There is not a business owner that I have ever met that does not look for ways to reduce their credit card processing costs. You never hear one say, “before we do this deal can you make sure I’m paying through the nose on my processing fees?” As a business owner myself, I understand that processing fees are the one expense that creates a lot of heartburn because every dollar that can go the bottom line makes a difference. That is why we offer best in class payment solutions that implement services like a Cash Discount program that can significantly reduce a business’s processing costs.
How does a Cash Discount program work?
To implement a Cash Discount program you will need to raise your posted regular prices anywhere between 1% to 4% to offset your processing costs. Post signage in your place of business letting patrons know that customers paying with cash will receive a discount off the posted prices. Not only must you post signage but you must also present customers with a clear receipt that details the service fee or Cash Discount amount. Point of sale technology such as Clover makes providing such receipts easy for business owners so that you can stay within the legal requirements of offering a Cash Discount program.
Is cash discounting legal?
Cash Discount programs started to gain traction in 2010 as part of the Durbin Amendment which states that businesses can offer a discount to customers as incentive or reward to encourage alternatives to payments made by a credit/debit card.
What factors do I need to consider before implementing a Cash Discount program?
1. Technology – it is important to ensure that your point of sale equipment is designed to accept all forms of payment and that your provider has the software to automate the Cash Discount so that you stay compliant.
2. Your competition – are your competitors offering a cash discount? If so, you could potentially be losing business to them since they are offering a discount program that incentives cash payments.
3. Do you want to accept more cash payments – Cash Discount programs lead to more cash purchases which will reduce or eliminate your processing costs. However, it is important to keep in mind that people tend to spend more when making purchases with their credit cards.
4. Do you want to save money and increase margins – cash discounting is a great way to increase your margins by helping to reduce or eliminate the credit card processing fee expense.
Get in touch with DigiPro Pay today if you are interested in learning more about reducing your processing costs by implementing a Cash Discount program. We can answer all of your questions and provide your business with the necessary tools to save money and increase your profit margins.