Competition Tribunal releasing surcharge decision July 23

Canadian retailers would like to make customers pay surcharges on some credit card transactions. They told the Competition Bureau that credit card issuers were jacking up the fees that merchants had to pay for premium credit cards.

After several years of study, the Competition Tribunal will release its decision next week. I published a blog post in May, giving both sides of the story.

The Canadian Bankers’ Association (CBA), which represents credit card issuers, is trying to spin the story in its favour. Here are comments from media relations director Maura Drew-Lytle, sent to me in case I planned to cover the release.


The federal Competition Tribunal is considering whether or not to eliminate two credit card rules which currently benefit consumers. We have now been told that this long-awaited decision will be released publicly on Tuesday, July 23, 2013.

Here is some background information that may be helpful if you decide to cover the Competition Tribunal’s decision. The outcome could have a profound impact on our well-functioning credit card system in Canada, how and where Canadians use their cards and the rewards programs they have come to value.

Background on Competition Tribunal Hearings
In December of 2010, the Competition Bureau announced that it had filed an application with the Competition Tribunal to strike down two credit card rules as anti-competitive.

The first, the honour-all-cards rule, requires that if a merchant says it accepts a Visa or a MasterCard branded credit card, then it must accept all credit cards of that brand.

The second is the no-surcharging rule, which prohibits merchants from adding an extra charge – a “retail checkout fee” – to customers paying with a Visa or MasterCard credit card.

The Competition Bureau filed an application with the Competition Tribunal to strike down these rules, which it calls “restrictive and anti-competitive rules imposed on merchants who accept their credit cards.”

The Competition Tribunal, made up of three independent panel members, heard the case in the spring of 2012, taking testimony from a witness list that included merchants, credit card companies, economic experts and the banking industry. The CBA was an intervener in the case on behalf of credit card issuers.

The banking industry believes that these rules are important protections for consumers when they use credit cards and overturning these rules could have a very negative impact on how consumers use their credit cards.

Honour-All-Cards Rule
Let’s assume for a moment that the honour-all-cards rule is struck down.

You’ve taken your family out for dinner and when you pull out your Visa card to pay, you’re told that while the restaurant has a sign in the window showing they accept Visa, they don’t accept the kind of Visa card you have.

Or you could be in the grocery store with a cart full of groceries. You wait patiently in the checkout line but, when you offer your MasterCard as payment, you’re told that the store accepts some MasterCards but not yours.

Eliminating this rule would cause a great deal of uncertainty and frustration for consumers, because they may not know whether their credit card would be accepted until they finish their shopping and try to pay for their purchases.

On top of all that, the card that consumers use most to accumulate rewards points may not be accepted as much any more.

Eliminating the honour-all-cards rule could also hurt retailers. The Consumers’ Association of Canada did public opinion research and found that if retailers began accepting only certain types of Visa and MasterCard credit cards, 79 per cent of Canadians would simply go to a different retailer.

No-Surcharging Rule
Overturning the no-surcharging rule would allow retailers to add an extra charge, a “retail checkout fee,” to a purchase made with a Visa or MasterCard credit card.

Retailers are already allowed to offer a discount for other forms of payment, but very few do. The Consumers’ Association of Canada is strongly opposed to eliminating the no-surcharging rule, as are 84 per cent of Canadians according to their research.

Australia provides a good example of what can happen when surcharging on credit card purchases is allowed.

In 2003, Australian regulators allowed surcharging in the hopes that retailers would pass on the cost savings to consumers. But that hasn’t happened.

In fact, some retailers are imposing surcharges that are much higher than the cost of their credit card acceptance, sometimes double according to consumer groups in that country.

So Australians are paying twice for retailers to accept credit card payments.

Retailers Benefit from Credit Card Acceptance
There’s one thing that has been missing in the whole debate about the cost of credit card acceptance, and that’s the many benefits that credit cards give to retailers.

