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Education

The power of cash how cash discounting works and how you can help
merchants implement this strategy to increase their profit
discount programs margins and remain competitive in the market.
What is a cash discount program?
For those new to the payments business, a cash discount
program is a payment processing strategy merchants
employ to encourage customers to pay with cash rather
than a credit card by offering a discount on the purchase
price for those who pay with cash. The discount is usually
a small percentage of the purchase price, up to 4 percent.
This is often used by small businesses to mitigate the total
expenses of credit card processing fees, which can be a
financial downside of credit card acceptance. Depending
on the terms of an individual merchant's processing
agreement, fees and how they are assessed vary.

In addition to offsetting the impact processing fees have
on merchant profits, cash discounting may also increase
customer sales, because when customers are given the
option to receive a discount when paying for cash, this
can incentivize impulse purchases, which increases sales
volume totals.
By Elie Y. Katz Incentivizing customers to pay with cash
National Retail Solutions
There are more ways merchants can incentivize customers
redit cards offer many advantages to both cus- to pay with cash. Card brand rules dictate that merchants
tomers and merchants over paying with cash. prominently display signs or stickers near the POS system
They provide convenience, security, and the to inform customers that a cash discount is available. And
C ability to earn rewards or cash back on pur- these notices work in merchants' favor, calling attention to
chases. On the downside, merchants must pay a fee for their chance to save money. Merchants can also advertise
each credit card transaction, which can be detrimental to on their website and on social media platforms to reach
their bottom lines. more customers.

To mitigate this issue, some merchants and their service Additionally, merchants can train their staff to inform
providers have found a creative solution: encouraging customers about the program and the benefits of paying
customers to pay with cash. With cash discounting, with cash. To make the program successful, merchants can
customers can save money while also helping lower also regularly evaluate the effectiveness of the program
processing costs for merchants. In this article, I'll explain and adjust it as needed. And they should consider
implementing other incentives, such as exclusive deals
or rewards, to encourage customers to use cash for their
Call me today! purchases.
Let me help you
with your Cash discount programs have been legal since the Durbin
advertising Amendment, which was passed as part of the 2010 Dodd-
Frank Act and regulates the amount merchants can be
success. charged for processing debit cards. Businesses can legally
707-284-1693 offer a discount to those who pay in cash, but they need
to be sure they are always operating under the law. Thus,
merchants' service providers need to be sure to make them
aware of a number of issues.
Compliant cash discounting

For a cash discount program to be compliant, merchants
R R ick Aston must disclose terms to customers up front and use a

Senior Media Partnership Specialist reputable cash discount provider. They can include this
information on the signs they place around the store.
Rick@greensheet.com
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