A cash discount program can be useful if you’re aiming to accept credit card payments, but you want to avoid the fees associated with the effort. Cash discount merchant services can provide this by passing the cost of acceptance or processing fees on to the customers. The customers will pay extra for something to cover the cost you’d normally spend on processing fees.
You could spend about 3 to 5 percent in fees for each credit card transaction you complete. Cash discount merchant services will add that percentage to the customer’s transaction, meaning the customer will pay that extra to offset the charge for accessing and maintaining a credit card network.
How Does This Work?
A cash discount merchant works with a general standard for how you’ll charge your customers. You can encourage people to pay for their items with cash. They will save on their cash purchases because they won’t be subject to a surcharge through a credit card transaction.
For example, a customer might receive a 4 percent surcharge on one’s order when using a credit card. A $30 purchase would become $31.20. The customer pays the extra $1.20 for the privilege of using a credit card. The $1.20 will offset whatever processing charges and interchange fees you’d spend on a card transaction. But if the customer chose to pay with cash, that person would pay $30 for the order.
Will the Customer Appreciate This?
You will let the customer know before completing a transaction about the cash discount offer. The customer won’t be surprised when getting a bill that it costs extra to utilize a card.
The process works best if your business focuses on small-value transactions. A cash discount would be welcome for cases where you handle $50 or less in most transactions. But for high-ticket sales, this effort could be excessive.
Is This a Legal Solution?
Cash discount merchant services are legal, as you can partner with a service provider to produce a promotion where someone can spend less money on straightforward cash orders. The cash discount effort is different from a credit card fee, which is illegal in some states.
How Is This Different From a Surcharge?
Cash discount merchant services don’t entail surprise charges. With a cash discount program, you are letting your customers know beforehand that they can get a good deal on something of value.
Customers will be more likely to accept a discount deal than a surcharge. The point is especially true for businesses that accept tips. Customers might not be willing to provide tips if they notice there are surcharges added to their transactions. Therefore, you would have to offer something friendlier like a cash discount to make this point more marketable or easier for people to support.
You can benefit from providing cash discount merchant services for your transaction needs. The system is direct and lets customers know what they are getting out of their orders. You’ll also ensure you can cover the costs for accepting card payments.