Ultimate Guide: Cash Discount Processing Explained
Updated: 3 days ago

Cash discount processing is becoming an increasingly popular payment processing method for businesses of all sizes. With cash discounting, merchants can reduce their credit card processing fees by incentivizing customers to pay with cash or check instead of credit cards. This comprehensive guide will explain everything you need to know about cash discount processing.
Definitions For Cash Discount Processing?
Cash discount processing allows merchants to offer a discount to customers who pay with cash, check, or ACH payments. This discount typically ranges from 1-4% of the total transaction amount. The discount incentivizes customers to use these lower cost payment methods rather than credit cards.
For the merchant, cash discounting shifts some of the credit card processing fees to the customer. Merchants pay around 2-4% in credit card processing fees on each transaction. With cash discounting, a portion of these fees are passed onto credit card customers in the form of "surcharges". Cash and check customers get a discount equivalent to the surcharge amount.
Investopedia - What Is a Cash Discount, and When Are They Used?
Fit Small Business - What Is Cash Discounting? Small Business Guide
Paystri - What is Cash Discount payment processing?
Harbortouch POS Software - Cash Discount Program
How Does Cash Discount Processing Function?
There are two main steps to implementing cash discount processing:
1. Set up Cash Discount Rates
First, the merchant needs to determine their cash discount rates. This involves calculating the average credit card processing fees paid across all card types like Visa, Mastercard, Discover, AMEX, etc. Typically the cash discount rate is set slightly lower than the average credit card processing rate.
For example, if a merchant pays the following processing rates:
Visa: 2.5%
Mastercard: 2.5%
Discover: 2.5%
AMEX: 3.0%
The average processing rate is 2.625%. So the merchant may set their cash discount rate at 2.5%.

2. Configure the POS System
Next, the POS system needs to be configured to handle cash discount processing. There will be separate payment buttons for "Credit Card" and "Cash Discount".
When a customer pays with a credit card, they are charged the regular listed price with no discounts or surcharges.
But when a customer chooses the "Cash Discount" button, the POS system will automatically deduct the pre-set cash discount percentage from the total transaction amount.
So if the cash discount rate is 2.5%, a $100 transaction would be discounted down to $97.50 for cash/check customers.
The Plus Side Of Cash Discounting
There are many potential benefits to implementing cash discount processing:
Lower processing costs - By incentivizing cash payments, merchants pay fewer credit card processing fees. Over time this leads to significant savings.
Pass costs to customers - Cash discounting allows merchants to shift a portion of card processing costs to credit card users.
Save customers money - Customers who pay with cash or check can enjoy discounts of 1-4% on each transaction. This provides a monetary incentive for customers to use lower cost payment types.
Increase sales - The discounts offered for non-credit card payments can encourage customers to buy more goods and services.
Attract new customers - Cash discounts can be advertised to attract new customers looking for deals.
Remain competitive - As cash discounts become more common, merchants may need to implement them to remain competitive.
Compliant - Cash discounting when implemented properly is compliant with card network regulations.
Is Cash Discounting Legal? - Is It Legal Everywhere?
Cash discounting is legal in the United States and Canada when implemented correctly. There are a few key requirements:
The cash price must be the posted price visible to customers.
The cash discount must be clearly disclosed to customers before transactions are completed.
Customers should see the regular price as well as any discounts or surcharges that will be applied.
Cash discounts must be offered strictly as an incentive for a particular payment type. Merchants cannot impose mandatory fees or surcharges on credit card transactions.
As long as these requirements are met, cash discounting is permitted under the card network and payment processing rules. Merchants found violating these standards could potentially face fines, higher fees, or termination of their payment processing services.
It is highly recommended that merchants consult closely with their payment processor before implementing cash discounts. The processor can ensure proper compliance and provide any documentation or signage required.
Cash Discount - What Your Business Will Need
Here are some key requirements for legally implementing cash discount programs:
Post visible signage - Clear signage must be posted at the point of sale and on printed materials informing customers of the cash discount pricing. Signage should show the regular price as well as the discounted cash price.
