Cash Discount
A cash discount program allows business owners to offer a price deduction on goods or services to motivate customers to pay with cash. However, if they choose to pay by credit card, the business can pass along the cost of acceptance to the customers. The customer is then given a choice to pay with cash and save or incur the cost of acceptance themselves.
In other words, it is a method of implementing a service fee to all customers, while giving a discount to those who pay with cash. Our proprietary technology automatically adjusts the pricing and keeps you within the guidelines of Visa, MC, and processor regulations.
What is a Cash Discount program?
A cash discount program passes the cost of acceptance, in most cases 4%, back to customers who choose to pay with a credit or debit card. For those who decide to pay by cash, it provides a DISCOUNT of that same 4% on the transaction. Customers who choose to pay with a card will pay the marked amount because the processing cost is built into the cost of the item. This allows the business owner to recoup the full amount of the transaction and not incur any credit card processing fees.
For example, a transaction that normally costs $50.00 will now be automatically updated to include a service fee of 4%, or $2.00. If a merchant decides to pay with a credit card, they will pay $52.00 ($50.00 + the service fee of $2.00). If they decide to pay by cash, they will receive an instant “cash discount” of 4%, bringing the transaction back to the original $50.00.
What is a Surcharge program?
A surcharge program is similar to a cash discount program in the sense that it will offset the majority of a merchant’s credit card processing fees, but instead of offering a discount is paying by cash, it ADDS an additional fee, or surcharge, at the time of sale if a customer is paying by credit card. When a merchant is set up on a surcharge program, it is also important to know that they must be registered with Visa/MC to offer the program, and surcharge fees cannot be added on debit card transactions.