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Jon Millikan

Expert Analyst & Contributor

The Core Benefits Of Cash Discount

Updated: Sep 29, 2023

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As a business owner, you are always looking for ways to improve your bottom line. One strategy that you may not have considered yet is offering a cash discount to your customers. In this article, we will explore the benefits of cash discounting and how it can help you save money on merchant services fees.

What is cash discounting?

Cash discounting is a payment processing strategy that encourages customers to pay with cash instead of credit or debit cards. When a customer pays with cash, they receive a discount on their purchase. The discount is usually a percentage of the total purchase amount, and it is clearly displayed at the store front or conspicuously present online.

How does cash discounting benefit business owners?

Lower merchant services fees

One of the most significant benefits of cash discounting is that it can lower your merchant services fees. When a customer pays with a credit or debit card, the merchant services provider charges a fee for processing the transaction. This fee can range from 2-4% of the total purchase amount, depending on the provider and the type of card used. When you offer a cash discount, you can offset some or all of these fees, which can save you a significant amount of money over time.

Increased cash flow

Another benefit of cash discounting is that it can help you increase your cash flow. When customers pay with cash, you receive the money immediately, which can help you manage your cash flow more effectively. You don't have to wait for the funds to be processed and deposited into your account, which can take several days.

Improved customer relationships

Offering a cash discount can also improve your customer relationships. Some customers prefer to pay with cash, and they may appreciate the opportunity to save money on their purchase. By offering a cash discount, you can show your customers that you value their business and are willing to reward them for their loyalty.

Reduced fraud risk

Finally, cash discounting can help you reduce your fraud risk. When customers pay with cash, there is no risk of chargebacks or fraudulent transactions. This can save you time and money in the long run, as you don't have to deal with the headache of disputing fraudulent charges.


Cash discounting is a simple and effective strategy for reducing your merchant services fees, increasing your cash flow, improving your customer relationships, and reducing your fraud risk. If you haven't already considered offering a cash discount to your customers, now is the time to do so. By implementing this strategy, you can save money, improve your business operations, and build stronger relationships with your customers.

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Jon Millikan

Expert Analyst & Contributor

Jon has been writing for Xsellarate about small business solutions and financing since 2022. He started writing professionally about business related topics in 2012. Jon has been featured in Business Insider, OC Journal, the OC Wave, Entrepreneur Magazine & other publications. He has a bachelor's degree in Business Administration from California State University Monterey Bay and currently resides in Huntington Beach, California.

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