Credit cards provide retailers with fast, guaranteed payment that can reduce lines at the check-out. If every payment transaction took an extra 30 seconds, that would add another 27 million hours of staff time each year.

Retailers have many expenses that are part of their costs of doing business: rent, wages, utilities, supplies, technology and a fee to accept credit cards, to name a few.

But few people know that cash is one of the most expensive forms of payment for retailers, if you include time and effort spent handling, counting, reconciling and depositing cash every day, not to mention higher security costs, such as armoured transport and safety concerns for a store’s employees.

Credit card payments allow merchants to offer customers credit without taking on the risk. New payment options, such as contactless cards, also benefit merchants and make it easier and faster for customers to make purchases.

Canada has a very sophisticated credit card industry, with a lot of choice and competition for consumers. If either the rule on no-surcharging or on honour-all-cards is eliminated, the retail experience for Canadians could be drastically changed, and not for the better.

We will be commenting when the Competition Tribunal decision comes out and have spokespeople available for interviews then.

Thanks, Maura


Why did Aeroplan eliminate expiry date for points?

The announcement took everyone by surprise. Aeroplan was killing its seven-year redemption deadline for points, scheduled to start on Jan. 1, 2014.

Aeroplan’s sponsor Aimia mentioned the cancellation of the harsh redemption policy in a June 27 news release. It also unveiled a new credit card partner (TD), but only if previous partner CIBC didn’t try to match the TD deal by Aug. 9.

Did Aeroplan decide not to date-stamp points because of a nationwide class action lawsuit by Merchant Law Group?

When I asked that question on Twitter, I heard from Aeroplan spokeswoman Christa Poole. She said members really disliked the deadline. The closer it came, the unhappier they were. The class action simply reflected that animosity.

A senior executive said the same thing to Star columnist Adam Mayers:

The unhappiness became clear during research into the current changes, says Kevin O’Brien, Aeroplan’s chief commercial officer.

“That one was huge,’ he says. “Aeroplan rewards play an aspirational role for members. They accumulate points to do something special and like to plan ahead. So the expiry thing was a big deal.”

However, there’s some bad news for Aeroplan members. They will need more points for business class and first class reward flights to Asia, North Africa, the Middle East, Australia and New Zealand.

The increase adds up to 20 per cent, coming on top of another increase in award redemption levels put in place in 2011, says The Points Guy website.

With a strong competitive market, it is about time Aeroplan cancels mileage expiration. Fortunately, more and more programs are going in the direction of “no mileage expiry.”

JetBlue just did the same thing and Delta doesn’t have mileage expiration either. However the 12-month expiry policy is still active. Members will have to continue to earn miles or redeem them each year in order not to lose their miles.

As an Aeroplan member, I’m glad I don’t have to make a mad dash to cash in my precious miles. But I’m not thrilled with the increase in redemption levels.

Like most collectors, I’m aspiring to take longer flights in more luxurious seats. This announcement means I’ll need more time to save more points than I needed before.

Waiting for a decision on credit card surcharges

Canada’s Competition Tribunal will soon release a ruling on a case against Visa and MasterCard, started in 2010.

The credit card companies prevent retailers from refusing to accept “premium” credit cards that offer reward miles, points and other benefits for consumers, but for which merchants pay higher processing fees.

Some retailers, such as Sam James in Toronto, have switched to a cash-only format to avoid paying high credit card fees that hurt their profits.

If the tribunal sides with retailers that want to pass on credit card fees directly to customers, Canadians could be hit with big surcharges on purchases, warns the Consumers’ Association of Canada.

Here is a guest post by Angie Picardo, a staff writer with Nerd Wallet, about how surcharge fees may be coming to Canada.


There are three rules that both Visa and MasterCard enforce for retailers opting to accept their cards for payment.

1. Retailers must accept all cards

If a company opts to accept either MasterCard or Visa, they cannot differentiate between the types of card accepted. For example, retailers cannot specify that they will accept a MasterCard SmartLine Platinum but refuse a National Bank Allure MasterCard.

