The Down Low On Cash Discount

Brittany Aamodt

If you’ve been in business longer than ten minutes, you’re likely already familiar with credit card processing fees. These are fees that are added to transactions when a customer decides to pay with a credit card. Why? Because credit cards carry higher risk, and banks leverage this knowledge with higher fees that are usually at the expense of the business owner. Some companies choose to offset this cost by bumping up their prices. Another option is to implement a cash discount program to offset all or most of your credit card processing fees.

What Is Cash Discounting?

Cash discounting is exactly what it sounds like. It’s offering a small discount to consumers who choose to pay with cash or check instead of paying by credit card. With this method, business owners can avoid most of their credit card processing fees by incentivizing their customers to pay by cash or check. Cash discounting is a win-win for both the merchant and the customer, as long as the customer has cash on hand.  If the customer chooses to pay by credit or debit card, then they will not receive the cash discount.  The choice is left up to the customer, while the merchant is able to better control costs.  This ultimately affords merchants the ability to be more flexible in pricing their products and services and maintain a competitive advantage.

Can You Offer Cash Discounting?

The short answer is, yes! Cash discounting is legal in all 50 states, unlike surcharging which varies from state to state. There are a few guidelines regulated by the card industry you must adhere to in order to implement a compliant cash discount program.

Cash Discounting Compliance

To be fully compliant, a merchant must post signage at point of entry and point of sale, that clearly communicates the cash discount being offered, including the exact percentage of the discount. The intent of this signage is to ensure all customers are aware of the cash discount when making decision on how they will pay.

Additionally, the posted prices displayed for a merchant’s products and services must be the credit price, not the price that includes the cash discount.  The cash discount must also be clearly displayed as a separate line item on the customer receipt.

Finally, while not technically required, we believe it’s always best to verbally communicate to your customers, the option to pay with cash at the point of sale and receive a discount. Communicating their payment options at check-out ensures customers are fully aware of their payment options and provides an opportunity for them to ask questions or get clarification on your cash discount program. This will result in better overall customer satisfaction as you transition to cash discounting.

While compliance may seem like a lot of work, the good news is when you enroll in Rev19’s Cash Discount program, we take care of all of the required compliance for you.  This includes programming your payment terminal to include the cash discount, along with all of the required signage.

Pros & Cons of Cash Discounting

There are both pros and cons to moving to a cash discount program.  Obviously, the biggest positive factor is eliminating almost all of your credit card processing fees, which provides an immediate boost to your bottom line.  Other positive factors include the aforementioned flexibility merchants will have when pricing their products and services, along with decreased risk of chargebacks due to lower credit card volume.

Negative factors include the potential of rubbing some customers the wrong way, those that are not accustomed to carrying cash.  Additionally, some merchants may not be comfortable with their employees handling a larger volume of cash, this should also be taken into consideration when deciding if cash discounting is right for your business.


Although it’s not for everyone, cash discounting can be a very effective way for merchants to significantly reduce processing fees and increase profitability.  When making a decision to switch to a cash discount program, we encourage our merchants to dig in and fully understand the pros and cons, and ultimately make an educated decision based on their own unique needs. Rev19 is here to help guide you through your decision, provide any clarification you may need, and ultimately help you arrive at the best solution for you and your customers.


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