Ideally, people will get in for a single item and go out with more. Even though a 4 percent discount will help you cover the cost of processing your cash discount service, it will be a useful sales or marketing tool if you implement it in the right way. Complete processing fees elimination is essential to most merchants. Merchant level salespeople benefit from the programs due to the above average margins associated with them.
However, when choosing a type of cash discount processor, you should educate yourself on the associated problems. Around 33 percent of people prefer using their debit and credit cards to make purchases. That means that today, many people do not carry cash.
And if your customers are opposed to making cash only payments to get discounts, they might leave without making any purchase. That might lead to reduced sales. To provide cash discounts, you have to post in your place of business signage to let all your customers know that they will receive discounts if they use gift cards or cash to make a payment instead of debit or credit cards.
That is a rule that credit card brands have set and your business must follow it. You should be ready to incur printing costs and replace the prominent signage in your store if the need arises. Even more, some customers may see the offer in a negative light if expressed as a discount. For you to comply with this program, all your receipts should reflect that there are service charges on your products and cash payments eliminate the service charges.
You should, therefore, work with a provider like Harbortouch merchant services that offer this feature. Furthermore, you will have to observe all law changes around cash discounts to avoid penalties. Most studies have shown that most customers spend more money when using their debit or credit cards to shop. If cash is a more attractive option to you when it comes to managing credit card fees, you might discourage and depress your sale results.
Cash discount implementation in your business comes with several challenges. However, it will be more successful if you follow every rule. By observing all rules, you will be able to avoid penalties and issues related to cash payments. Be ready to evaluate your success programs. Will a cash discount eliminate the monthly processing fees?
With The Advantage Program from Harbortouch , you can offset your credit card processing costs, to learn more contact us today. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Post comment. Our team wanted to find a way for you to earn more money while running your daily business. That is where our new cash discount program comes in. This low cost payment processing program is rapidly becoming one of the best ways for many organizations to do just that.
Merchants enjoy reduced payment processing fees, an increase in sales through lower credit card processing fees and many businesses enjoy zero fee credit card processing! The way it works is your customers will be incentivized with a tempting discount to make payments with cash or by check rather than to use their credit cards. When they choose to use their credit card to pay, they will simply pay the retail, sticker price for the products. Cash paying customers will see their cash discount amount included clearly outlined on their receipt.
This two-pronged approach encourages your customers to use payment methods that are less costly to you by offering them discounts for choosing to pay by cash or check. This is actually a mutually beneficial program that makes taking payments less expensive for you as well as cheaper for your customer with the discount. The discounts they receive may be equal to the amount they are charged for using credit payments. The end result is that customers will quickly learn they can save money while also saving you money — all this adds up to more sales for you.
In some cases, you may even be able to drop them down to zero. If this program seems similar to others you might have seen or experienced name a surcharge program , it is important to note that a cash discount is not the same as a surcharge program.
Surcharges are focused around adding penalty fees to customers using a credit or debit card. Surcharge programs are also not legal in every state and cause a lot of customer resentment.
Because our program only gives incentivising discounts to cash customers instead of punishing card holders, it is fully legal in all 50 states and widely praised by both customers and merchants alike.
In summary; Surcharge programs motivate with punishments, whereas Cash Discount programs motivate with rewards. A discount to customers paying with cash is given to the customer. It essentially rewards them for paying with cash. So, while credit card companies may prefer your customers to pay with cards, they will actually be rewarded for using cash.
The cash discount program allows the customer to pay with a credit card, just like normal. The difference is that they get the choice whether to incur the fee that would normally go to you, the business owner, or use cash for a discount.
This is what the business has set as the credit card price of the goods. By utilizing cash discount merchant processing, the business receives the full payment amount of each transaction without paying any credit card processing costs or fees. As payments innovation continues to evolve, you will find your customers using credit cards as realtime payments more and more. This is because the payments innovation make paying with a card far more convenient for the buyer.
A cash discount can easily be confused with a credit card fee or surcharge, which is legal in only 40 of the 50 United States. A surcharge program is a type of credit card processing where you charge the consumer an additional fee or surcharge on top of the cost of goods to cover the merchant processing cost.
Surcharge programs are currently only legal in 40 states while cash discount programs are legal in all 50 states. Giving discounts for cash is almost always better received by the customer when compared to adding a surcharge fee.
Yes, it is legal to pass credit card fees to customers. It is legal and compliant to pass fees on using surcharge fees and cash discount programs. Surcharge fees are legal in 40 states while cash discount programs are legal in all 50 states.
The legality of passing fees to customers is covered by the Durbin Amendment as a part of the Dodd-Frank Law financial reform act. What should be asked though is if the card brand will allow passing merchant service fees and processing costs to the customer.
A cash discount program and a surcharge program are both payment systems that businesses use to recoup the merchant services fees that are charged each time a customer presents a credit card as a form of payment.
A surcharge program adds on an additional fee at checkout to cover the merchant services fees. A true cash discount program gives the customer a discount for cash payment by avoiding any additional costs. In many establishments that offer a cash discount program, the regular price or posted prices on each item are prices for credit card payment. With our cash discount credit card processing, your customers will love you.
When it comes to offering a credit card surcharge vs cash discount, which will your customer appreciate more? No, surcharge fees are not able to be applied to debit cards or other forms of prepaid cards, like gift cards.
Surcharge fees are directed towards credit card purchases, not cash purchases, as a merchant savings from credit card fees. Debit card transactions are not charged the same fees and have a different fee structure from credit cards or gift cards.
0コメント