Here’s the good news: Airfares have declined in Canada. The bad news? You might wind up paying more in added fees. WestJet, along with several U.S. airlines, recently hiked its checked-bag charges. And Flair Airlines has a new fee: a charge for paying for your flight with a credit card.
There are credit cards that already charges annual fees, owners of those cards technically get charged twice for the credit card.
Maybe they can raise this as an issue
Times are slowly changing. IIRC there used to be credit card processor rules about not charging different prices, but those have been found to be anti-competitive.
I actually welcome credit card fees. Why should I need to give all of my transaction data to one of 2 or 3 companies so that I don’t lose 1-5% on all of my purchases? If people find credit cards more convenient then that is great, but others shouldn’t have to pay for their preferences.
I don’t really get your complaint in the last paragraph. How are you losing money on transactions?
If people find credit cards more convenient then that is great, but others shouldn’t have to pay for their preferences.
It sounds like you’re saying that people who don’t use credits cards are somehow subsidizing those who do. I’ve never heard of that before and it sounds wrong to me. Merchants are usually the ones who pay transaction fees, not customers.
Merchants are usually the ones who pay transaction fees, not customers.
And where does the merchant’s money come from? The customers.
So if most customers are using cards the store is making ~2% less money. This will eventually turn into a ~2% price increase to maintain their profit margins. If you pay with a credit card you will get most of this back in rewards, but if you aren’t using a credit card this is just extra cost that you lose.
This is quite different in the EU where there are strict fee limits for credit card transactions so the cost of accepting credit cards is similar to the cost to handle cash. You will also notice that there are basically no credit card rewards in the EU because of this. Canada does have some regulation so isn’t quite as bad as the US is, but in general processing credit cards is more expensive than accepting cash for businesses.
So basically credit card fees cost businesses money, so they raise prices to compensate. If you pay with card you can get rewards to get most of this price increase back. However for those who don’t use cards they just lose this money. It is basically a zero-sum game but you lose if you don’t play. (Especially those who are less wealthy so don’t have good enough credit rating to get a high-rewards credit card.)
This is of course a bit of a simplified view of the situation, not all credit card rewards are directly funded by merchant fees. However at the end of the day the cost of processing cards tends to be higher than the cost of handling cash, so the businesses will have to raise prices to account for that.
I think it would be great if businesses directly passed the cost of accepting cards to customers. That way the customer can decide if the extra cost is worth it for the convenience and rewards. Customers who prefer not to use cards then don’t get an increased price for no benefit.
I don’t really think it’s reasonable to expect businesses will do anything to benefit customers though. Right now they have those costs accounted for in pricing, as you’ve stated. If they are allowed to charge fees for credit card use, they will keep their prices the same and simply add a further cost to the customers using cards. They’re not going to lower prices.
I believe your situation will simply result in higher costs for everyone while the business profits more than ever.
Yes, that is also true. Prices are not directly related to cost, but to consumer’s willingness to pay. However in the long term there is a pressure to provide low prices and lowering cost will allow that.
Discount carrier Flair Airlines has raised some other fees, and added a surcharge when customers pay for their flight with a credit card.
The increase comes on the heels of a $10 hike WestJet introduced four months ago for passengers who choose to check their bag with an agent at the airport.
WestJet spokesperson Julia Brunet told CBC News in an email that baggage fees allow the airline to “keep base fares lower for all travellers.”
Alaska Airlines said in an email it needed to adjust its fees to “navigate rising operating costs – including high fuel prices.”
In an email to CBC News, Air Canada spokesperson Peter Fitzpatrick would only say the airline is “aware of these trends” and has made no recent changes to its baggage policies.
Through an internet archive search, CBC News discovered that sometime after June 8, the airline increased the charge to book or change a flight over the phone from $15 to $25.
The original article contains 765 words, the summary contains 146 words. Saved 81%. I’m a bot and I’m open source!
The fact that Air Canada and Air Transit both charge extra for baggage for international flights now irks me to no end. Should leave this kind of BS to discount flight companies.
Allegiant airlines tried to charge me $5 to print out my boarding pass. In order to not pay it I had to stand at the counter using their shitty website to check into the flight so I could get my boarding pass on my phone before I could check my bag.
These are the same airlines that now have multiple announcements per flight begging people to please check their bags because there’s no room left in the cabin. These idiots keep firing into their own feet and wondering why it hurts.
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Fuck these cowards for not building THEIR costs into a legitimate selling price. Credit card fees are your expense of being in business, not mine.