Disclose terms upfront - Any surcharges or discounts must be clearly disclosed to the customer before the transaction is completed. This allows them to select their preferred payment method.
Refund original tender - If a credit card customer requests a refund, it must be issued at the original credit card price with no discounts or surcharges applied.
No minimums/maximums - Discounts and surcharges must be implemented as fixed percentages. There cannot be minimums, maximums or tiered pricing structures.
Follow card network rules - Visa, Mastercard, Discover and AMEX have detailed rules around cash discounts that must be followed. Close coordination with your processor is crucial.
Cash Discount Programs - Things To Remember
Here are some best practices merchants should follow when implementing cash discount programs:
Consult closely with your payment processor and follow all guidelines.
Train staff on properly processing cash discount transactions.
Post clear exterior and interior signage at all entrances and points of sale.
Disclose terms on all printed materials like menus, invoices, online checkout pages, etc.
Set discounted cash prices equivalent to the average credit card processing costs.
Remain compliant with card network rules by avoiding credit card surcharges.
Refund customers via original payment method and price paid if requested.
Offer cash discounts consistently across all products, services, and delivery methods.
Integrate cash discounting directly into your POS system for seamless transactions.
Cash Discount Processing Examples
Here are industry examples illustrating how cash discount programs work:
Retail Industry
A retail store pays 2.5% in credit card processing fees on average. They decide to implement a cash discount program with a 2% discount on all cash/check purchases. Their signage would show:
Regular Price: $100
Cash Discount Price: $98
When a credit card customer spends $100, they pay $100. A cash customer buying the same $100 item would get a 2% discount and pay $98. The store benefits by paying lower processing fees on the cash/check transactions.
Restaurant Industry
A restaurant is charged 3% in credit card fees on average. They implement a 2.5% cash discount rate. Their menu would show:
Hamburger - Regular Price $10
Hamburger - Cash Discount Price $9.75
A credit card customer pays $10 for the hamburger. A cash customer gets a 2.5% discount and pays $9.75. The restaurant reduces its processing costs by incentivizing cash payments.
Healthcare Industry
Healthcare businesses pay some of the highest processing fees given compliance costs. Cash discounts help substantially lower these expenses.
A small doctor's office offers a 3% discount for cash/check payments on visits and procedures to reduce their credit card processing overhead.
A dentist provides a 2% discount on all non-insurance cash/check payments, making care more affordable for uninsured patients.
A clinic gives a $10 discount per vaccine appointment when paying the $75 admin fee in cash rather than credit.
Professional Services
Savvy service firms use cash discounts both for savings and as a negotiation tactic to secure business.
A marketing agency offers new clients a 5% discount on their initial project fees when paid by check rather than credit card.
A law firm provides a 2% discount on their legal fees for any payments over $10,000 when paid via cash or wire transfer.
An HR consulting company gives customers a 3% discount on annual contracts paid annually in advance by cash or ACH.
Non-Profit Industry
For non-profits where every dollar matters, cash discounts help stretch budgets further.
A charitable organization offers a 3% discount to donors who contribute over $500 via check instead of credit card.
An animal shelter gives a 2% discount on adoption fees paid with cash rather than credit.
A youth program provides a $5 discount on registration fees paid in cash for their after school activities.
Contractors & General Contractors
Contractors paying for costly materials appreciate cash discounts reducing their overhead costs. The opportunities to implement constructive cash discounts are nearly endless across all industries.
A roofer offers a 3% discount for cash/check payments on all projects over $5,000.
A plumber provides a 2% discount for seniors paying plumbing service bills in cash.
A landscaper gives a 5% discount on cash/check payments for annual maintenance contracts.
Automotive
With high ticket services and parts, auto businesses benefit greatly from cash discount savings.
An auto repair shop offers a 5% discount on labor fees paid in cash or check.
A car dealership advertises 2% off MSRP when paying for new vehicle purchases in cash.
A car wash provides a $2 discount on premium wash packages when customers pay with cash or debit cards.
Entertainment & Recreation
Cash discounts allow entertainment companies to lower their payment processing fees.
A movie theater offers 2% off admission tickets and concession purchases made with cash.
