Savings are sweeping the nation, as more merchants have found that implementing a Cash Discount program saves thousands of dollars in processing fees. Here’s a quick breakdown of how a Cash Discount program works and how to present a Cash Discount Program to your customers so you can eliminate your processing fees.

What a Cash Discount program allows you to do as a merchant is to offset most of your merchant services fees. It is a method of implementing a service fee to all customers, while providing a discount to those who pay with cash. Your posted prices will be your cash prices, while a small fee will be added to transactions where your customers opt to pay with a card. The Cash Discount must be clearly marked with posted signage at the register and you must verbally offer the discount before processing the transaction. You’ll also need to have compliant terminals to display the Base Amount of the transaction, the Cash Discount, and the Total Cost of the transaction on the customers’ receipt.

Without the legal proprietary technology programmed into your terminals, you would have to manually apply the service fee. If a fee is incorrectly applied to a transaction, where you overcharge the customer, the additional fee charged to customers would be labeled as a Surcharge which is prohibited in 10 states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas). If the fee is not a Cash Discount and is deemed as a Surcharge, even if allowed in your state, would still have strict requirements. As a merchant, you must register with Visa/MasterCard in order to legally apply the surcharge. The advantage of a Cash Discount program is that it has no necessary registration!

Although a common concern, many of our merchants have not encountered any push-back or problems when asking their customers if they would be comfortable with a Cash Discount program being implemented. Here are some common ways on how to present a Cash Discount program to your customers.

It’s cheaper than an ATM fee.

Let’s face it, ATM fees are usually anywhere from $2-3 and nobody likes the hassle of finding an ATM and going through all the prompts to withdraw cash, just so you can finally make a purchase. With a Cash Discount program, the low fee added to the transaction is significantly less than an ATM fee and allows your customers to have the convenience of paying with their favorite card.

There’s no minimum purchase required.

We’ve all been there, you go to a restaurant or convenience store and when you’re about to pay, there’s a sign that says “Minimum purchase required”. More often than not, that’s been an annoyance for customers everywhere and unless you’re in a state where surcharges are legal, it’s not even allowed by the card associations. With a Cash Discount program, there’s no minimum purchase required so there’s not that awkward conversation between you and your customers that they need to add some additional items to their total or they’ll face an additional fee.

It’s how you keep your base prices low.

With an ever-changing economy, the card associations will always get their cut in every transaction. Instead of just raising the prices of your goods and services, you are providing the option for your customers to pay the same price if they choose to complete their transaction with cash. The slight fee with a Cash Discount program allows you to merely cover your processing costs. Your customers will appreciate your honesty and understand that business is business.

Ultimately, it’s up to you to decide if a Cash Discount Program will work for your business. With thousands of satisfied business owners and answers to potential customer objections, it’s worthwhile to consider the amount you’ll be saving!