Stuck in the Middle: Consumers, Transaction Fees and Loyalty Programs


Denise Barrett


Consumers Council of Canada (CCC)




This study evaluated consumer attitudes towards the relationship between payment choices and loyalty programs. The impetus for this study was submissions from both sides of the Competition Tribunal case regarding alleged anti-competitive practices by credit card companies. All participants in that case argued that their position was in the best interest of consumers. The goal of this research was to ask consumers how they make payment decisions, how they value loyalty programs, and in focus groups, once the interrelationship was explained, whether any of the common alternatives considered by policymakers would likely change their payment and loyalty choices. The research also aimed to discuss where consumer interests lie in the public policy debate. Loyalty rewards evoked strong feelings among the consumers studied, who showed little faith that lower transaction fees charged to retailers would result in lower retail prices.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

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Consumers Council of Canada
201-1920 Yonge Street
Toronto, ON  M4S 3E2
(416) 483-2696

Source: Consumer Policy Research Database

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