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Cash Discounting - Don't Get Left Behind!

Updated: Aug 18, 2019

Cash Discounting is the fastest growing segment for small to medium sized retailers in the United States today.

Cash is still king!

Cash discount pricing programs are designed to save the merchant money. The merchant offers a discount to customers that pay via cash and checks. In turn, if the customer chooses to pay via credit card a small convenience fee is applied, helping the merchant to offset credit card fees.


For instore purchases using a credit card cash surcharge pos, signage must be present at the point of sale outlining this verbiage. In general merchants will use the viewed prices as the already “discounted” price and then charge a convenience fee if the customer chooses to use their credit card.


For merchants that sell online and that use a credit card cash surcharge ecommerce solution, the merchant must offer other payment options such as E-Check or ACH. Giving customers different options other than credit cards allows the merchant to be compliant with the credit card associations in all 50 states. In addition, cash discount credit card processing can be applied to all card types such as debit cards.


On the other hand, surcharging has been used interchangeably with cash discounting but it’s not the same. Even though one could view an added convenience fee for the use of a credit card is a surcharge, the 2 credit card pricing programs are different.

Unlike the use of cash discount pos processing systems, surcharging is a markup of up to 4% to cover credit card fees for utilizing credit card payments without having to accept E-Check, ACH, or Cash and cash equivalents.

Surcharging is not compliant in all 50 states. Below are the prohibited states for surcharging credit cards:

· California

· Colorado

· Connecticut

· Florida

· Georgia

· Kansas

· Maine

· Massachusetts

· Minnesota

· New York

· Oklahoma

· Texas


The statutes below are provided for information purposes only. NCSL cannot and will not provide assistance or advice in individual cases or transactions. To view the complete list of states that prohibit surcharging, go to http://www.ncsl.org/research/financial-services-and-commerce/credit-or-debit-card-surcharges-statutes.aspx

Credit card cash surcharge POS systems are being adopted by merchants big and small to combat the exorbinant fees for accepting reward credit cards. Credit card associations allow for the creation of reward credit cards that offer cash back, airline miles, double rewards, club discounts, store discounts to increase the usage of their branded credit cards by offering perks. Who pays for these rewards? The card associations are the true winners. The merchant is the one stuck holding the bag! Bag of fees. Merchants get stuck paying higher fees for accepting these reward credit cards. Why should it be?

Merchants are sick and tired of paying higher fees because of the creation of more rewards cards with more rewards than the previous versions. The proof is in the growing numbers of merchants adopting surcharge cash pos systems for retail, and credit card cash surcharge ecommerce.


To learn how cash discounting and surcharging works, simply contact Merchant Discount Rate or go to www.merchantdiscountrate.com

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