Application deadline EXTENDED for credit card class action settlement claims:

Undocumented & Simplified claims: NOW OPEN until December 30, 2022

Documented Claims: Open until December 30, 2022

 

As part of a class action lawsuit settlement, Visa and Mastercard have agreed to allow merchants to decide if they want to pass on the cost of accepting credit cards to their customers. Starting October 6, 2022, businesses will be able to charge an additional fee at the point of sale if a customer wishes to pay by credit card. 

Due to Consumer protection laws in Quebec, the option to surcharge will not be available to Quebec-based merchants on consumer transactions.

 

Did you know that the Credit Card Class Action settlement claim deadline for all sizes of businesses was extended to December 30, 2022? Learn more

As part of a class action lawsuit settlement, Visa and Mastercard have agreed to allow merchants to decide if they want to pass on the cost of accepting credit cards to their customers. Starting October 6, 2022, businesses will be able to charge an additional fee at the point of sale if a customer wishes to pay by credit card. 

Due to Consumer protection laws in Quebec, the option to surcharge will not be available to Quebec-based merchants.   

 

Eligibility 

Application deadline is December 30, 2022!

You’re eligible to receive a portion of the settlement if you:
 
•  Were a merchant in Canada at any point between March 23, 2001, and September 2, 2021,
• Accepted Visa and/or Mastercard credit cards as payment for goods and services,
•  Incurred merchant discount fees, including interchange fees.

How to Claim

Starting May 30, 2022, you can submit a claim through the Credit Card Class Action website. What you will need to know: 
 
•    Name
•    Contact information
•    Size of your business / annual revenues during the claim period (can be classified as a small, medium, or large business – see table below)
•    Attestation that you collected credit card payments at some point since March 23, 2001 – more information to come on details of attestation requirements
 
Note: No documentation is required for merchants classified as “small businesses”.

Claim Here

 

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Process

You will receive confirmation that your claim was submitted successfully. Your application will then be reviewed and either approved or denied.
 
If you are approved, you can expect to receive your funds before the end of 2022 by direct deposit or cheque (opting for a cheque will deduct $2 from your claim).
 
If you are denied, you will receive a decision notice. No appeal process exists for small business claims. If you have any concerns, you can speak to the claim administrator.

Close up low angle view of a man working from home on a laptop computer sitting at a desk surfing the internet

 

How Much You'll Receive

 

Merchant size Average annual revenue over the claim period Amount you can receive per year you incurred merchant discount fees
Small merchant Less than $5 million $30 / year (max $600)
Medium merchant Between $5 million to $20 million $250 / year (max $5,000)
Large merchant $20 million + $250 / year 

What is a surcharge? 

A credit card surcharge is any fee added when a customer decides to pay by credit card. It is different from a convenience fee which merchants can add to a transaction regardless of the method of payment. A credit card surcharge is only added to credit card transactions.  

Why surcharging matters

Credit card processing fees can be very difficult to track and come with a significant cost. Over the years, merchants have seen these costs rise, especially smaller merchants who often pay much more than larger companies to accept credit cards making it more difficult for them to compete with large companies. Businesses should be allowed to explain to their customers why their prices increase and decide if they will pass this cost to their customers. 

Until now, most businesses were not permitted to surcharge. Following a class action lawsuit, Visa and Mastercard are allowing businesses to pass along the cost of processing a credit card transaction to consumers.  

credit-card-transaction-800x600

Printable Posters & Templates

Whether you are looking to surcharge or encourage consumers to use alternatives like debit or cash, CFIB has posters, checklists, and email templates to suit your business needs.

Templates
Consumer_FAQ_on_CC_Surcharging
Consumer FAQ on Credit Card Surcharging
CC_Surcharging_Checklist
Credit Card Surcharging Checklist
CC_Surcharging_Client_Notification_Email_Template
Credit Card Surcharging Client Notification Email Template
Consumer FAQ on Credit Card Surcharging
Credit Card Surcharging Checklist
Credit Card Surcharging Client Notification Email Template

How to start surcharging?

Step 1) Considerations before surcharging

  • Does your business accept Visa or Mastercard?

  • Which acquirer do you use to process credit cards?