2. Retailers cannot discriminate

If a customer opts to use a credit card with a higher card acceptance fee, that card must still be accepted as a suitable means of payment and the customer cannot be treated differently for deciding to choose that specific card.

3. Retailers cannot require a surcharge

Retailers are not allowed to independently require additional surcharges to customers who pay with Visa or MasterCard.

What’s the problem with that?

The driving force in the case against Visa and MasterCard is that they hold a near monopoly over credit cards in Canada, as both companies together comprise about 92 per cent of the market.

As Visa and MasterCard release “premium” credit cards, most of the cost is subsidized by merchants. The Competition Bureau estimates that high transaction costs result in businesses paying for about $5 billion in hidden fees annually.

Canada is not the first country to tackle credit card transaction costs and surcharging.

In the United States, Visa and MasterCard faced similar charges and opted to settle out of court in July 2012, allowing retailers to offer surcharges.

It’s predicted that few businesses will impose surcharges, since they have integrated transaction costs into their prices. Also, they’re worried about scaring off customers with increased fees.

In Australia, credit card surcharges were allowed in 2003. Several businesses took advantage and started implementing unreasonable surcharges to compensate for transaction costs.

Responding to an outcry from consumers, the Reserve Bank in Australia is giving power back to credit card companies and allowing Visa and MasterCard to put limits on acceptable surcharge rates.

Although hearings for the Canadian case against Visa and MasterCard have ended, a formal decision has yet to be issued and a report is still in the works.

Recently, Visa increased its transaction rates to merchants by one third and issued a new “ultra premium” card, which comes with higher fees for businesses than the premium cards already on the market in Canada.

MasterCard followed Visa, increasing transaction costs to merchants by 20 per cent.

Consumers, merchants and credit card companies are waiting for the Competition Tribunal’s ruling to decide on their next play.

Angie Picardo is a staff writer for NerdWallet, a personal finance website that helps consumers save money and make smarter decisions about their personal finances, travel plans, or higher education.

Air Canada should improve customer service

I don’t have any complaints about the service on Air Canada flights. But I find the airline often falls short in trying to resolve problems that crop up after a flight.

Years ago, my mother and I waited more than two hours to get our baggage after a one-hour flight from Montreal to Toronto. The aircraft had gone back to the hangar by mistake with many suitcases still on board.

When we complained about the extra cost of parking for my husband who was picking us up, we were told to write a letter to Montreal. This was a nuisance. Why couldn’t Air Canada just hand out $5 or $10 gift cards to us on the spot?

I went to the trouble of writing to Montreal, but still didn’t get any compensation for the error. Then, I complained to the airline’s media contact, resulting in flowers for my mother and Aeroplan points for me.

Air Canada still acts like a monopoly — smug, slow to respond and aiming for customer satisfaction rather than delight. It can afford to live with criticism, since it has locked up many long-haul routes that its domestic rivals can’t offer.

While most companies answer emails within days. Air Canada promises to respond within three to five weeks.

Lost baggage complaints are handled by a call centre in India, which isn’t popular with Canadian customers. Check out Sylvia Duckworth’s lament about her missing laptop at her blog.

After writing columns about Air Canada, I started hearing from readers. Kay-Anne, for example, was upset not to get an apology for poor service when flying home from Antarctica, with a stop in Chile.

“Each time, any response from them came in an envelope with a return address from their head office for customer service in Calgary,” she said.

“My husband and I were so displeased with the lack of satisfaction that when we were next in Calgary, visiting our son, we went to the address listed on the correspondence. We hoped to speak to an actual person, who might at least acknowledge that the company had failed our small group miserably.

“We had great difficulty finding the address and drove by where it should have been several times. Finally, I went into the pharmacy, which seemed to be at the correct address and asked where Air Canada’s customer service office was.

“The lady sheepishly told me I was at the right place. Air Canada Customer Service is a post office box number in a Shopper’s Drug Mart in Calgary.

