KITCHENER -- Paying with plastic has become the preferred method of payment during the pandemic.

But many small businesses are hoping their customers choose debit – or even cash – over credits cards when it comes time to check out.

At Lady Glaze Doughnuts in Kitchener’s Belmont Village, there’s a sign in the window that says debit and cash are the preferred methods of payment.

The problem is the high fees that come with credit card transactions.

“We have to make every cent count, especially in a pandemic,” says store co-founder Mark Brown.

More small businesses, especially those with lower price points, are trying to move away from credit cards.

“Paying upwards of 2% per transaction just eats away at the bottom line,” says Brown. “If you look at the average profit margins for restaurants in Canada, you’re making between 4% and 5% on average. So 2% is a huge amount to give away.”

Brown says it’s especially challenging when he has the added costs of extra cleaning and safety supplies.

After looking at his budget, Brown made a tough call.

“It was credit card fees,” he says.

The doughnut store will still accept credit card transactions, though they do prefer other methods.

Paying with plastic has become more popular during the pandemic because it means fewer touch points for germs, and more spending points for consumers.

The Canadian Federation of Independent Business says most credit card points, or cash back programs, are actually funded by the fees they collect from stores like Lady Glaze Doughnuts.

“The vast majority of the billions and billions of dollars in revenue is as a result of credit card processing fees,” says Dan Kelly, the president of the Canadian Federation of Independent Business. “For some merchants, that really is killer.”

He adds that Interact fees are significantly lower than credit card fees, giving small businesses more bang for their buck.

“It’s definitely helped us save money in the long run,” says Brown. “We’ve also been able to look towards another location.”

A second Lady Glaze Doughnuts store is expected to open this weekend in Guelph.