Discount for cash program refers to the credit card payment processing wherein the cost of accepting a card is returned to the customer who prefers to pay with a credit/debit card. The merchants who offer this service may continue to accept payments through cards but without losing the credit card processing fee. Does that sound too complex to decipher? Let me simplify if further. A cash discount program is when the merchants offer a discount to customers who pay using cash/check instead of a card (credit or debit). So, your customers will actually pay only the marked amount of goods purchased because the processing charge is incorporated in the product cost. This enables the merchants to get 100% payment from the customer without incurring any card processing fee.
We can better understand the entire process of the cash discount program with the help of a hypothetical situation wherein a customer walks up to the convenience store’s register with goods worth $40. Now her attention is drawn towards a sign saying “5% service charge implies on credit card payments” which means the customer can save that 5% if he chooses to pay through cash. Therefore, the customer is actually getting an instant cash discount of 5% by paying the exact calculated total value of the goods purchased. Most banks allow users to withdraw cash using cash advance to get instant cash. Payments made through cash help customers save money and avoid additional charges and transaction fees associated with credit card payments. On the other hand, credit card payments are quite easier and faster but then a small fee or surcharge is included in that.
As part of the discount for cash program, the customers are rewarded with an instant cash discount on paying through cash. Hence, even if the credit card companies prefer customers to pay using cards, your customers will benefit more by paying in cash. By rewarding your customers for using cash for shopping, you are ultimately encouraging them to shop frequently from your store and opening up ways to sell more and earn more. The discount for cash program lets the customers pay using a credit card. The only difference you need to understand here is that your customers have the choice of incurring fees (while paying through credit cards) or use cash to avail of a discount.
In both cases, the cost of goods will not change – only the additional fees will be included (if paid using a credit card) or excluded (if paid using cash). The customer who pays using cash will have the 5% (additional) charges deducted from the total worth of the goods as a cash discount. Hence, they don’t have to pay that extra cost (processing fee).
A cash discount program allows the merchants to accept full payment of each transaction without having to pay any fee or surcharge for accepting credit card payments.
Is cash discount legal?
Most merchants are not sure whether cash discounts are legal or not? If you are also confused about this, rest assured for cash discount programs are completely legal and 100% allowed. You can fearlessly offer discounts for cash payments to your customers.
If you are thinking of ways to increase your sales exponentially, cash for discount program can help you achieve that quite easily. Just imagine the scenarios where a customer has to pay additional charges (when using credit cards) other than the worth of the goods purchased and the same customer pays only the exact worth (while paying through cash) and saving the processing fees. Would that customer not like the latter one? As a merchant, you can extend the instant cash discount to your customers and motivate them to shop more and shop only from your store.
To know more about the discount for cash programs, talk to Payment USA representative right now or drop your queries online @Payment USA.