“You can interpret from our experience and those of others you have written about that Air Canada, in fact, provides no support to customers with genuine concerns.”

WestJet has built its business on showing special care to its “guests.” (No one refers to them as customers.) I rarely get any WestJet complaints and when I do, I find they’re resolved in an instant.

Porter Airlines tries to excel by offering free snacks and cappuccino at its Toronto Island terminal and free wine on board. Passengers feel pampered finding leather seats throughout the plane, not just in . executive class.

Air Canada needs to respond to complaints more quickly. It needs to value its customers’ energy and time spent straightening out messes. It needs to appoint an ombudsman (a position that once existed and was wiped out) to do independent reviews of disputes.

This large airline is protected from domestic competition on many routes. Let’s put pressure on it to choose excellence, rather than mediocrity, in helping customers with their problems.

WebPiggy took my $100 and won’t give it back

After a bad experience, I’ll never buy a prepaid coupon again. And many people are telling me the same thing.

I paid $100 for $400 worth of meat at a Toronto store called The Butchers. Owner Marlon Pather couldn’t fulfill the orders and closed his doors for redemptions as the deadline loomed last September.

No problem. The deal site, WebPiggy, gave me a credit with no expiry date to use for other items.

But a few months later, my $100 credit is gone. I get an email that says WebPiggy has an alliance with Buytopia to feature its deals.

“Any WebPiggy credits are non-transferable, which means that you may not use them towards purchases on Buytopia, nor are they eligible for cash refunds,” says Trishelle in customer service.

How ethical is that? First, WebPiggy didn’t stand behind a supplier who reneged. Then, it didn’t stand behind its own pledge to customers.

Owner Harold Moore, are you there? Do you have anything to say to all the people you let down? Some spent $500 on coupons they weren’t able to use.

Another coupon site, Dealfind, also caught up in The Butchers fiasco, was acquired by TeamBuy. Owner Ghassan Halazon did talk to CBC Marketplace when asked about its restrictive refund policy in an April 12 show.

Be patient, Halazon said. As we grow, we will give refunds beyond the first few weeks. We will do better.

Who wants to wait? Groupon went public at $20 in November 2011, but its its stock price has dropped to $6.30. Investors are souring on the business.

After being burned, I’m dealing only with companies I trust to give my money back if a deal disappoints. If all of us do that, we can force the marginal players out of business.

How I resolve consumer issues for readers

I love my job. There’s nothing more rewarding than helping people fix problems that weigh them down. My daily thank you notes are fun to read.

In case you wonder how I can turn a corporate No into a Yes, here’s a guide.

What is the first step when readers ask for help?

I ask them to send me an email with all the details, including their contact information. Then I forward it to my contacts at large companies, asking them to review it.

What is the key to writing an effective email?

Keep it short. Use bullet points. After a few sentences, start another paragraph. Be clear what you want the company to do. Put your demand right at the beginning.

What if you prefer to call or meet in person?

I find talking on the phone is time-consuming. I rarely do face-to-face meetings for the same reason. Forwarding emails is fast and effective. That’s how I work.

How can I persuade companies to reconsider how they treat people?

I work for Canada’s largest newspaper, where I’ve been writing three columns a week for 15 years. My contacts know there’s a good chance I’ll write about them in the Toronto Star or my blog (or both).

Are there some kinds of complaints I don’t handle?

I’d love to help everyone who asks for help. But my email load keeps growing and I have to set limits.

I don’t handle complaints about workplace issues and landlord-tenant matters.

I don’t handle complaints about small companies. I look for household names.

I rarely handle complaints about new or used cars that don’t work. They require a technical expertise I don’t have.

Can I resolve problems with companies that are going under?

An insolvent company is a nightmare for consumers. Any remaining assets go to the landlords, the tax department and large creditors. There’s usually nothing left for customers who are owed money. You can’t expect me to perform miracles.

What is the secret of my success?

