Back to Blog
Cash Discount

Cash Discount: 7 Easy Steps to Saving a Lot of Dough

July 21, 2021 • by jclarknationalprocessing-com

Small businesses have a love-hate relationship with credit cards. On the one hand, accepting credit cards can facilitate more sales. Most customers and clients appreciate being able to pay for something later, or pay over time. On the other hand, the cost of payment processing solutions can eat away at business profit. One solution to this problem is to still allow credit card payments, but also offer cash discounts. Our cash discount program is easy to implement and will afford you many of the benefits we’ll outline below.

What is a cash discount program, and how does it work?

A cash discount program—also called early payment discounts or prompt payment discounts—involves offering a discount to customers who pay with cash and/or pay the entirety of their invoice within a certain time frame. Paying with actual cash (you know, the paper with faces on it), a check, or a store gift card—instead of credit or debit card payments—all fall into this category. Usually cash discount programs involve actual cash, but National Processing has a unique cash discount program that will allow you to incentivize debit card payments.

Here are 7 ways to save money offering cash discounts:

Zero Processing Fees

Payment processing solutions come with different fees, which generally range from 1.55% on the low end to as high as 3.5%. When customers pay for goods or services in cash, you won’t have to spend money on the fees charged by the company that makes and/or services your payment processing machines.

No Purchase Service Fees

This is a win for you and the client or customer. Your bank or payment processing company may charge your service fees related to taking payments. These fees may be applied to backend maintenance, customer support, or even the terminal you use to accept credit card payments. By accepting cash and/or taking payments in full, you can eliminate your service fees—and pass that discount on to the customer.

Eliminate Interchange Fees

Interchange fees involve your bank (the merchant bank) accepting a payment from the customer’s bank (the issuing bank). These fees come in addition to the payment processing fees charged by the payment processor you have selected. Most of these interchange fees are set by networks like Visa and Mastercard, and they generate some serious revenue for the aforementioned companies—which comes out of your profit…unless you remedy it with higher pricing. If you accept cash payments, you will eliminate these fees as well, and you can lower your pricing to reflect no hidden fees.

No Monthly Fees

Some businesses may offer clients or customers the opportunity to pay for goods or services in installments. This seems like an attractive option to consumers or clientele, but it comes with fees for the business. These types of recurring payments will usually need to be done with a credit card, which means payment processing fees and interchange fees, in addition to any administrative costs associated with monthly payment collection (such as a legally required mailed reminder for certain items in certain states). Offering cash discounts up front will eliminate these monthly costs.


Surcharge is a fancy way of saying you’ll pass the payment processing fees on to the client. In some states, adding a surcharge is not legal, so that leaves you paying more out of your pocket for the convenience of accepting credit cards. Taking cash payments or payments in full can eliminate these surcharges, which can help you formulate more attractive pricing.

Improve Sales Promotions

Consumers love saving money. Anything you can do to advertise a lower price will help you sell more of whatever it is you sell or do. That said, our cash discount program can help you generate some positive hype around your business with a more appealing price. This is especially applicable around big ticket items, such as an out-of-pocket medical bill or a piece of furniture.

Increase Number of Transactions

Offering a cash discount may also increase the number of transactions your business offers. Remember that not everyone wants to buy now and pay later. Some consumers and clients have the funds available and are looking for the best deal, so offering our cash discount program will help you capture these customers.

Common examples of cash discounts include cheaper prices at the gas pump for customers who pay cash. Providing cash discounts is legal across the United States, but usually this discount must be notified in signage (which is why, for example, you’ll see two prices at the pump).

Remember that customers can still use a credit card if they’d like, and you can take their payments with a merchant services provider like National Processing—but offering cash discounts can help you earn extra sales and save money on payment processing fees.

That’s why we think offering our cash discount program will really benefit your business by encouraging customers to pay cash with debit cards. It’s not hard to implement at all, since we provide the terminals and the back end support. The only thing you’ll need to do is change your pricing to reflect a 3.8 to 4.0% difference for non-cash payments, acknowledge that difference on customer receipts, and display conspicuous signage about the cash discount program. Once you’ve done all that, you’re on your way to reaping the many benefits that come with customers making their purchase by debit card.

Blog Search
Most Read Blog Articles
The Key Disadvantages of POS Systems Every Business Owner Should Know The Key Disadvantages of POS Systems Every Business Owner Should Know July 21, 2021
Voice Authorization Basics Voice Authorization Basics July 20, 2021
Is Apple Pay Safe? It’s Safer Than Most Credit Cards Is Apple Pay Safe? It’s Safer Than Most Credit Cards September 13, 2021
High-Risk Check Processing High-Risk Check Processing July 20, 2021
Understanding What Registered ISO/MSP’s Are Understanding What Registered ISO/MSP’s Are July 21, 2021
Blog Categories
All posts 159
ACH 27
Cash Discount 12
Chargebacks 6
Clover 1
Credit Card Processing 122
Credit Card Reader 9
Educational Resources 10
EFT Payment 18
Featured 5
Fees 4
Funding 4
Interchange-Plus Pricing 2
Other 24
Recurring Payments 1
Regulation 1
Security 11