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Is the Cash Discount Program Right For Your Business?

By August 31, 2018

Chances are you’ve heard of the cash discount program, but do you know how it can help your business? If you’ve ever wished for a way to lower your monthly fees, if processing fees are cutting your profits to nothing, the cash discount program may be just the solution for you! Read on to learn more about whether the cash discount program is right for your business.


What is it?

The cash discount program is a convenient way to eliminate your processing fees by passing them on to your customers or offering them a discount if they pay with cash instead of a debit or credit card. This zero rate program means that you won’t have to worry about paying interchange fees—instead, your customers pay the fees for you.


How Does it Work?

A small fee (typically 4%) will be added to all customer transactions. Those customers who choose to pay cash will receive a discount by having the fee removed. The fee will show as “non-cash adjustment” on the customer’s receipt, and the fees are totaled and deducted from your deposits on a daily basis. Unlike interchange, the cash discount program allows you to see exactly where the fees are taken: from the customer, not your profits.


How Is this Different from a Surcharge?

This may sound similar to a credit card surcharge, but there are some important distinctions. Surcharges cannot be applied to debit transactions, but under the cash discount program, every transaction that is not paid in cash (or in-store gift card) will include the extra fee.


Is This Legal?

Credit card surcharges are currently prohibited in 11 states: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and Puerto Rico. Thanks to the Durbin amendment of the Dodd-Frank Law, passed in 2010, the cash discount program is completely legal in all 50 states.

You just have to follow a few simple rules: the charge must be visible on the customer’s receipt, and you must display signage in your store explaining the fee for the customer.


What Are the Advantages of the Cash Discount Program?

Here are just a few reasons to choose the cash discount program:

  • Save with every transaction! You’ll no longer have to pay a fee every time the customer swipes their credit card. This adds up to big savings by the end of each month. With fewer fees overall, you’ll enjoy higher profits.

  • It works with your business! Many gas stations already take advantage of the cash discount program and others can benefit greatly from it. It’s perfect for many businesses, especially those that process small-ticket transactions.

  • It’s flexible! You have the option of removing the fee for the customer if they are upset by the charge. You can also return to more traditional pricing at any time if you find your customers are unhappy with the system.


What Can Merchant Service Group LLC Do for You?

The cash discount program has been growing in popularity and Merchant Service Group has helped many businesses switch their accounts to this business-friendly system, including nail salons, restaurants, donut shops, coffee shops, minimarkets, retail stores, and more!

We provide support with every step of this transition, whether it’s helping you understand the program itself, setting up your equipment to use with the cash discount program, or providing signage to display in your store that explains the program to your customers.

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