A sports complex provides a $5 discount on annual membership fees paid by check instead of credit.
An amusement park gives 10% off park entry fees when customers purchase tickets online in advance with PayPal or bank transfer.
Personal Services
Service providers dealing with daily client transactions can accumulate major savings via cash discounts.
A hair salon offers 5% off cuts and styles when paying the full service cost in cash.
A dry cleaner provides a 2% discount for cash payments over $20.
A gym advertises $5 off monthly memberships when customers pay 3 months upfront with cash/check.
Transportation
Transportation businesses with steady volume benefit from consistent cash discount savings.
An airport parking company offers 2% off daily rates when customers pre-pay for a week in advance via cash or check.
A limo service provides a 5% discount for cash/debit payments on rides over $100.
A taxi fleet advertises 10% off metered fares when customers pay with cash rather than credit.
Cash Discount vs. Credit Card Surcharge
There is an important difference between a cash discount and credit card surcharge:
Cash discounts incentivize non-credit card payment types by offering savings off the regular price. This is compliant.
Credit card surcharges charge additional fees only to credit card customers. Surcharges on credit transactions are prohibited by the card networks.
Be sure to avoid surcharges and frame your program properly as a cash discount offering savings to cash/check customers. Consult closely with your processor to ensure proper compliance.
Who Offers Cash Discount Processing?
Many payment processors and merchant services providers now offer cash discount processing programs. When researching providers, look for the following:
Seamless integration - Cash discounting should integrate directly with your POS system for streamlined transactions.
Compliance expertise - The processor should have extensive knowledge of card network regulations and provide proper documentation.
Customer support - Look for dedicated customer service and support for implementing and managing your program.
Fair transparent pricing - No hidden fees or inflated rates. Quality providers offer interchange-plus pricing.
Reputation - Select an established, reputable processor known for reliability. Check online reviews.
Quality cash discount programs allow merchants to save significantly on card processing costs while remaining compliant. Compare multiple providers carefully to find the best solution for your business.
Popular Companies For Cash Discount
Xsellarate Merchant Services
Zero Cost Processing
Xsellarate offers zero cost processing for small businesses, allowing them to eliminate 100% of processing fees by rewarding cash transactions.
Innovative Platform
The platform allows businesses to accept credit cards with no processing cost to the merchant. Their Merchant Growth Programs enable merchants to pass fees along to their customers, thus eliminating credit card processing fees.
Xsellarate Cash Discount System
This system allows merchants to offset merchant service fees without increasing the sale price.
Traditional Processing
Through partnerships with TSYS and FirstData, Xsellarate offers competitive rates for conventional processing.
Merchant Growth Programs
These programs include merchant processing, web services, and SEO. They serve as a one-stop shop delivering money back to businesses and providing essential web services to help them grow.
Availability
The cash discount system is available in all 50 states.
Transaction Process
There's no change in the transaction process, and businesses can collect 100% of their processing sales. They also offer next day funding.
Web Services
Xsellarate's professional web services team handles web design/redesign, social media integration strategy, UI/UX implementation & strategy, web hosting services, and e-commerce integrations.
Professional SEO
Their SEO team focuses on building a strong digital presence for businesses. Services include Google site indexing, monthly in-depth reporting, website content optimization, and more.
Equipment for Advanced POS Needs
Xsellarate offers SkyTab POS and equipment free of charge for merchants on Cash Discount Programs. This allows merchants to use advanced POS systems without incurring credit card processing fees.
Cost Comparison
An example is provided comparing the average cost for a restaurant using Toast Credit Processing vs. Xsellarate Credit Processing + SkyTab. The latter results in zero processing fees.
Description
Tidal Commerce offers payment processing and merchant services tailored for businesses and organizations of all sizes. They emphasize fair and transparent rates, U.S.-based technical support, and a commitment to save merchants money.
Honest Pricing
Tidal Commerce offers straightforward pricing plans. Learn more
Award-Winning Support
They provide U.S.-based technical phone support available 24/7/365.
Free Savings Analysis
Tidal Commerce offers a service where they show potential clients how much they can save every month by switching to their services.
