Over the years, consumers have been incentivized by lucrative rewards and points to use credit cards. For most people, the decision to use a credit card makes good sense as their purchases help pay for vacations and travel. Credit card companies don’t give away these lucrative rewards for free- someone has to cover the cost. Unfortunately, merchants are paying for those rewards through their fees – prompting many business owners to implement ‘cash discount’ programs.
Cash discounts are a form of credit card processing where the customer pays the credit card fee or receives a “cash discount” for not using a credit card. Cash discount programs have been utilized by gas stations for many many years. Consumers are given the option to pay with cash inside or pay a slightly high credit price, to pay at the pump. Most people opt to pay a higher price at the pump for convenience and rewards. Learn more about the pros and cons of offering cash discounts here.
While being able to accept credit cards is the lifeblood of most businesses, the high fees can be crippling. Rather than increase prices or suffer lower profitability – business can offset steep credit card fees via a cash discount incentive.
There are a number of different types of businesses that can benefit from a cash discount program but it’s not a good fit for everyone. Merchants well suited for Cash Discount programs are businesses with a strong following and/or unique products and services. Think of your favorite, crave-worthy restaurant; trustworthy auto mechanic, art gallery, or hair salon. Most people shop and dine at those places because they love what’s offered and will likely pay a small percentage more to utilize their credit cards. Cash discount programs are becoming more common as merchants are able to get out from under climbing credit card fees while consumers are given a choice. Customers can pay by cash and avoid the fees or pay by credit card and receive the rewards.
The best way to ensure that your business has the lowest credit card processing fees is to choose a payment processor you trust and know your numbers. Far too many business owners are unaware of how their rates are calculated, uncovering hidden fees or if their rate has increased. For this reason, clarity is a key component of our mission at Pay Proudly. We truly enjoy helping a merchant understand their merchant statement, calculate their effective rate, and compare over previous years. We want every merchant, even those who are not our clients, to understand where their money is going so they can keep more of it.
At Pay Proudly, we spend time getting to know each merchant and developing custom payment processing solutions that meet their unique needs. We are vested in our merchant’s success and know successful business is good for the community.
Our team of processing experts has over 25 years of experience and a reputation for providing the best processing rates with unparalleled levels of transparency and support. Call us at (843) 707-6110 or click here for a complimentary rate audit and comparison.