Unless you’re ready to accept payment by cash or cheques, fuck right off with that noise.
There are credit cards that already charges annual fees, owners of those cards technically get charged twice for the credit card.
Maybe they can raise this as an issue
Wasn’t there a big thing a while ago about telecoms charging credit card fees? I was pretty sure they lost that battle.
Times are slowly changing. IIRC there used to be credit card processor rules about not charging different prices, but those have been found to be anti-competitive.
I actually welcome credit card fees. Why should I need to give all of my transaction data to one of 2 or 3 companies so that I don’t lose 1-5% on all of my purchases? If people find credit cards more convenient then that is great, but others shouldn’t have to pay for their preferences.
I don’t really get your complaint in the last paragraph. How are you losing money on transactions?
It sounds like you’re saying that people who don’t use credits cards are somehow subsidizing those who do. I’ve never heard of that before and it sounds wrong to me. Merchants are usually the ones who pay transaction fees, not customers.
And where does the merchant’s money come from? The customers.
So if most customers are using cards the store is making ~2% less money. This will eventually turn into a ~2% price increase to maintain their profit margins. If you pay with a credit card you will get most of this back in rewards, but if you aren’t using a credit card this is just extra cost that you lose.
This is quite different in the EU where there are strict fee limits for credit card transactions so the cost of accepting credit cards is similar to the cost to handle cash. You will also notice that there are basically no credit card rewards in the EU because of this. Canada does have some regulation so isn’t quite as bad as the US is, but in general processing credit cards is more expensive than accepting cash for businesses.
So basically credit card fees cost businesses money, so they raise prices to compensate. If you pay with card you can get rewards to get most of this price increase back. However for those who don’t use cards they just lose this money. It is basically a zero-sum game but you lose if you don’t play. (Especially those who are less wealthy so don’t have good enough credit rating to get a high-rewards credit card.)
This is of course a bit of a simplified view of the situation, not all credit card rewards are directly funded by merchant fees. However at the end of the day the cost of processing cards tends to be higher than the cost of handling cash, so the businesses will have to raise prices to account for that.
I think it would be great if businesses directly passed the cost of accepting cards to customers. That way the customer can decide if the extra cost is worth it for the convenience and rewards. Customers who prefer not to use cards then don’t get an increased price for no benefit.
I see, that makes sense.
I don’t really think it’s reasonable to expect businesses will do anything to benefit customers though. Right now they have those costs accounted for in pricing, as you’ve stated. If they are allowed to charge fees for credit card use, they will keep their prices the same and simply add a further cost to the customers using cards. They’re not going to lower prices.
I believe your situation will simply result in higher costs for everyone while the business profits more than ever.
Yes, that is also true. Prices are not directly related to cost, but to consumer’s willingness to pay. However in the long term there is a pressure to provide low prices and lowering cost will allow that.
I think they won the court battle and then lost the battle against the customer.
This is the best summary I could come up with:
Discount carrier Flair Airlines has raised some other fees, and added a surcharge when customers pay for their flight with a credit card.
The increase comes on the heels of a $10 hike WestJet introduced four months ago for passengers who choose to check their bag with an agent at the airport.
WestJet spokesperson Julia Brunet told CBC News in an email that baggage fees allow the airline to “keep base fares lower for all travellers.”
Alaska Airlines said in an email it needed to adjust its fees to “navigate rising operating costs – including high fuel prices.”
In an email to CBC News, Air Canada spokesperson Peter Fitzpatrick would only say the airline is “aware of these trends” and has made no recent changes to its baggage policies.
Through an internet archive search, CBC News discovered that sometime after June 8, the airline increased the charge to book or change a flight over the phone from $15 to $25.
The original article contains 765 words, the summary contains 146 words. Saved 81%. I’m a bot and I’m open source!
The fact that Air Canada and Air Transit both charge extra for baggage for international flights now irks me to no end. Should leave this kind of BS to discount flight companies.
Air Canada does only if you pick the most rock bottom fare.
Yes but when you’re searching online they advertise pricing with the rock bottom fare. IMO shouldn’t exist at all
Allegiant airlines tried to charge me $5 to print out my boarding pass. In order to not pay it I had to stand at the counter using their shitty website to check into the flight so I could get my boarding pass on my phone before I could check my bag.
These are the same airlines that now have multiple announcements per flight begging people to please check their bags because there’s no room left in the cabin. These idiots keep firing into their own feet and wondering why it hurts.