Leave your credit card in your wallet… and pay less. Exhausted by the fees charged by the Visa and Mastercards of this world on each transaction, the owner of the Saint-Bock brewery in Montreal is now offering a 2% discount to consumers who pay the bill with a debit card or cash.
Martin Guimond, however, does not intend to ban credit cards, since this is the option chosen by 86% of his customers. But by launching the “At the restaurant without my credit card” movement on Wednesday, the one that serves beers, burgers and pulled pork dishes wants to raise awareness among its customers.
Each time they scan their credit card on the terminal, they must pay interchange fees ranging between 1.4% and 5%. Its objective: for the proportion of bills paid with Visa and Mastercard to fall from 86% to 60%. “In January, I had losses of $117,000, I gave $8,000 in fees to Visa and Mastercard,” he reveals.
On a bill amounting to $100, which increases to approximately $132.22 with taxes and tip, the owner of an establishment pays on average $5.30 in interchange fees if the consumer pays the bill with his or her credit card, gives Mr. Guimond as an example (see example).
The owner of the brasserie on rue Saint-Denis is obviously not the only one experiencing this situation. In Saint-Jean-sur-Richelieu, at the Matinée restaurant, François Roy sees the number of transactions made by credit card increasing from year to year. Consumers have retained habits adopted during the pandemic, where attempts were made to limit cash exchanges.
“Unfortunately, we are completely at the mercy of credit cards,” says Mr. Roy bluntly. With the increase in prices comes the increase in credit card fees. It has become one of my main expenses, as more and more customers use them, we are talking about more than 75% of transactions in my restaurant and it is increasing year after year. Customers are addicted to the bonuses and other bonuses offered by credit cards. »
PHOTO FRANÇOIS ROY, THE PRESS
Martin Guimond, owner of the Saint-Bock brewery
“I know that we are all dependent on our points,” Mr. Guimond also said. We want to receive $25 in three months or collect enough points to buy a vacuum cleaner, he illustrates. It’s a way to keep customers locked into credit cards. And people have less money, they pay by card, it becomes a habit.
“If you pay your bill now or in a month, it’s the same $100. Except if you do it now [en payant avec une carte de débit], that leaves us a lot more in our pockets to pay our employees, electricity and all other costs. »
By comparison, each transaction made with a debit card costs approximately 8 to 10 cents.
A symbolic discount
Mr. Guimond nevertheless recognizes that the 2% reduction he is offering may seem “symbolic”. “Of course it’s not much, $2 on a $100 bill, but it’s still $2 that the customer gets now. A bird in hand is worth two in the bush. I tell customers: I’m asking you to make an effort, not to pay by credit card, in return I’ll give you a small profit, the equivalent of what you would have received by paying with a credit card. »
The initiative was welcomed by François Roy, of the Matinée restaurant, who found “the idea of wanting to make things happen” excellent. However, he does not say he is ready to follow in the footsteps of Martin Guimond.
The Association Restauration Québec (ARQ) and the Canadian Federation of Independent Business (CFIB) also applaud the movement launched by the owner of Saint-Bock. Not all restaurateurs can adopt this idea of promoting Saint-Bock, however, believes Martin Vézina, vice-president of public and government affairs at the ARQ, referring in particular to gourmet restaurants.
“It’s a good initiative to educate our customers,” said Jasmin Guénette, vice-president of national affairs at the CFIB. We encourage owners to do this so that customers understand the high fees that apply when paying with a credit card, that the loyalty programs that are set up by Visa, Mastercard and banks are in fact paid by traders. »
Reductions in sight
Furthermore, in the spring of 2023, when it tabled its budget, the federal government announced the conclusion of an agreement with Visa and Mastercard to reduce credit card fees. This will come into force this year, in the fall. It will apply to businesses whose transaction threshold does not exceed $300,000 in annual sales with Visa and $150,000 with Mastercard. Interchange rates will thus fall below 1%. “Nearly three-quarters of our members [75 000] will be able to benefit from these reductions,” underlines Mr. Guénette.
“It’s not a perfect agreement,” he said, adding that the agreement should also include American Express, whose transaction fees are very high. We would also like the sales thresholds to be raised. »
Until then, Martin Guimond hopes that other restaurateurs will follow suit. “How can you help us?” Pay by debit,” he says.
The owner of Saint-Bock wants to test people’s receptivity over the next three months. If he sees that the number of transactions paid by credit card does not decrease, he will drop the discount. “We don’t want to bother people with this. »
Is this legal?
Does a merchant or restaurant owner have the right to encourage their customers to pay with their debit card, in return for a discount? Nothing in the Consumer Protection Act does not prohibit it, assures Sylvie De Bellefeuille, lawyer and director of legal services at Option consommateurs. ” This is not a problem. What would be illegal would be to do the opposite and charge an additional amount to those who use their credit card. » Since 2022, following the settlement of the class action brought in 2001 against Visa and Mastercard, merchants can now charge additional fees to customers who use privilege cards across the country. Only Quebec does not allow this practice under a provision of the Consumer Protection Act preventing the merchant from overcharging.
Calling all
What do you think of the proposal from the owner of Saint-Bock, Martin Guimond? Knowing that credit card purchases cost restaurateurs more than those paid with cash or debit card, would you be inclined to change your payment method? What might change your transactional behavior?
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