Payment Solutions
They offer a variety of payment solutions to cater to different business needs, including stores, restaurants, banks, credit unions, or associations.
Waves POS
This is their point of sale solution equipped with features designed to grow businesses.
Cash Discount
Tidal Commerce offers a cash discount program where businesses can save significantly when their customers pay with cash.
Banks
Banks can add revenue and enhance their service offerings with a Merchant Services Program powered by Tidal Commerce.
Agents
There's an opportunity to become an independent agent with Tidal Commerce, allowing individuals to start earning quickly and grow at their own pace.
General Overview
Shift Processing offers credit card processing solutions for businesses, emphasizing affordability and transparency. They aim to provide the cheapest credit card processing by eliminating all processing fees.
How it Works
The process involves an initial strategy call to understand the business, followed by a customized quote to eliminate fees. Businesses then receive free equipment for setup and can start saving money with each transaction.
Who Uses Shift Processing?
Their services cater to various sectors including Retail Businesses, Service-Based Businesses, eCommerce Businesses, High-Risk Businesses, and Small Businesses. They emphasize the benefit of zero fees for all these sectors.
Testimonials
Various businesses have provided positive feedback about Shift Processing. For instance, Alabama Alarm Company mentions their success with Shift and appreciates the elimination of fees. Party Time Rentals praises the customer service and rates.
Free POS System
Shift Processing offers a free POS system or countertop terminal when businesses switch to the Shift Cash Discount program.
Zero Fee
The core offering is the Zero Fee program, which allows businesses to keep 100% of their earnings by offering the cheapest credit card processing available.
General Overview
PaymentCloud is a leading provider of merchant services tailored for high-risk businesses. They emphasize secure, fast, and reliable payment processing solutions.
High-Risk Merchant Accounts
PaymentCloud specializes in high-risk merchant accounts, ensuring businesses in industries often deemed "high-risk" can still process payments securely.
Chargeback Prevention
They offer tools and strategies to help businesses minimize chargebacks, which can be detrimental to high-risk businesses.
Integrations
PaymentCloud integrates seamlessly with over 100 platforms, ensuring businesses can easily incorporate their payment processing solutions.
Secure Processing
They prioritize security, offering PCI compliant solutions and advanced fraud protection.
Diverse Payment Options
PaymentCloud supports a variety of payment methods, including credit card processing, eCheck and ACH processing, and more.
Dedicated Support
They provide dedicated account managers to assist businesses throughout the setup process and beyond.
Program Overview
VizyPay's Cash Discount Program is designed to empower small businesses to take control of their credit card processing and save on processing fees.
Subscription Model
The program is offered on a low month-to-month subscription, allowing businesses to process unlimited credit card transactions and offset up to 100% of processing fees.
Equipment Placement
VizyPay provides complementary processing equipment to businesses, ensuring a smooth transition to their platform.
How It Works
The Cash Discount Program allows businesses to build the cost of card processing into their pricing. When a customer pays with a card, VizyPay's technology automatically isolates the processing fee included in the price and applies it to the merchant’s processing cost. This allows business owners to offset up to 100% of their processing fees.
Cash Discount Definition
A method of increasing the price for all customers, while offering a discount to those who pay with cash. When a customer pays with a card, VizyPay's technology isolates the price increase and applies it to the merchant's processing fees.
Processing Bill
The Cash Discount program is offered on a low month-to-month subscription, ensuring that the processing bill remains predictable and consistent.
Equipment Requirement
VizyPay's Cash Discount program can integrate with almost every technology. They also offer multiple POS and terminal options for those looking to upgrade.
Suitability
The program is suitable for businesses that want a predictable processing bill, wish to eliminate processing fees, do not want long-term commitments, and require efficient customer support.
Industry Suitability
The Cash Discount program is versatile and works well across all industries. It is especially beneficial for businesses that offer quoted prices or multiple payment methods, ensuring consistent profit regardless of the payment method used by the customer.
Automation & Compatibility
The program is fully automated and compatible with thousands of POS systems.
Subscription Model
Businesses pay a flat monthly subscription for unlimited transactions, eliminating unpredictable processing bills.
