Cash discount/dual-pricing programs offer a number of benefits for card-present merchants. For one, it allows a business to just about cut all of its payment processing fees entirely, as the fees will be covered by the businesses customers who choose to pay by card. Credit card processing fees can definitely eat into a business’s bottom line as not every business type enjoys high profit margins. Many businesses rely on lots of volume to be successful as the margins tend to be thin for their business type.

Beyond the idea of saving money on your bottom line by doing away with your credit card processing fees, what business doesn’t like taking more cash? If you market the program as a true cash discount and not a surcharge for using a credit card, not only will you avoid it looking like a negative to your customers, you’ll encourage more customers, especially those cost-conscious, to pay via cash. We can all think of a number of reasons why accepting more cash is appealing.

Many businesses have been faced with the reality of having to combat high inflation over the past couple years. Most businesses have raised their prices in order to deal with their shrinking profits due to the higher costs of goods. However, plenty of businesses have raised their prices a number of times over the past couple years and already feel like they’ve begun to see push-back from their regular customers as well as potential customers. Instead of raising prices again, why not reduce a potentially 3%-4% hit to your bottom line by getting rid of your payment processing fees altogether? The approach in how you market this can really make this feel like a benefit to your customers, rather than something that is just merely helping you save on business expenses.

The rising popularity of cash discount and dual pricing programs makes this easier for a business to implement. When customers see a number of the businesses they frequent,  doing the same thing, they begin to accept it as the norm. The majority of gas stations now offer dual pricing, a different price for cash/pin debit customers versus customers paying via credit card. This goes a long way in your customers accepting your business implementing a cash discount or dual pricing program as they’ve been conditioned to do so.

If customers see paying by credit card versus cash as a convenience, that’s actually a great thing. I would avoid marketing it as a convenience fee though and stick to the cash-discount messaging. People pay for convenience in their lives all the time. Look at the ever-growing popularity of people shopping online, as well as the success of delivery apps such as DoorDash, Postmates, and Uber Eats. People will gladly pay for the fees associated with the delivery service as they see it as a convenience.

The best part about the dual-pricing/cash-discount model is that regardless of how a customer chooses to pay for their purchase, you’re essentially eliminating the costs with accepting the payment. No need or even want to to reduce the amount of credit card transactions taken when you use this model. It may seem like a small tweak, but it can really be a game-changer for your business, especially if your bottom line, and saving money on it, is important to you.

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