Hoteliers say: StopStickingItToUs

OTTAWA, ON—The Retail Council of Canada (RCC) and a coalition of associations including the Hotel Association of Canada (HAC), Alberta Liquor Stores Association (ALSA), Ontario Accommodation Association (OAA), Ontario Restaurant Hotel and Motel Association (ORHMA) and the Canadian Restaurant and Foodservices Association (CRFA), launched “www.StopStickingItToUs.ca” last month.

This national campaign asking people to sign an online petition against big credit card companies and the banks that issue their cards, was timed to coincide with the federal election, set for Oct. 14. The groups called on candidates to weigh in on credit card transaction fees.

“Big credit card companies and their banks are taking advantage of local retailers, businesses and all Canadians by exploiting loopholes that keep the true cost of skyrocketing fees from the average consumer,” said Diane J. Brisebois, president and CEO of the Retail Council of Canada.

The campaign targets the more than $4.5 billion dollars worth of hidden credit card fees paid by Canadians each year, said a news release from the Hotel Association of Canada.
Interchange fees represent an enormous cost for average Canadians and any organization that accepts payment by credit card including merchants, charities, schools, restaurants, hotels, inns, motels, resorts, government services and others. The average Canadian household pays hundreds of dollars a year in interchange fees without even knowing it, as they are a hidden portion of the cost of virtually every transaction they make.

“Costs continue to mount for the lodging industry across Canada”, said HAC President Tony Pollard. “We are calling on government to put a stop to this unfettered and unjustifiable greed in the fees collected.”

“As an operator, you are being hit on all sides by rising food prices, rising energy prices, rising labour costs and disappearing profit margins,” said the CRFA in a letter signed by Joyce Reynolds, executive vice president, government affairs. “CRFA and other coalition members understand the financial pressures you’re facing and together we are committed to ensuring that your business survives and thrives in these challenging times.”

“The ORHMA is taking an active role as a strong member of a coalition of like-minded business associations who are joining efforts to take on rapidly escalating merchant payment card fees,” said ORHMA president Tony Elenis.

“Our members have seen three consecutive increases to credit card fees in the last 11 months, and we understand another processing fee increase and a new administrative charge that all merchants will have to pay are scheduled for this fall,” he added.

“The ORHMA heard from members that the additional fees will be costing them thousands this year.  We know that hoteliers and restaurateurs aren’t opposed to paying for service, but there needs to be a correlation between the value of the service delivered and the fees charged.
 
“Even though the cost of processing a $1 transaction is the same as processing a $100 transaction the fee paid by merchants on the $100 sale is higher because the fee is calculated as a percentage of the total sale.  The higher the sale, the higher the fee,” Elenis explained.

“Operators are already faced with increased costs for labour, utilities, and product and now they are faced with unjust fees from corporations taking advantage of a captive audience.”
A new poll conducted by Nanos Research found that:

o    55 per cent of Canadians had a poor understanding of the fees associated with credit cards.
o    63 per cent of Canadians believe that credit card fees are increasing with no noticeable increase in value.
o    77 per cent of Canadians believe that credit card companies are not fully transparent in explaining their fees for credit cards.

Nearly $2 of every $100 Canadians spend using credit cards goes directly to the big credit card companies and their issuing banks. Canada is one of the few industrialized countries in the world that doesn’t regulate these fees, which is why they are among the highest in the world—and they continue to escalate.

These unregulated and skyrocketing fees are of particular concern in the current period of economic softening in Canada, when consumers and businesses are pressured to be increasingly cost-conscious.