Quick Answer
If you sell beverages in Canada, most provinces and territories legally require you to collect container deposit fees. Instead of bundling them into the product price, use an app like Magical Product Fees to automatically separate and apply them at checkout. This ensures fee transparency and prevents overcharging taxes.
Detailed Answer
In Canada, if you sell beverages, you must charge container deposit fees based on your province’s regulations. These fees encourage recycling and are legally required for compliance. While many breweries and beverage retailers build the deposit into the product price, this approach can lead to overcharging tax and create accounting complexities.
The best practice is to list deposit fees separately as a line item at checkout. This ensures transparency for customers, simplifies tax reporting, and prevents merchants from unintentionally remitting more tax than necessary. The Canada Revenue Agency (CRA) recommends treating container deposits as non-taxable, so embedding them into the total price and charging tax on the full amount can create compliance risks.
Shopify doesn’t have built-in features to charge container fees separately, however using an app like Magical Product Fees automates this process by accurately applying the correct deposit fee per item at checkout and displaying it as a separate charge. For Shopify Plus users, the app even supports location-based pricing, ensuring customers are charged the correct deposit for their province without manual adjustments.
By using Magical Product Fees, merchants can:
- Ensure compliance with Canadian container deposit laws
- Prevent overcharging tax by separating deposit fees from product prices
- Automate fee calculations and eliminate manual updates
- Provide a transparent checkout experience that builds customer trust
Charging container deposits the right way keeps your store compliant, avoids unnecessary tax remittance, and simplifies reporting, all while making the checkout experience clearer for customers.
Video Explainer
Understanding container deposit fees and how to charge them on Shopify can feel overwhelming. I made a short video that explains the quick and easy way to add Canadian container fees to your store.
Supporting Answers
What Are Container Deposit Fees?
Container deposit fees are extra charges applied to beverage containers (such as bottles, cans, or Tetra Paks) to encourage recycling. Customers pay a small deposit upfront, which they can often redeem by returning the container to a designated recycling location.
Each Canadian province sets its own rules and fee amounts for beverage containers. For example, Alberta’s deposit fees differ from those in British Columbia or Ontario. It’s important to stay informed of your province’s specific regulations to ensure compliance.
Do I Have to Charge Container Deposit Fees?
Yes. If you sell beverages in Canada, you are legally required to charge container deposit fees. While the exact rules differ by province, failing to collect and remit these fees can result in fines or penalties. Using an automated tool like Magical Product Fees ensures you never miss a required charge.
Do I Charge Taxes on These Fees?
In Canada, container deposits are not subject to GST/HST when they are charged at the time of sale. The reason is that the deposit is considered a separate refundable amount, not part of the taxable purchase price.
For example, when you buy wine or spirits from the LCBO (Ontario’s Liquor Store), the receipt shows bottle deposit fees as a separate charge, and tax is not applied to those fees.
The Canada Revenue Agency (CRA) recommends treating container deposits as non-taxable amounts. If you embed deposit fees into the total product price and apply tax to the full amount, you’re overcharging tax and remitting more to the government than necessary.
While over-remitting tax may seem harmless, it can lead to compliance issues, audits, or correction requests from the CRA. Merchants may need to adjust past filings, which can create unnecessary administrative burdens and potential financial costs.
To simplify tax reporting and prevent errors, always list deposit fees separately as a non-taxable line item at checkout.
How Should I Display These Fees to Customers?
Transparency is key. Clearly listing container deposit fees as a separate line item during checkout ensures customers understand what they’re paying for and prevents confusion.
With Magical Product Fees, you can automatically apply and display deposit fees alongside product prices and taxes, ensuring an accurate, itemized breakdown that builds trust with customers.
How Do I Handle Multi-Provincial Sales and Location-Based Fees?
If you sell across multiple provinces, you must charge the correct deposit fee based on the customer’s location.
For Shopify Plus users, Magical Product Fees supports location-based fee settings, allowing you to automatically apply the correct provincial deposit rates at checkout. This ensures compliance across different regions without manual adjustments.
For non-Shopify Plus users, provincial deposit rates must be handled manually or applied as a universal fee.
Real-Life Experience
“I’ve seen firsthand how deposit programs encourage repeat sales. For example, when I buy Muskoka Brewery beer in Ontario, I pay a small deposit upfront. Returning the cans to The Beer Store not only gets me my deposit back, but I usually apply it toward my next purchase, giving me an extra reason to return.”
-Kyle Godon, Shopify App Expert
Key Takeaway
To simplify compliance with Canada’s container deposit regulations, Magical Product Fees is the most reliable and user-friendly solution. It saves you time, avoids costly mistakes, and keeps your store aligned with provincial laws.
Try Magical Product Fees today to simplify compliance and confidently charge container deposit fees on your Shopify store!
Magical Product Fees
The Magical Product Fees app is a fast and easy way to build, customize, and attach fees to products or entire orders.