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Education

chant must not profit from the more expensive relative to competi-
credit card fee. tors. Also, expressing a preference
Increasing Revenue for cash often carries the stigmatized
• The credit card fee and the perception of avoiding taxes (see
price of the product or service Cash Businesses and Tax Evasion by
for ISVs, ISOs must be processed together as Susan C. Morse, Stewart Karlinsky
and Resellers one transaction. and Joseph Bankman (https://reposi-

• The receipt must show the tory.uchastings.edu/cgi/viewcontent.cgi
?article=1552&context=faculty_scholar-
amount of the credit card fee ship).
as a separate line item.
• The merchant must not apply a It's worth considering why, in all
fee to debit cards. markets where both surcharging and
cash discounting are permitted, sur-
Surcharging versus cash discounting charging is much more prominent.

Is cash discounting a loophole that Take a look at higher education in the
Semi-integrated Healthcare gets around these rules? Our opinion United States: 81 percent of American
Solutions Solutions universities that accept cards pass
ECR All-in-one at CardX is no.
Solutions on a credit card surcharge (styled as
Most purported cash discount pro- a convenience fee), but not one uni-
grams are noncompliant, because versity uses cash discounts. Alan S.
they list the cash price on the shelf Frankel's amicus curiae brief in sup-
Improve Retention and then add a fee at the POS. This port of the petitioners in the Expres-
brings them under the surcharge sions Hair Design v. Schneiderman
rules, meaning fees cannot be case stated, "There is no indication
Offer More Features charged to debit transactions. Merely that even a single university sets tu-
claiming that a program is cash dis- ition based on the use of a credit card
count does not make it so. and offers a discount for check pay-
Expand into Healthcare ments."
More to the point, federal law defines
a "discount" as a reduction from the Similarly, in Australia, cash dis-
listed price as follows: counts are virtually nonexistent,
while surcharges are extremely com-
"The term 'discount' [...] means a mon. What's driving the clear prefer-
Contact Us! reduction made from the regular ence for surcharging? Surcharging
844-319-5635 price." 15 U.S.C. § 1602(q) allows merchants to maintain their
info@SoundPayments.com prices while processing credit cards
SoundPayments.com and at a true 0 percent cost. This pricing
model would be quoted as, "$10, with
"[T]he term 'regular price' means a 3.5 percent surcharge for credit."
®
the tag or posted price charged for
the property or service if a single Passing on the credit card fee is
price is tagged or posted." 15 U.S.C. changing the ISO business. The key
§ 1602(y)" to making the most of this opportu-
nity is ensuring you keep your mer-
The card brands agree, with Visa chants for the long term—which is
rules plainly stating, "A merchant is only possible if you're keeping them
permitted to offer discounts for pay- on the right side of the rules.
ing in cash, however, the discount
must be given as a reduction from
the standard price." Evan Weese is the marketing lead for CardX,
a Chicago-based technology company that
As a consequence, a true cash dis- provides credit card acceptance solutions to
count program must increase the businesses, government and education. He
price listed on the shelf and then re- can be reached at evan@cardx.com.
duce it at the register when consum-
ers choose cash. Very few merchants
want to do this, since increasing pric-
es on their shelves makes them look
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