Goldhawk Fights Back: Business… It’s a Jungle Out There

This is a weekly column by Dale Goldhawk, Canada’s best-known consumer advocate. A journalist, author and broadcaster, Dale hosts Goldhawk Fights Back For You, on AM 740 or at AM740 ZoomerRadio, Monday through Friday from 11 am to 1 pm, in the eastern time zone. Visit his website at

Most of the time, I write about frauds perpetrated against individual Canadians by conmen — or is it conpersons? But consider the dirty tricks played in the business world by one business against another. While most of these smelly games fall short of being illegal, they certainly aren’t very ethical. Why should we care? We should care about dirty tricks in the business world because you can be sure the victimized businesses pass every penny of their losses onto us, the individual Canadian consumer.

The ubiquitous credit card is the visible front end of a system that has spawned a lot of dog-eat-dog odiferous trickery. It has become commonplace for financial institutions that issue credit cards to issue so-called premium cards for specific sub-sets of consumers. The issuer promotes the card and actually creates a market for it among, say, business travelers. The consumer likely pays extra for his or her premium card but that a personal choice. The problem is that retailers pay higher percentages to the card issuer when the retailer accepts the card in payment for a consumer purchase. This drives retailers mad because they have no say in the card the customer uses.

Yes, I know the merchant can refuse to accept a particular card like Amex or even a premium card but that is a sure way for that merchant to lose a ton of business.

The Retail Council of Canada has complained these premium cards are flooding the market because issuers can get that extra percentage from merchants. Of course, the issuers then argue the extra fee is justified because the premium card costs more to process. I won’t go into the bizarre logic of this debate but I will say about half of all credit card transactions now involve these premium cards.

I also note that civilized countries like Australia limit the amount of merchant fees card issuers can charge. Canada does not.

What does this mean to us? Well the Bank of Canada, last year,studied the cost of purchases. Using the example of a transaction worth $36.50, the Bank discovered it cost the merchant 19 cents to process a debit card payment, 25 cents to process a cash transaction (believe it or not) and 82 cents to process a credit card transaction.

Do you think the retailer absorbs this cost or passes it on to the consumer in the price of goods?


Many goods and services we buy are sold to us, not by the manufacturer or service provider, but by a middle-person who receives a commission from the total sale. This creates a huge arena for Business to Business bad business.

In travel, as only one of many examples, travel agents earn commissions for selling travel products like tours or cruises. Increasingly, tour and cruise suppliers have been refusing to pay commissions on things like landing or port fees, air travellers’ security charges imposed by government, fuel surcharges which often are completely invented by airlines, and so on. As commissions are reduced by the large providers — simply because they can — agencies are forced to charge higher service fees to consumers.

Some businesses keep increasing the time limits for paying their suppliers, from 30 days to 90 days to 120 days to years in some cases. Other businesses corner the market on supplies needed by customers — like certain metals — and raise prices to ridiculous amounts when they can monopolize supply.

Sure, there are laws and rules and regulations and codes and other things that are supposed to stop such practices. Not all are in place in Canada and certainly few are rigidly enforced. Behind the scenes of business, it is often a jungle. But the consumer is the one who pays in the end for the dirty tricks that go on in that jungle — whether we know it or not.

Photo © Fah Mun Kwan

Dale GoldhawkGemini award nominee, journalist and broadcaster, Dale Goldhawk has earned Canada’s trust by his four decades of work exposing fraud and greed in the marketplace. To read more of his articles, go to (now part of the ZoomerMedia family of websites).

Don’t miss Goldhawk Fights Back , on the New AM740 Monday to Friday from 10 a.m. until 1 p.m.