  • Which cards (product and brand) will you surcharge?
    You can choose to surcharge specific credit card products and brands, however, you may also need to equally surcharge other competing credit networks depending on your agreement with your acquirer. Call your acquirer to learn more. 

  •  How much will you surcharge customers?
    Surcharges are capped at 2.4% or the amount it costs you to accept those credit cards, whichever is less. This percentage or flat rate must be tied to the decision to pay with credit card rather than the good/service. The amount you charge will be your business decision.  
  • How will you share the surcharge information with your customers?
    Educating your customers about this change and its impact on them will be important to mitigating any misunderstandings. You will need to create posters to meet the surcharge disclosure requirements. To save you time and money, CFIB will be creating resources for you to use.  

At least 30 days before Surcharging:

Step 2) Notify your credit card network

Step 3) Notify your acquirer

Below is a list of acquirers and links to how they would like you to notify them of your choice to surcharge.  

NOTE: Some processors/acquirers may not be ready to allow surcharging. This list will be updated as we learn more. Should you come across different/incorrect information please contact our business help line at 1-833-568-2342. 

Acquirers & how to notify them about Surcharging: 
  • Adyen Canada Ltd. – How to configure your POS surcharge
  • Bank of America Merchant Services (BAMS) – TBA
  • Chase – TBA 
  • Desjardins – TBA
  • Elavon – Contact your Sales Rep or customer service (1-877-658-3884) to be put into contact with a Sales Rep.
  • Fiserv – TBA
  • Global payments – Will be ready to surcharge. More details TBA
  • Moneris – TBA. Call Moneris customer service (1-855-955-4891) to provide them with your name, phone number, and email. They will contact you when more information is available.
  • People’s Trust – TBA
  • TD merchant solutions - Find details at TD Business Banking. Email your contact information to tdmscode@td.com 
  • Nuvei – TBA
  • PSP Services Inc. – TBA 

Step 4) Notify your clients (Optional)

Avoid any misunderstandings by educating your clients directly about the new fee they can expect to see. Explain your reason for increasing prices and alternatives that can be used to avoid the surcharge. Coming soon, CFIB's template email notification for your customers, will be available to you. 

 

When Surcharging on Credit Cards

Step 5) Post a surcharge disclosure at the point customers enter your business or website

Get your free printable poster here.
 

Step 6) Post a surcharge amount/percentage disclosure

Post a surcharge amount/percentage disclosure at the point of sale or transaction, both in-store and online. Should a sale be over the phone, this must be disclosed verbally. Check out CFIB’s Point of Sale Surcharging Poster here

Step 7) Itemize the dollar amount clearly on the customer’s receipt

This can be produced on the receipt provided by the cash register or the point-of-sales machine.

Contact your electronic cash register or point-of-sale system company to get more clarity on how to capture the amount of the surcharge, display the amount on the receipt, and pass that information to your acquirer. Please contact your acquirer for more information if the process is not available in the acquirer links above. 

CFIB Takes On The Credit Card Industry

Credit cards may be handy for consumers – but they can be expensive for merchants like you! Since 2008, CFIB has been negotiating with government and the credit card industry to level the playing field and lower processing fees for your business.

How CFIB is helping merchants like you:

With your support, we will continue to fight for:

  • Lower interchange fees
  • No swipe fees on GST/HST
  • More fairness for merchants on “chargebacks”
  • No fees on prepaid cards and refunds

Join Now

Smiling customer paying by credit card at the bakery

FAQ - Surcharging

What is surcharging?

A credit card surcharge is an additional fee that a merchant can choose to charge a consumer’s bill when they pay with a credit card at the point of sale.

Can I surcharge my clients today?

Yes. Visa and Mastercard allow you to surcharge your clients as of October 6, 2022. Each credit card network (e.g., Visa and Mastercard) will open a registration process for Merchants to identify their intent to surcharge and agree to disclosure agreements (such as a minimum of 30 days’ notice to clients) before starting to surcharge customers. 

If your business operates in Quebec, surcharging will not be available to you, as the provincial Consumer Protection Act does not allow it.

Can I charge a fee on Interac payments?

Yes. The ability to add a fee to Interac debit card transactions has been and continues to be available to merchants.

Is a surcharge the same as a convenience fee?

