1) Cash discount programs save small businesses money. Businesses that accept credit cards must pay a transaction fee on every credit purchase. A cash discount program helps the merchant offset some of these transaction fees without increasing overall rates. When customers pay with cash, there is no transaction fee, which saves the business money.
2) Cash discounts are legal. The Frank-Dodd law of 2011 prohibits any payment card network from inhibiting the ability of any business to provide a discount for payments made by cash or check.
3) You won’t lose money by offering a cash discount. Even if every one of your sales on Black Friday paid by cash, you’d still come out the winner. Cash discounts don’t actually cost the business anything; by offering a cash discount, your business actually saves money.
4) The cash discount program has been around for a long time. European businesses have been using the cash discount program for decades. Cash discounts have been given at gas stations in the U.S. for over 15 years. Today, businesses from government offices to public schools offer cash discounts.
5) You must post clear and obvious signage about the program. Legally, you must place signs at the business’ point of entry and point-of-sale that clearly explains the cash discount program and payment options. When your small business signs up for the cash discount program, the signage will be provided to you.
6) Cash discounts are not surcharges. Offering a cash discount means that you are providing a discount to those who pay with cash. You’re not adding a fee to those who pay with a credit card. Surcharging customers for using a credit card is not allowed in most states.
7) Receipts must include fees and discounts. Customer receipts must include the base cost of the product, the cash discount amount, service fees, and the total amount of the sale.
8) A cash discount program will not “scare away” customers who use credit cards. No one wants to pay additional fees on anything. But as more people realize how expensive it is for a small business to accept credit cards, they won’t mind that they aren’t getting the discount that those who pay with cash are getting. Surveys show that most credit card users would gladly pay an extra dollar or two for the convenience of leaving their cash at home.