Credit Card Processing
What are The Benefits of Cash Discount Credit Card Processing?
The main benefit relates to eliminating or reducing card-processing fees associated with credit cards accepted. After deciding not to process cards, you will not have to pay for the services. But if you have already priced your products or services to cover the card processing fees, this benefit might not make sense for your business.
Easier to Implement
Apart from being more accessible to achieve, the program is also easier to explain to customers. Some merchants isolate and then pay for the card processing by assessing surcharges on the products customers buy with credit or debit cards. That comes with numerous challenges. For example, adding card-processing surcharges is illegal in many states. Implementing cash discounts, however, is legal in all states. Explaining that every item in the store is priced with built-in service fees is usually easy. The merchants can also deduct the fee easily if someone prefers cash payment.
Encourages Cash Payment
Even though most individuals prefer to utilize card payments, cash discounts incentivize them to use cash instead of debit or credit cards for all their purchases. In other words, the time between the sale and the access to funds is minimal. Such transactions do not involve wait time or processing time for the money to get on the merchant’s hand. Moreover, this helps merchants eliminate fraud exposure.
After reducing the number of customers using credit cards in your store, chargebacks will also diminish. If chargebacks have been a massive problem for your store, the decrease might help you minimize the card fees you pay because you will be at a lower risk.
A Great Marketing Tool
The cash discount might be a useful marketing tool for your restaurant or retail store that will eventually attract more customers. The word “sales” is known to attract more people, and that is why most businesses display it outside of their stores at the end of the year. Getting more people inside your store should be your primary goal throughout the year.
Ideally, people will get in for a single item and go out with more. Even though a 4 percent discount will help you cover the cost of processing your cash discount service, it will be a useful sales or marketing tool if you implement it in the right way.
Complete processing fees elimination is essential to most merchants. Merchant level salespeople benefit from the programs due to the above average margins associated with them. However, when choosing a type of cash discount processor, you should educate yourself on the associated problems.