A surcharge is different from a convenience fee.
A surcharge is any fee added to a transaction for using a credit card.
A convenience fee is a fee that merchants may impose on all transactions no matter the method of payment. These can include debit card transactions (Interac).

If a merchant is eligible to surcharge and impose a convenience fee, they cannot add both on the same transaction.

Which credit cards will I be able to surcharge and by how much?

Merchants can pick and choose which credit card brands or products they would like to surcharge to a maximum of 2.4%. It will be your decision. You may decide to only surcharge premium cards that charge your business higher fees. The way you choose to surcharge may lower your surcharging maximum. 

Brand-level surcharges will be capped at the lesser of the merchant’s average effective merchant discount rate paid to the acquirer for Credit Card acceptance or the 2.4% cap.

Product-level surcharges will be capped at the lesser of the merchant’s cost to accept that particular credit card product or the 2.4% cap.  

Can I surcharge in person, over the phone and for online transactions? 

Merchants can choose any or all environments in which they surcharge clients. For example, a merchant can choose to only surcharge on online purchases.  

Can I decide to surcharge discounted or sale items only?

No, surcharges should be specific to the client’s choice to pay for their transaction by credit card. 

Should I register to surcharge as soon as it becomes available?

Once available, registering for surcharging will continue to be available for merchants moving forward. Should you wish to surcharge as soon as possible, please know that a 30-day notice period must pass before you can surcharge customers. 

Do I charge sales tax on the surcharge?

We are awaiting information on this. We have heard the disclosure could be as simple as a line item after the subtotal with a description indicating the amount is a surcharge. 

Who do I contact for technical issues with registering to surcharge?

Each credit card network has set up its own registration system to monitor who will begin surcharging. Please contact the credit card network and/or acquirer with whom you are registered. This will depend on the rules of your surcharging agreement.

What is the deadline to register?

There is no deadline to register, however, before implementation, there is a 30-day notice requirement.  

On a chargeback, do surcharge fees return to the customer?

On a chargeback, the purchase amount plus the surcharge should be credited to the cardholder. On a partial chargeback, the corresponding percentage of the surcharge should be returned.  

Is surcharging permitted in Quebec?

Consumer protection laws do not allow for surcharging on consumer transactions. This applies regardless of where the consumer resides. However, businesses may surcharge on business transactions (B2B), as consumer protection laws do not apply.

FAQ - Credit Card Class Action Lawsuit & Claims

What is the deadline to submit a claim to the settlement?

  • Undocumented & Simplified claims: Now open until December 30, 2022
  • Documented Claims: Open until December 30, 2022
  • You cannot submit a claim after the deadline. Any questions or concerns about the deadline can be directed to the Claims Administrator.

My business is now closed, am I still eligible?  

Yes, if you collected credit card payments at any time between March 23, 2001, and September 2, 2021, you will be eligible to claim money from this settlement. 

What is the cost of submitting a claim to the settlement? Do I need a third-party provider?

There is no cost to submitting a claim to the settlement. The process is simple and requires no documentation for small businesses. Some third-party providers may offer to submit your claim on your behalf for a fee. 

How do I report the settlement money in my taxes?

According to the Canada Revenue Agency, this settlement money should be treated as income and is subject to tax. 

Can I appeal if my claim is rejected?

No, undocumented claims cannot be appealed. An appeal process only exists for medium and large businesses who decide to submit a documented claim. These must be sent to an arbitrator within 30 days of a Decision Notice and require a $150 filing fee.

How does the Credit Card Class Action Settlement tie into surcharging? 

In the settlement of the lawsuit, credit card networks, such as Visa and Mastercard, agreed to allow merchants to pass on their added fees to customers. This option will become available October 6, 2022.  

This changes the contract rules between the credit card networks and the merchants. Should you operate in Quebec, you will still not be able to surcharge as the provincial Consumer Protection Act does not allow it.  

How can I learn more about the Credit Card Class Action lawsuit?

  • Check out the Credit Card Class Actions website 
  • Register to stay informed and receive direct notice of any important developments, including when to make a claim

 

Who do I contact for issues or complaints with my Credit Card Class Action settlement claim?

Assistance can be found by contacting the Claims administrator, the lawyers from the class action, or CFIB Business Advisors (1-833-568-2342).