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What Other Merchant Processors Won’t tell you about Cash Discounts

It’s a general rule in business to avoid steering clients towards a competitor. For many payment processing solutions, that competition is a cash discount program. Cash discounts are given by businesses to clients and customers who pay for goods or services with cash, check, or gift cards. In some cases, cash discounts are called an early payment discount and offered for paying in full by a certain date.

A merchant processing service facilitates credit card and debit card transactions. These companies make their money with processing fees, so they want businesses to encourage the convenience of credit card usage. For example, they might provide branded signs or stickers to display in the window, that this business accepts Visa, Mastercard, Amex, and Discover. Merchant processing companies usually do not want you to take cash payments, because they lose out on the service and processing fees.

But at National Processing, we have a unique approach to the cash discounts and actually encourage our customers to join our cash discount program, so they can benefit from the following perks:

You can reduce or even eliminate fees.

Customers don’t know it, but every time they pay with a credit card, a business has to pay service fees, processing fees, merchant account fees, interchange fees, and other associated fees for maintenance like statement fees and technology and tools fees. With all those fees, you’re probably wondering why businesses want to accept credit cards at all. Truth be told, accepting credit card payments does facilitate more business, especially inside the US. But a business can still take credit card and debit card payments and save some money at the same time by enticing customers with lower pricing—pricing that reflects no hidden fees shouldered by the merchant.

You can reduce chargebacks.

Chargeback is a fancy way of describing a customer who goes over your head and asks the credit card or debit card issuer to give them their money back. Many times these chargebacks are issued because of a fraudulent payment, but you can still end up taking the hit—losing merchandise and losing out on payment. Even when a chargeback is warranted, the card issuer and/or your own merchant bank can slap you with additional fees. Encouraging cash payments with our cash discount program puts the ball back in your court in terms of handling returns.

You can increase cash on hand.

Some businesses don’t like to have too much cash on hand, and view it as a liability. But there’s no arguing the fact that actual paper currency in your till is yours to keep, with no fees attached. Additionally, if your business involves some aspect of buying and selling—collectibles, vehicles, properties—having cash on hand is a huge benefit. Remember the proverbial adage that money talks! On a smaller scale, it’s also nice to be able to make change in a setting with a high volume of potentially cash transactions, like in food services. You don’t want to have to lose customers because you can’t break a $20 bill.

You can provide buyer discounts and attract bargain hunters.

Consumers love a good deal. With the advent of online shopping comparisons, they are able to research the best bang for their buck more than ever. Take advantage of this consumer penchant for saving by offering our cash discount program. This could come in the form of an actual percentage discount for using cash, check, or gift cards. Or, it could come in the form of offering a lower price for payment in full up front, which is common for big ticket items. That way, you don’t lose the clients or customers who want to or need to pay over time—and you’ll attract the consumers looking for the best deals.

You can get paid quicker.

Nothing beats the speed of cash going right into your till. By contrast, it can take time for the actual value of a credit card or debit card transaction to land in your bank account—of course, only after fees have been removed. If your business involves a high rate of turning over products, getting paid quicker is a huge boon to keeping supplies moving and expanding your business when you want to. Alternatively, if your business requires some rapid executive decision-making, having the money you need now is a huge benefit.


So, should I take cash only?

It’s best practice to take card payments and cash payments. You cannot deny that most consumers carry and appreciate the convenience of paying with plastic. To that end, you will want to work with a merchant processing company such as National Processing, which values transparency and sets competitive fee pricing. But you will also want to accept, and even encourage cash payments as well for all the reasons mentioned above.

Some of these cash payments will be made with a debit card, which is why you should implement our cash discount program. It’s a great way to incentivize cash payments and reap all the rewards outlined above.

We’ll provide the payment terminals, so all you need to do is collect the debit cards. In return, you will have to follow a few simple rules like providing signage about the discount in a visible place, along with changing pricing to reflect a 3.8 to 4.0% increase in pricing for non-cash payments, and acknowledging non-cash adjustments on the customer’s receipt.


That’s really all there is to it—and in return, you’ll reap all the rewards we’ve outlined above.





Posted in Cash Discount, Cash Discount Program on Aug 14, 2020