Nowadays, everyone is aware of the Cash Discount Program as the best way to offset the merchant service fees. A Cash Discount Program is an effective method of implementing some amount of service charges to the customers paying by card and at the same time providing a discount to the customers paying by cash. The cash discount program is also legal in all fifty states as per the Durbin Amendment (part of the 2010 Dodd-Frank Law) and it clearly states that businesses are permitted to offer Cash Discounting Program as an incentive that can incentivize while paying with cash. Though these types of programs have been used by the gas stations for years, still a lot of other businesses are planning how to implement the same.
General Requirements & Guidelines:
Though widely accepted, still there are some strict guidelines laid down by the card associations regarding the implementation of the Cash Discounting Programs as per the following:
- The door and the check out must be posted with correct signage.
- There should be a receipt mentioning the amount of additional service fee.
- The customers should be offered cash discount verbally.
Please note that though the gas stations post different prices, but in the case of retailers, it is not required. The posted prices are to be considered as cash prices and the signage allows for fees in case of payments to be made other than cash.
Application of the Service Fee & Technology:
Without the programming of proprietary technology into your terminal, you have to apply the service fee manually. In that regard, if the fee is applied incorrectly to a transaction, the additional fee charged to the customer is termed as a Surcharge and it is prohibited in a few states such as California, Florida, Texas, Oklahoma, Kansas, and Massachusetts. Even if the same is allowed in your state, there are certain strict requirements on the amount of Surcharge. As a merchant, it is mandatory to register with Visa or MasterCard to apply the surcharge. But a cash discount program has no such requirement of registration.
On the other hand, it is very important to know that many of the processors do offer a cash discount program, but the majority of them do not offer the complaint technology that is well compatible with your terminals. Therefore, it is always advisable to offer the one which is easily compatible with your terminal and this would also help to display the required line items on the receipt. Therefore, it would be a smooth operation in case of cash discount merchant processing or cash discount credit card processing.
How to help merchants in saving Processing fees?
One of the simplest and easiest ways to help your merchants save thousands of rupees is by eliminating processing fees. The merchants need to pay a one-time charge of a very minimal amount every month and can process unlimited card payments without any such hassle. This program is ideal for boutiques, restaurants, departmental stores, etc.
Thus, it is always better to pay a small amount every month and enjoy unlimited access to the Cash Discount Merchant Services. Apart from the above, if you are a small or a big business, it doesn’t matter and you can also enjoy unlimited access to your merchant statements.