Credit card surcharge, explained
The rules come from the card networks’ class-action settlement, and they are tight. Mastercard and Visa both require 30 days’ written notice to the network and the acquirer before the first surcharge, cap it at the lesser of the merchant’s average card cost and 2.4%, forbid it on debit and prepaid cards, and require the fee to be disclosed at the point of sale and printed as a dollar amount on the receipt. The Financial Consumer Agency of Canada tells clients to expect up to 2.4% more.
Quebec is the exception, and it is absolute. Section 224(c) of the Consumer Protection Act bars charging more than the advertised price, which may leave out only GST and QST, so a Montreal shop cannot add a card fee at the counter. One tax wrinkle applies everywhere else: the CRA says a separately disclosed surcharge is not subject to GST/HST.
The mistake shops make most is deciding the surcharge is worth it. On a $45 cut a 2.4% fee is $1.08, and it is the last thing the client sees before deciding on the tip. Most shops that run the numbers raise the menu price by a dollar instead, which recovers the same money on cash and debit too and never shows up as a line on the receipt.
BarberFlow has no surcharge setting, on purpose. The shop’s card cost is 2.8% + $0.30 per card transaction with no monthly fee, so the cleanest way to recover it is in the menu price, which the pricing page works through shop by shop. Cash and Interac Debit are never surcharged, and a Quebec location is never put on the wrong side of section 224.
See PricingFrequently asked questions
Can a barbershop charge a fee for paying by credit card in Canada?
Yes, outside Quebec, since October 6, 2022. The fee cannot exceed the shop’s own average card cost or 2.4%, whichever is lower, needs 30 days’ notice to the acquirer and the card networks, must be disclosed before the sale and printed on the receipt, and cannot be applied to debit or prepaid cards.
Is a credit card surcharge allowed in Quebec?
No. Section 224(c) of Quebec’s Consumer Protection Act requires the price charged to be the price advertised, with only GST and QST on top, so a surcharge at the counter is unlawful.
Do I charge HST on a credit card surcharge?
No. The CRA’s GI-200 says a surcharge that is disclosed separately from the price of the service is not subject to GST/HST.
