Small business balks at credit card fees

Beside her stores cash register, Susan Frost has a sign asking customers to pay with cash or debit.

Frost owns Jangles a bead shop in Thunder Bay. She said businesses pay more to take premium credit cards that offer rewards to consumers.

"Being a small business I get a lot of regulars, so it's something that I felt comfortable asking a lot of my customers if they would be willing to not use these higher-paying cards," she said.

The Canadian Federation of Independent Business said credit card companies take, on average, a 1.5 per cent cut from each transaction. But that applies to credit cards that dont offer rewards. That same cut can double for credit cards that offer rewards.

Federation president Catherine Swift said most consumers don't even know the merchant pays a fee.

Consumers 'annoyed'

Credit card companies sell their cards "to the consumers as 'look at all these goodies you're gonna get,' and then whack the merchant for the cost of all these goodies going to the consumers," Swift said.

"And when they found out they were kind of annoyed. Because they know their small merchants, their drycleaner, their retail store whoever they're patronizing."

Businesses like Jangles can display signs from The Canadian Federation of Independent Business that ask consumers to keep transaction fees down.

Frost said her request for cash or debit has been in effect for about six months, and it's made a small difference to her accounting.

But Frost noted she'll never turn down a sale even if a credit card is the only option.