Why Your Retail Location Should Offer Cash Discounting
How to Determine if a Cash Discount Program Fits Your Business
In a digital economy, there are many different payment method options to choose from, and customers demand a variety. As a retail business, you want to meet the demand; however, payment technology and integration often comes with costly fees to enable credit card processing, which can add an additional challenge for small businesses.
There is a solution to help merchants avoid costly fees while still offering innovative tech integrations: A Cash Discount Program. These programs are ideal for small businesses like convenience stores and independent restaurants, where a low average ticket price is common and the cost of implementing credit card processing has the potential to be high.
Cash discounting allows merchants to offset credit card processing fees by passing them directly to their customers, offering a discount for non-credit transactions to incentivize customers to pay with cash.
A cash discount program is beneficial for both merchants and their customers; however, they must adhere to a compliant program with the right point of sale and payment processing provider and equipment in order to work effectively.
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Clarifying the Cash Discount
You may be thinking passing fees onto customers sounds too good to even be legal, but it is. In 2010, the Dodd-Frank Law Durbin Amendment was passed, stating that businesses are permitted to offer an automatic discount to customers as an incentive to pay by alternative methods other than credit or debit card transactions. So how does it work?
With cash discounts, the full posted price of an item includes the credit card processing fees. If customers pay with a credit card, they will pay the full posted price of the item, but if they pay with cash, they will receive an automatic discount, paying the retail price minus the included processing fee. Customers appreciate the opportunity to save on cash transactions, while merchants enjoy the savings without needing to mark up their inventory to offset processing costs.
Better for Business and Bottom Lines
Cash-only retail is becoming a thing of the past. As fewer and fewer customers are carrying cash on them, the demand to accept credit cards has only increased. A cash discount program creates a frictionless, cost-saving transition to accepting both cash and all types of card transactions.
A cash discount program is easy to implement and simple to manage. Items are priced with a built-in service fee that is automatically included in card transactions and deducted when paid with cash.
With this, merchants can reduce their debt, protect their business from potential chargebacks, and retain more profits, and is a great way for a small or medium-sized business to compete with larger retailers.
Higher Potential for Merchant Savings
Implementing a cash discount program is easy. A reputable retail POS provider recognizes the cost-saving potential of a cash discount program for their customers. The best providers will offer certified cash discount hardware and software bundles to make it even easier and more cost-effective to implement. Look for a solution that integrates directly with your POS so that you can achieve quicker transactions, real-inventory tracking, and robust reporting.
The General Store offers a valuable, frictionless cash discount solution that is easy and cost-effective. We help you save on your POS technology and eliminate merchant service fees associated with credit card processing so that you can keep all your profits.
Contact our team at The General Store to get more information about our cash discount program and determine the right solution for you.