I focus on companies with a strong brand to protect. They advertise like crazy and want to be seen as good guys. They don’t like to be the subject of a critical column in a big daily newspaper.

When forwarding emails, I try to be friendly, courteous and respectful at all times. Insults and sarcasm don’t work.

How can you do better with your own complaints?

Start by saying how much you admire the company. You’re a loyal customer and you want your loyalty to be valued. You’ll consider leaving if you can’t get satisfaction.

Keep your emotions under control. Always be polite. Don’t use threats or confrontation. Stay calm.

How can you get companies to pay attention to you?

Try to escalate your complaint to a higher level. If you’re stuck in a call centre, hang up and start using Google.

Search for phone numbers and email addresses of company executives. Check the Better Business Bureau, which often has contact information.

Send emails to others outside the company, such as government, nonprofit groups and the media. The company should know that others are watching to see how it responds.

“Create a circle of eyes for the problem you’re trying to solve,” says Franke James, who wrote a chapter for my book on how to fight a company in the court of public opinion. “Increase the number of eyes dramatically by using the power of social media.”

Where can you learn more about how to fight back?

I’d love you to read my book, which has step-by-step instructions on mounting effective arguments in all kinds of transactions.

Here’s a brand-new review in a blog I like a lot, Canadian Mortgage Trends.

“The book is pretty inexpensive,” says blogger Robert McLister, “so the odds are good you’ll find one tip out of 81 that will offset the price.”

At last, new rules for water heater sellers (and others)

Here’s a story posted at the Star’s website today by Rob Ferguson in our Queen’s Park bureau. Let’s hope the bill is passed speedily in the Ontario Legislature.

All the MPPs and their staff must be sick of getting complaints about aggressive water heater pushers.

I’m frustrated with the continued exploitation of seniors, the unemployed, students, renters, newcomers to Canada and all the homeowners who post signs at the door saying No Solicitation — and still get pestered.

Ontario is taking aim at aggressive door-to-door water heater sales, saying complaints about bad apples in the industry are second only to collection agencies.

Consumer Services Minister Tracy MacCharles said she will introduce legislation soon to double the “cooling off” period to 20 days for people to cancel contract signed a the door.

The bill, if passed in the minority legislature, would ban door-to-door sales companies from installing water heaters during the 20-day period, require them to make follow-up telephone calls confirming sales and write contracts in plain language.

“This is an area of consumer concern,” MacCharles said at a west-end RONA store, noting some sales people say they’re with a consumer’s existing water heater supplier and there to do an inspection.

One tactic is to tell homeowners their hot water heaters are in dangerous condition.

“It’s a safety issue so sometimes people listen to the aggressive pitch,” MacCharles said.

The 20-day ban on installations is designed to short circuit those high-pressure sales.

If the rules are not followed, new suppliers will be forced to pay any cancellation fees the homeowner faces from the existing supplier.

The non-profit Homeowner Protection Centre applauded the bill, which it has been pressuring the government to implement.

“My advice to consumers is if you’re at all unsure, don’t sign,” said executive director Michael Lio.

“Take your time, talk to your current supplier, compare what you’re paying now and what you’re going to be paying.”

Lio said he “never” signs any deals at the door.

“I don’t have time to read all the brochures…think of all the skill-testing questions.”

Think before buying at the door

HRAI Door-to-Door - small

As the Ontario government considers a crackdown on door-to-door sellers, check out this infographic. (Click to enlarge.) It shows how much trust is placed in different types of services sold at the door.

If you’re unsure of the current law, the Ontario Ministry of Consumer Services has information on dealing with door-to-door sellers. Here’s a guide to your rights.

Here’s a story about a vacuum cleaner salesman who wouldn’t leave the home of an elderly widow until she signed a deal. She complained to the ministry and got $1,000 in restitution — and was allowed to keep the vacuum cleaner.

Water heater rentals and removals are high on the list of door-to-door offenders. Here’s a link to the ministry’s consumer beware list, where you can search by category.

