that pass on a 1.% surcharge, Angus Reid Institute said. 

New research from the non-profit suggests the idea of paying a fee on regular credit card purchases could change where consumers choose to shop. 

Three-in-ten (28%) say an additional 1.5% surcharge would mean no longer patronizing small businesses in their community, while more than 44% would stop shopping at major retailers that charged the fee. 

Only 13% would absorb the fee when it comes to small businesses, while 59% would choose another form of payment. But if the business was a major national or international retailer, just 10% would absorb the cost and fewer than half would break out cash or debit, Angus Reid said. 

A majority (82%) of Canadians polled say their primary purchasing card is linked to a loyalty program, which brings about concerns that the fee may reduce or mitigate the benefits. 

Just 16% of loyalty program users say a surcharge would not deter them from using their current card, while the majority (61%) say this would make them reconsider and do away with their current primary card.

After a recent class action settlement, retailers can pass on some of the interchange fees Visa and Mastercard charge merchants to customers. 

The federal government vowed to enter into negotiations with payment networks, financial institutions, businesses and other stakeholders to lower credit card transaction fees in its fall economic statement. 

With files from Rosa Saba for The Canadian Press and David Brown