A cash discount is an incentive that a seller offers to a buyer in return for paying a bill owed before the scheduled due date. The seller will usually reduce the amount owed by the buyer by a small percentage or a set dollar amount. If used properly, cash discounts improve the days-sales-outstanding aspect of a business’s cash conversion cycle.
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To implement a successful cash discount program, the merchant educate their employees and customers on many of the confusing aspects of the cash discount program. The card brands require the merchant to provide at least one point of program notification prior to the sale that states that a service fee is applied to all sales and a discount is given for a cash payment. (We recommend several points of notification) Typical notification points include doors, registers, end caps and other prominent, highly visible areas. Every employee should be educated on how to verbally reference the program and should be announced at every transaction. Correct and consistent language is imperative for a successful implementation. Phrasing such as “Did you know you can save $X.00 by paying with a cash?” or “We offer X% discount on your purchase by paying in cash, would you like to take advantage?” can help encourage new buying behaviors. Language like this clearly conveys a discount for paying in cash. It is also recommended that merchant has some form of reference information handy to pass along to the customer if they have any questions. In working with countless business owners, there is one consistent fear about going to a cash discounting program. The fear is that by offering a cash discount program, they will anger and ultimately lose customers. Beyond the psychological advantage of using the jargon “Cash Discount vs. Surcharge”, the statistical data does not show any appreciable difference in sales loss due to cash discounting. In fact, our data shows that nearly 99% of customers simply disregard the convenience fee. By sticking to these key points and choosing a reputable service provider, you should be well on your way to implementing a successful cash discount program.The difference between a cash discount and surcharge
Reasons to Zero Credit Card Processing – – If used properly, cash discounts improve the days-sales-outstanding aspect of a business’s cash conversion cycle.
To implement a successful cash discount program, the merchant educate their employees and customers on many of the confusing aspects of the cash discount program. The card brands require the merchant to provide at least one point of program notification prior to the sale that states that a service fee is applied to all sales and a discount is given for a cash payment. (We recommend several points of notification) Typical notification points include doors, registers, end caps and other prominent, highly visible areas. Every employee should be educated on how to verbally reference the program and should be announced at every transaction. Correct and consistent language is imperative for a successful implementation. Phrasing such as “Did you know you can save $X.00 by paying with a cash?” or “We offer X% discount on your purchase by paying in cash, would you like to take advantage?” can help encourage new buying behaviors. Language like this clearly conveys a discount for paying in cash. It is also recommended that merchant has some form of reference information handy to pass along to the customer if they have any questions. In working with countless business owners, there is one consistent fear about going to a cash discounting program. The fear is that by offering a cash discount program, they will anger and ultimately lose customers. Beyond the psychological advantage of using the jargon “Cash Discount vs. Surcharge”, the statistical data does not show any appreciable difference in sales loss due to cash discounting. In fact, our data shows that nearly 99% of customers simply disregard the convenience fee. By sticking to these key points and choosing a reputable service provider, you should be well on your way to implementing a successful cash discount program.
With retailers feeling the effects of customers who can’t get credit, Zero Credit Card Processing shoppers with cash in their wallets have the ultimate bargaining chip when it comes to getting good deals. Cash discounts may not be as plentiful as in the past, but there are still some places where cash is king. Here are some things you can often get cheaper with cash. (Saving money can be a chore, but these tricks put money in your pocket with no effort at all. We are located near for better service.
The difference between a cash discount and surcharge
Business owners everywhere are asking, "What is Cash Discounting?" Simply put, cash discounting is the decision by a business owner to give a customer a discount for using cash as a form of payment. As an example, imagine a car dealership selling a car for $1,000. The owner decides to give a discount for a cash offer on the vehicle, agreeing to sell the car with the cash price of $950. That is cash discounting. But if a business owner already has his/her pricing set, how can they offer cash discounting without losing money. Well the answer is simple. By prominently displaying signage that states “The prices listed represent the cash or cash discounted price”, the business than can simply adjust the price at the till for credit and debit transactions. Now, as with many things in life, a simple solution is made a lot more difficult because of government interference. Many owners take the path of least resistance and add a percentage to each transaction for credit and debit transactions. And although fundamentally similar, this type of surcharging is not legal in most states. The critical difference to ensure compliance is the signage you use and the verbiage your staff employs. A Note on Surcharging To charge more for using credit cards is called a surcharge. Surcharging is not allowed in ten of the biggest states, including Texas, California, New York, Florida, and Colorado. Even when it is allowed, you may not surcharge check cards or pin debit cards. Since those comprise probably 60% of the volume, the ordeal becomes very confusing. So they simplest and safest solution to the problem is cash discounting. When you offer the customer a cash discount by informing them that the price they see in the store is the cash price, you have satisfied Visa and the politicians. In retail stores a sample sign would read something like this, “The posted prices represent the cash price for purchase. There is an additional cost for credit card purchases.” Specific language may vary by state and a reputable cash discount processor will help you with the correct signage for your state. Regardless of language, posting signage and executing the cash discount pricing is currently legal in all 50 states. There is tremendous freedom for a business owner to implement cash discounting. When that is coupled with the prospect of eliminating up to 90% of your credit card fees, cash discounting could be a great strategy to put more cash in your till.Cash Discounting Program SwyftPAY – Permanently lower your processing fees using cash discounting. Your customers will enjoy the benefit of the optional lower cash price and you will enjoy the benefit of more cash in your till at the end of the month. With many different Zero Credit Card Processing now available in the marketplace, it is important to know what programs are legal and effective. Cash Discounting from SwyftPAY is a Visa Approved, patented technology that is fully compliant with all state laws. To get the right information to make the best decision for your business, call us today 888-256-8917.
