Dhamecha has slashed its planned card payment charges following protests at its cash and carries and boycotts by shop owners.

The change was revealed in messages sent to stores by the wholesaler, and seen by Better Retailing on 19 June, showing its ‘final’ business card ‘handling fees’ which will go live from 30 June.

Charges on business debit cards, previously planned to be 0.2% for Visa and 0.7% for Mastercard, will now be 0.2% across the board, with a £2.50 charge cap applied to both.

The message from Dhamecha added stores can avoid all charges by paying for goods with cash, personal cards, bank transfer or payment in Dhamecha’s mobile app.

For business credit cards, the planned 1.25% charge has been cut to 0.75% and a new £25 maximum charge cap has been introduced.

UPDATE: Dhamecha ‘reviewing’ fees after shop owner protest at Hayes depot

The reductions follow protests at Dhamecha’s Hayes and Lewisham London depots on 13 and 17 June respectively. Messages circulating among shop owners show attempts had been made to organise another protest on 22 June at its Croydon branch. These demonstrations involved picketing of the branch entrances, abandoning trolleys of goods in aisle and speeches made by shop owners.

While Dhamecha, other wholesalers and some retailers defended the charges as being necessary to keep prices low due to high card processing fees, many shop owners said they were unfair, especially as retailers cannot legally charge their customers for card payments.

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Card fee cuts at Dhamecha may lead to price rises

One independent retailer told Better Retailing that while Dhamecha had bowed to pressure, the change would simply result in higher prices elsewhere.

They said: “If they (retailers) wanted the cheapest prices they would have used alternative methods rather than just a card payment, what’s wrong with bank transfers and direct debits? These cash and carries work on very small margins, so to pass on good prices they have to save money.

“You either pay the prices through the cost of products or you pay them upfront with things like card charges. I know Dhamecha has reversed the card charges, but they’re just going to have to pass it on through the cost of goods.”

The retailer added that they thought the protests were “pathetic”, and also pointed to other wholesalers who pass charges on to retailers, as well as retailers themselves who impose transaction charges on customers.

“Nisa has surcharges,” they added. “They have distribution charges, but people get on with it. They recover it through the cost of goods to the consumer.

“These same retailers — if you go into 90% of their shops, they’ll be charging the customer 50p, or they’ll have low transaction charges in their own stores as well.”