0% Processing Fees.

What is a cash discount program? 

Some background info: In most cases, when a customer pays by credit card, you — the merchant — are responsible for a credit card processing fee. One way small businesses can offset this fee is by offering a cash discount. This incentivizes customers to pay with cash instead of a card by giving them a percentage off the published price of their purchase. But before you go advertising this to customers, you first need to increase your prices by a few percentage points. By raising the price of each item, the customer discount won’t affect your margins, and you won’t pay any extra fees on the transaction. Even better, if your customers still pay by card, the price adjustments you’ve made help to offset the processing fees.  

It’s a win-win.  

 Cash Discount Customers are offered a percentage off of the published price when they pay with cash instead of a card.  Not prohibited in any state, though restrictions vary by province  Requires no additional legal consultation   Signage detailing cash discounting practices in your establishment is required  

How does a cash discount program work?

 Let’s imagine someone ordering a burger at a location that offers cash discounting. This will give you a better idea of why your customers might be more inclined to ditch card payments, while also giving you a look at how the process works on your end.  Unlike with a surcharge program, card-paying customers don’t feel an increase, but you still get the extra revenue to offset costs.  

Why should I offer a cash discount?  

Reward customers for using cash over card payments 

Optimize your pricing by a few percentage points  

Use your increased revenue to offset credit card processing fees  

But it’s not just about a better bottom line and tackling processing costs. There are some other major benefits to consider. Take Benji’s family-run Italian restaurant for example. This staple business has been functioning well for decades, with plenty of loyal customers returning weekly for the dinner service. However, credit card processing fees take a toll when customers order just appetizers and drinks. Because most credit card processing companies charge a percentage plus a flat fee per transaction, a higher volume of smaller credit card transactions means Benji has to cover even more fees. With inflation and the rising cost of living, he feels like he’s unable to pay his staff fairly.  By offering a cash discounting program, Benji is able to offer his customers extra incentive for paying in cash over card — which many of the loyal customers are thrilled by — and offset costs even when transactions are still paid by credit card. Not only does the family business have better revenue opportunities, it also has the ability to establish more customer loyalty and take some of the burden off its staff’s shoulders. 

What to look for in a cash discount program?

 If you decide to upgrade your POS system to one that offers cash discounting, there are some other factors to consider. At a minimum, the right cash discount program should allow you to:  Reduce fees More cash transactions mean fewer additional costs for you. Plus, you can use revenue from transactions still paid by credit card to cover your point-of-sale costs.  

Choose a POS system that lets you offer customers multiple payment options and makes it easy to do bulk menu and pricing updates.  

Improve cash flow 

Cash payments allow you to get paid faster and reduce chargebacks and fraud.  

Increase customer satisfaction 

Cash customers respond positively to seeing the discount line item on the payment screen and on customer receipts at checkout.  

Let customers know the cash discount is available to them before they pay at checkout  

Apply the discount to the entire invoice and show it as a line item on the customer’s receipt   

It’s a lot to think about — that’s why having an expert payment processor in your corner will come in handy. With Majestic Merchant Services at your side, you get everything you need to succeed in one place. We can help you spread the word and ensure customers can see signage explaining how the cash discount works. You can even download the instructions for the proper signage and get started in a snap. We’ll also help you make the offering as clear as possible at checkout with a POS that makes the discount line visible during the payment process via customer-facing displays and on all receipts.  Ready to take the next step with us? Learn more and get started today.