The Canadian Consumer Rewards Coalition

The Canadian Consumer Rewards Coalition (CCRC) is a not-for-profit organization created to advocate for Canadian consumers – to protect and defend the consumer points and rewards they have rightfully earned and to ensure their ability to earn and enjoy future loyalty rewards.  

Millions of Canadian consumers rely heavily on their reward points to help buy what they want and need, collecting reward points to redeem for gas, groceries, flights, and hotels. About 75% of consumers collect and use reward points each year, with the average family earning more than $500 in points each year.   

However, frequent changes to government policy and other programs threaten the future of consumer rewards programs. CCRC’s ongoing advocacy efforts continue to inform and influence elected officials, regulators, and other decision-makers, ensuring consumers’ issues and concerns about reward programs are front and centre.

On several previous occasions, the CCRC, with support from tens of thousands of concerned Canadians from across the country, have stood up to defend loyalty reward points, successfully stopping the government from arbitrarily lowering transaction fees to allow consumers to continue to earn and enjoy the benefits of their credit card points.  

What’s the problem?

The once-in-a-lifetime pandemic, followed by a rapid increase in inflation, has left many consumers even more unsure about their financial and economic situation. In uncertain times like these, consumers need all the help they can get to make ends meet. 

Canadians get real value and tangible benefits from the rewards they receive in return for using their credit cards. Reward points help make many things people need and want more affordable, whether it is helping to pay for essentials like groceries and gas or fun activities like making travelling more affordable. 

However, just when you need your reward points more than ever, they could disappear entirely or be significantly scaled back. Retailers have pushed the Canadian government to repeatedly cut credit card transaction fees for years to increase profits. While they promise these reductions would result in cost savings for consumers, it is more likely that businesses will pocket the additional profits, leaving you with no cost savings or reward points.  


What are interchange fees?

Banks and other retailers offer loyalty points, rewards, and cashback programs to encourage you to choose and use their credit cards over the competition. Retailers pay interchange fees, also known as transaction fees or swipe fees, to accept and receive secure payments via credit card. These fees also help fund in part loyalty programs enabling consumers to collect and enjoy reward points, cash-back programs, and other discounts.  

The average fee of the two major credit card providers is already under 1.5%. Under a recent new agreement with the federal government, fees for small businesses are set to be cut yet again to under 1%.  Despite these significant fee reductions, retailers continue to pressure the government for additional reductions to increase profits.    

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How would lower fees affect you?

Businesses promise that the significant cost savings from reduced fees will be passed down to consumers at checkout. But in reality, while business profits rise after fees are cut, prices either remain the same or often continue to increase.  

In addition, consumer reward points are usually among the first benefits to disappear entirely or are significantly reduced, as points accrue more slowly with less value.  

This is not speculation. This has already occurred in other countries and could easily happen here in Canada.  

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Would lower fees benefit consumers?

No. In fact, the evidence points to the contrary. The retail lobby claims that lower fees will result in savings for businesses, some of which will be passed down to consumers through lower prices. We know from examples in other jurisdictions that this will likely not happen. When Australia cut credit card transaction fees, the Royal Bank of Australia hoped to see more savings passed on to consumers. However, a Macdonald-Laurier Institute study found that in the years since credit card fees were cut there were no measurable savings for consumers. On the contrary, banks increased the annual fees people paid for credit cards to offset losses resulting from lower transaction fees. There is no reason to think that a further cut of credit card fees in Canada would result in anything different. It will be a win for big box retailers, and a loss for everyone else.

What’s the solution?

The best way to solve this problem, once and for all, is for Canadian consumers to continue to stand up, fight back as a united front to defend their points and rewards, and ensure that Canadian consumers’ collective voice is clearly heard in Ottawa.  

The more of us there are, the harder we’ll be to ignore. By signing up as a CCRC supporter, you can add your voice to tens of thousands of other Canadians nationwide and help us to continue leading the fight to defend and protect your points and rewards. 

Please join the campaign, share it with your relatives, friends, and colleagues, and then follow the CCRC on our social media networks for important updates.   

How do credit card payment networks work? 

The world’s largest credit card companies involve four different parties in every credit card transaction:  

The consumer makes their payment.

The consumer’s bank, which holds their funds and issues their credit card.  

The retailer receives payments fom the consumer.

The retailer’s bank holds the retailer’s funds and accounts and processes payments through various Point-of-Sale systems.  

Once you swipe your card, the payment goes through a series of fraud checks and authorisations within the credit card networks before your money is deposited in the retailer’s account, minus the interchange fee that funds and enables the checks and other features offered by the networks. 

Additional reading

What is the current interchange fee landscape?

In November 2014, Visa and Mastercard agreed to voluntarily freeze interchange fees at 1.5% for five years in Canada. The move came as the retail lobby complained of rising costs and pressured the federal government to intervene. Nearly ten years later, the situation has remained the same. The retail lobby has kept pushing for lower fees, complaining that costs are still rising and that the pandemic and inflation have made things worse. 

As a result, credit card companies again agreed to lower interchange fees further. Under the new agreement announced in May 2023, in-store credit card transactions will be reduced to an average of 0.95%. That represents a reduction of more than 30%. 

However, despite the new agreement, the retail lobby started complaining again, asking for broader and even more significant cuts. It is clear they will not stop putting pressure on the government. If these cuts continue to happen, they could lead to disappearing reward points and programs for Canadians nationwide. 

Would lower fees help small businesses?

Lower fees will only help big businesses. Large retailers would save billions of dollars, and increased profits would be passed onto shareholders, not small businesses or consumers.  

As the payment networks incur revenue losses due to lower fees, small businesses and mom-and-pop stores will no longer negotiate discounted prices for using credit card networks, negatively impacting their bottom line.  

While big banks can absorb the costs of lower transaction fees, smaller community banks and credit unions would likely need help as their revenues diminish.

What else would lower fees impact?

Innovation. Transaction fees go toward funding a lot of convenience and safety features that have made card payments the preferred payment method in this country. But they also support further innovation, research, and new offers and products. If transaction fees are cut, banks will cut any non-essential part of their business related to those fees, which will mean fewer offers, less innovation, and a drop in the quality of service you get as a customer. 

Canadians have already added their names.

Millions of Canadians use reward-based credit cards to collect points they can exchange for cash back, gas, groceries, and flights.

The CCRC defends the interests of Canadian consumers – ensuring the rewards they’ve rightfully earned are protected, and preserving their ability to earn future rewards.