How does Cash Discounting work?
A. This program is a way for merchants to offset most of the cost of credit card processing. Merchants implement a service fee that applies to all products, and then give a discount to customer who choose to pay with cash. Customers who pay with cash will avoid the additonal fees and all others will see an adjusted line item in their receipt.
Q. How are merchants made aware of the Cash Discount Pricing?
A. Your business will be provided with signage that informs the consumer that "All posted and advertised prices are already at the Cash Discounted Price." Consumers paying with cash obtain that posted discount rate. For transactions where consumers choose to pay with cards, the diference between the cash and the credit price is used is "The Non-Cash Price" Post the signage in your store at the check-out line, entrance, each revenue center within each property/location.
Q. I've never heard of this before, is it new?
No, businesses have been offering discounts for those who pay with cash for years. In the United states, a lower posted price for cash is very common at gas and service stations across the country
Q. Is Cash Discounting Legal
A. Yes, cash discounting is legal in all 50 states. The Dodd-Frank act prohibits payment card networks "from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards."
Q. Is this like a surcharge?
A: No, offering a discount to customers who choose to pay with cash is a completely different situation than surcharging when it comes to the card brands' regulations. While surcharging is allowed under certain parameters laid out by the card associations, business owners are able to price their rpoducts and offer discounts on those products at will. Cash discounting is the business owner exercising that freedom. Surcharging is adding a charge only for ucstomers who use a credit card, and is not currently allowed in ten states.
Q. Will my customers be upset with this fees and go elsewhere? Won't I lose business?
A. Not according to other business owners' experiences. As cash use declines, the hassle of going to an ATM andpaying those fees (sometimes norht of 5%) is not worth paying a little extra to use a card. 4% (or a small flat fee) has sa small impact to the consumer, but a very significant impact on your cost of doing business. If you explain the cash discount program is a way for you to keep providing quality goods and services without increasing all of your prices, consumers have shown they are willing to keep shopping with you.
Q. How do I decide between a flat, per transaction fee and a percentage?
A. We set our merchants based upon their average ticket size. For those businesses with an average ticket below $15, we recommend a flat dollar amount, per transaction fee. For those with a larger than $15 average ticket, 3.99% works best. This process ensures that as much of your processing costs as possible are covered.
Q. Will this program completely eliminate my monthly processing bill?
A. Almost. Some merchants will still see some small fees on their bills due to the variation in Interchange Prices,but most will see a drastic (95-100%) reduction in their processing bill. We will set up your bill on a daily discount structure, meaning we will take your fees out every day instead of a lump sum at the end of the month. Your monthly statement will show a near-zero cost of processing with the money for the goods and services you sold showing up in your dpeosit.