Charging Customers Merchant Fees

This past weekend I was in a small town in Alberta, enjoying the gorgeous mountain scenery, nice weather and great little independant shops. Most of the time I really enjoy these stores because they are smaller, a bit less busy and quite friendly. However, it's these smaller stores that I always get very irked when it comes time to purchase something. Why? Because when I go to use my debit card some of these stores charge me 20 cents or more to use it.

Now, I understand the reason behind this, I'm not insensitive to the reason it is charged. Somewhere along the line the merchant is being charged by their provider that amount for each debit transaction. In a store with lower ticket transactions, such as $2 and $3 I can see that (even though I don't like it), but I can understand. Afterall, 20 cents on a $2 transaction is 10% which affects the bottom line no doubt.

But how about my $50 transaction? That 20 cents represents .004% of the transaction. Hardly fair and it leaves a very bad impression on me, the customer. This store went even further as to have an independant cash machine on hand that charged $1.50 to withdraw cash!

But in today's age of internet banking and my iPhone, this is what I did. I put the $50 on my Visa card because I refused to pay this 20 cents (on principal). In essence because I felt the merchant was making me pay for his cost of doing business in the form of a fee, if his Visa rate was 3% that transaction cost him $1.50. It cost me nothing because with my banking app on my iPhone I simply paid it online on the spot and didn't have to pay any fees.

I've noticed that there are some pubs and restaurants that don't take debit but have a cash machine on property that charges sometimes $4 to withdraw cash, and that's on top of the $1.50 the bank charges you! These businesses, in order to save on debit transaction fees and making it inconvenient for the customer are driving them towards using their credit cards, thus costing the business in the long run.

Have you come accross this practice anywhere? Do you think this is fair? Please let me know your thoughts on this, and if you're a business doing this, please enlighten me or change my thinking.