And just for fun, check out the Kijiji ads for door-to-door sellers in Ontario. You find the usual suspects here (lawn care, burglar alarms, heating and cooling).

You can also find several ads for Bell, which is looking to sell home phone, Internet and TV by knocking on doors in multi-unit apartments.

“We are looking for individuals who are hunters (by nature),” say the Bell ads. “Opportunity to earn up to $70K+.”

Bell already pesters current and former customers by telemarketing and direct mail. Now it will be showing up at your door. Is there no privacy?

Another contest to win my book

You can get my new book, Fight Back, for free if you leave a comment about what annoys you as a consumer and your comment is the 10,000th at my blog. All irritants, large or small, will qualify.

JR was upset with Air Canada when a seat didn’t recline into a bed, as promised, on a flight to Australia. He paid extra for the seat feature, but couldn’t get the money back when he complained.

Air Canada refused to sweeten its offer of a future discount or Aeroplan points, even after I asked media contact Peter Fitzpatrick to help. So I’m posting the correspondence here for all to see.

Group buying coupons are also an issue. Dealfind used to be flexible about giving refunds when a merchant refused to supply a service.

But Dealfind has a new owner, Team Buy, which restricts refunds to a very short period. And after one year, it won’t even issue a credit.

TeamBuy will generally only refund the purchase price of a TeamBuy gift card if received within seven calendar days from the date of purchase. Exceptional circumstances will be handled on a case-by-case basis.

If refunds are granted after 7 days, they will be in the form of a credit to be used exclusively at

I’ll post a few Dealfind/Team Buy complaints as well. That should get me close to my 10,000 target by the end of this weekend.

Please write reviews of my book at or You can find four there already.

CONTEST WINNERS BELOW: Two people have won a free copy of my book (#9,999 and #10,000). The contest is now closed.

New milestone: 10,000 comments at my blog

When I started this blog, I hoped to write new posts at least once a week. This is post #382 in 310 weeks (about six years), showing I surpassed my admittedly modest goal.

I also have 9,950 comments posted here. The 10,000 milestone approaches this month.

Of course, that’s a fraction of the feedback at other sites, such as the Smitten Kitchen blog, where Deb Perelman answers readers’ cooking questions and has 150,000 comments.

Your comments add great value to my website. You share your experiences and tips. You guide each other on how to resolve problems and reach key executives. It’s self-help to the 10,000th degree.

Employees of the companies I write about leave comments too, apologizing for poor service and decrying the constraints within which they operate. See what Gary says, for example, at the end of this Home Depot post (comment #106, Feb. 26, 2013).

Thanks to everyone for sending me your questions, opinions and stories. Your input helps me stay on top of the trends.

I’m doing lots of publicity for my book, Fight Back. Here are some recent highlights.

On Feb. 22, I was interviewed by Amanda Lang and Rudyard Griffiths on the Lang and O’Leary Exchange on CBC TV. Co-host Kevin O’Leary was off that day.

On Feb. 23, I appeared on Fresh Air, a CBC radio weekend show, hosted by Mary Ito.

On Feb. 28, I answered readers’ questions on Ontario Today, a CBC Radio noontime show. One caller talked about how I’d helped get Enbridge Gas to compensate him after ruining his front porch stairs.

On March 2, I spoke at the Revue Cinema, which is operated by a non-profit community group. My PowerPoint presentation looked great on a movie screen.

On March 5, Globe and Mail columnist Rob Carrick and I will talk to the Credit Association of Greater Toronto, an industry group, about the use of credit scores to set rates for credit cards and lines of credit.

And on March 11, I’ll speak to the Toronto Dollar Supper Club about fighting back. The dinner ($30) is open to anyone who wants to attend.

I also want to mention FAIR Canada, the investor advocacy group that wrote a great report on putting clients’ interests first. Check out their Investor Resources section here. I’m on the board and recently became the chair.

Since RRSP sales season just ended on March 1, I’m posting a few comments from readers about their investing experiences below.