What is Cash Discount?
Cash discount is a pricing strategy where merchants offer a reduced price to customers who pay with cash instead of credit or debit cards. The Merchant typically adds a 4% fee to all bills. The 4% fee is waved if the customer pays in cash, this essentially gives the customer a discount for using cash. This helps the merchant to cover most if not all credit card processing fees.
Why would a business offer a Cash Discount?
1. To reduce processing fees: Credit card processing fees can be expensive, especially for small businesses. Offering a cash discount can encourage customers to pay with cash instead of credit, reducing the fees the business has to pay to the payment processor.
2. To increase cash flow: By offering a cash discount, a business can incentivize customers to pay upfront, providing a quicker injection of cash into the business’s accounts.
3. To simplify accounting: Cash transactions are easier to track and record than credit card transactions. By encouraging cash payments, a business can simplify its accounting and reduce the need for complicated reconciliation processes.
4. To attract price-sensitive customers: Some customers are looking for the best deal and might be more likely to choose a business that offers a cash discount over one that doesn’t.
Contact Us today.
Reduce Fees
Increase Cash Flow
Simplify Accounting
Attract Customers
Cash Discount
- Better rate
- No hidden fees
- Honesty
- Support