Credit card surcharges at Canadian restaurants: what you must be told and what you can refuse

You may have seen a sign at a Canadian restaurant that says there is a fee for paying by credit card, or a line on your receipt for a card surcharge. It is legal in most of the country, but it comes with rules. Here are the rules in plain terms, and the questions worth asking at the till. The card networks change their rules from time to time, so check the current position before relying on a figure.

Can a Canadian restaurant charge extra for credit cards?

Mostly yes. Until 2022, the card networks' own rules stopped most merchants from adding a fee to credit card payments. In October 2022, Visa and Mastercard changed their rules in Canada to allow merchants to pass on the cost of accepting credit cards, with conditions. Ontario law did not prevent surcharging in the first place. In practice, restaurants outside Quebec can surcharge on credit cards if they follow the rules.

What are the rules?

The conditions include:

• the surcharge must be disclosed before the customer pays, both at the entrance or the till and on the receipt
• the fee must be itemized separately on the receipt
• the surcharge must not be higher than the merchant's actual cost of accepting the card
• there is a maximum percentage, 2.4 percent of the purchase
• the merchant must give written notice, 30 days ahead, before starting to surcharge

The card networks can revise these rules, so treat the percentage as something to check at the time you pay.

Does it apply to debit cards?

No. The surcharge rules cover credit cards. Interac debit and the debit versions of Visa and Mastercard are not subject to the surcharge, so a restaurant should not add a fee if you pay with debit. If a restaurant does, ask why.

Why is Quebec different?

Quebec's Consumer Protection Act is read as prohibiting a surcharge on a card payment, so businesses there have been excluded from the new rules. A Quebec restaurant should not add a card fee. Check with Quebec's consumer protection office if you are unsure.

How can you avoid the fee?

• Pay by debit. It is free of the surcharge.
• Pay with cash.
• Ask before you order whether there is a card fee.
• Use a card that gives rewards worth more than the fee, but only if the fee is small.

What if you are not told?

If a surcharge is not disclosed before you pay and shown on the receipt, you can ask the restaurant to take it off. If it will not, you can raise it with your card issuer, who can tell you how to dispute it. Keep the receipt and a photo of the sign, or the lack of one.

Is a surcharge the same as a tip?

No. A surcharge is for the restaurant, and a tip is for the staff. A tip should not be calculated on a surcharge. Some terminals add a surcharge and a tip option together, so look at each line.

Why do restaurants do it?

Card fees are a real cost. A restaurant with thin margins pays a percentage on each credit card transaction, which can reach a few percent, plus other fees. Some owners put it in the menu price and others add a line. Neither is better for the diner, but showing it clearly is fairer than hiding it.

What is the difference between a surcharge and a discount for cash?

A cash discount lowers the price for people paying with cash, and is a different mechanism with different rules. Some restaurants advertise a cash price. It can be a way to avoid a surcharge sign. Make sure you know the price you will pay before you order.

What happens to the money the restaurant collects?

Card fees are paid to the restaurant's payment processor and to the card networks. A restaurant that pays a processor a flat rate or a percentage on every sale sees that cost grow whenever customers use premium rewards cards, which cost more to accept. That explains why a business might add a surcharge, or ask you to use debit. It does not change your right to be told clearly, in advance, what you will be charged, nor your right to choose another way to pay. A restaurant that is open about its reasons usually handles the conversation well.

A short checklist

1. Look for a sign near the door or till.
2. Ask if you pay by credit card.
3. Offer debit if you prefer.
4. Read the receipt for the surcharge line.
5. Raise it with the manager if it was not disclosed.

How do you keep track of places that are upfront about fees?

A card fee that is shown at the door is easier to live with than one found on the receipt. After you eat, rate the dish in the Mosey app and note whether the place told you about any card fee before you ordered. A list called Upfront about fees keeps those places together, and you can share it with a friend through an invite link.

You can also use the app to put the meal first. Rate by the dish, add a tag like Quick Service or Great Value, and follow friends so you see where they ate and what they liked. The Find sheet then helps you plan the next meal around the tags you trust.

More guides to read next:

• Restaurant gift cards in Ontario and BC: expiry dates, fees and what to check before you buy
• Nanaimo, BC food guide: Nanaimo bars, the harbour and where to eat
• Canadian restaurant words explained: licensed, patio, double-double and what the menu means

More in the Canadian food guides and the ranked lists of places.

Next time you pay by card, open the Mosey app and rate the dish you just ate.