What is a cash discount?
An emerging trend in small business credit card processing is cash discounts. It empowers business owners that are fed up with the current merchant processing fees to fight back by encouraging their customers to use cash.
Cash Discount 101
Rewarding customers with an instant cash discount helps businesses increase cash sales in their fight against high paying credit card fees. All price tags can reflect the Cash Discount; this is not a surcharge program or convenience fee! The most common example of a cash discount is the gas station model where they often discount up to ten cents off per gallon in a cash sale.
As of December 2017, there was an average cash discount of 4% at businesses. In many cases a business will increase prices by 4% and then apply a 4% cash discount. Cash savings and increased prices could lead to a major reduction in processing fees if this model is right for your business.The general problem with increasing prices for many small businesses is it puts them at a competitive disadvantage than businesses who don’t increase their prices to offset the fees.
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