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Have you ever been told by a merchant that you could get a discount if you paid by cash — normally somewhere between 3% to 4% off?
If you have, you’ve likely participated in a cash discount program, and you didn’t even know it.
A cash discount program is a way of transferring credit card processing fees onto the customer rather than the merchant, while still offering a way for customers to save on their purchase — if they choose to.
Cash discount programs work by incentivizing the customer to pay in cash so they
can avoid paying extra credit card processing fees.
It work like this:
The customer either pays with cash and avoids the fee or pays with card and accepts the extra fee.
We offer multiple methods of automatically integrating a cash discount program into your POS.
For more information on how you can get started using our cash discount program, chat with us now.
Get full access to a suite of payment tools to help you manage your business — free with your Fox Processing account.
Surcharge programs and cash discount programs are similar in that they both involve asking the customer to pay an extra fee for credit card payments. However, they differ in the way this offer is packaged on a legal and technical basis — as well as how it’s presented to the customer.
Surcharge programs are only legal in 40 states, while cash discount programs are legal in all 50. Cash discount programs are also easier to implement while meeting compliance standards.
Cash discount programs are also generally better received by the customer, as they view it as an opportunity to save rather than a sneaky fee.
Although it may sound like a cash discount program is just about verbally asking your customers to pay in cash, it actually involves more behind-the-scenes work with your payment processing.
A cash discount program requires a POS terminal to be configured to add in the fee in the proper, compliant place on the receipt and to calculate the fee accurately. If these things aren’t configured correctly, you risk violating the rules of Visa, Mastercard, and other major credit card companies, in addition to state laws, when applicable.
So in order to stay compliant to all legal and credit regulations, a cash discount program must be officially implemented by your payment processor.
In order to be compliant with all regulatory agencies, including state and federal law and credit card company rules, the following requirements must be met:
Fox Processing will provide you with everything you need to stay compliant and get started using cash discounts right away.
