How a Cash Discount Program Can Eliminate Your Credit Card Processing Fees
- July 15, 2021
- / Jamie Walker
- / MERCHANT SERVICES,CASH DISCOUNT
Credit card processing fees are probably the number one expense that business owners love to hate. As a business owner myself, I understand that processing fees create a lot of heartburn because every dollar that can go to the bottom line makes a difference. That is why we offer best-in-class payment solutions such as Clover Point of Sale, 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. Next, post signs throughout 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.
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 an 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. Does your point of sale system support a cash discount program? When evaluating a new POS you need to make sure that it is designed to accept all forms of payment and that your provider has the software to automate the cash discount to ensure that you remain compliant.
2. Does your competition offer a cash discount? If so, you could potentially lose business to your competitors if they offer a discount program that incentivizes 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, one thing you should keep in mind is that people tend to spend more money when they make a purchase using a credit card.
4. Do you want to save money and increase your margins? A cash discount program is a great way to increase your bottom line by helping to reduce or eliminate credit card processing fees.
Get in touch with DigiPro Payments 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.