Commitment
VizyPay does not lock merchants into long-term contracts.
Transparency
VizyPay prides itself on transparency, with no hidden fees, annual fees, or monthly minimums.
Program Overview
The cash discount program is designed to offset merchant service fees. Most merchants using this program pay nothing for their credit card processing.
How It Works
The program implements dual pricing at the point of sale. With the help of a smart credit card processing terminal or point of sale device, merchants can offer both cash and credit pricing options, helping to offset the cost of processing.
Difference from Surcharging
The cash discount program is not the same as surcharging. Surcharging involves charging an extra fee for credit card payments, while the cash discount program offers dual pricing (cash and card prices). The card price includes the processing cost, incentivizing the use of cash.
E-commerce Businesses
E-commerce businesses can benefit from the cash discount program. While it's typically for in-person transactions, many payment gateways and e-commerce systems can accommodate cash discounts. E-commerce businesses can offer discounts for using ACH or electronic checks.
Business Suitability
The program works well with service-based businesses like automotive shops, HVAC, landscaping, and electrical. These businesses typically find success with dual pricing and cash discount programs.
Program Flexibility
Host Merchant Services believes in giving merchants a choice in the payment acceptance program that best suits their company and customers. They offer various programs like interchange-plus payment processing, cash discount, and compliant surcharging.
Compliance
Emphasizes the importance of staying compliant with credit card laws. Non-compliance can lead to reports to the state attorney general's office and potential legal action.
Gift and Loyalty Programs
Offers electronic gift card programs without the need for paper gift certificates. Provides detailed reports for every gift card issued or used.
Credit Card Processing
Incorporates flexible, cost-effective approaches for various industries. Offers cutting-edge POS technology and accepts transactions without the need for credit or debit cards.
Point of Sales (POS) System
Offers solutions like the Take Charge Point of Sale system, Smart Register system, and Sound POS for improved business decisions.
Mobile Payments and Countertop Payments
Allows credit card processing on iOS and Android mobile devices and offers surcharge programs through countertop payments.
Online Payments
Offers solutions for e-commerce businesses with reduced service fees on cash payments. Accepts all major credit cards and provides complete training and setup.
Virtual Terminals
Provides tools like the Take Charge Gateway program for improving business processes. Offers integrated shopping carts and Level 2 and Level 3 processing for reduced interchange rates.
High-Risk Processing
Assists in reducing the high risk associated with merchant accounts. Evaluates businesses to identify factors that make them high-risk merchants.
Capital Funding
Offers a business cash advance repaid as a percentage of credit card sales. Provides flexibility with no fixed time frame or payments.
Payments Made Personal
National Merchants Association has been a trusted partner and advocate in merchant services since 2004. They combine industry expertise with personalized service to create a positive impact for businesses.
The NMA Difference
NMA is dedicated to eliminating the unnecessary and unreasonable fees that some processors charge to accept credit cards. Merchant advocacy is in their DNA, and they provide a unique, personalized experience.
Account Optimization
The payments ecosystem changes rapidly. NMA's expert account optimizers individually evaluate and maintain merchant accounts, constantly looking for ways to improve profitability.
Business Development Partner
As a member of NMA, businesses not only save on their merchant services program but also gain a partner in business development. NMA prioritizes customer service and searches for additional tools and strategies to increase profits for merchants.
Online Payments
NMA provides tools for businesses to start accepting payments online quickly.
In-Store Payments
They offer solutions to process customer payments with ease while keeping costs low.
NMA Membership
NMA is the only organization in the U.S. that works on behalf of businesses to eliminate the unnecessary and unreasonable costs associated with accepting credit cards.
Software-Driven Solutions
i3 Merchant Solutions offers payment solutions that ensure faster, safer, and smarter payments.
Software
They provide exceptional payment solutions backed by their proprietary gateway software. Learn More
Hardware
They cater to various point-of-sale needs.
Card Processing & ACH
They offer best-value credit card and ACH processing to increase profits.
Security
i3 Merchant Solutions assists businesses in staying PCI compliant to reduce risks.
Customization
They offer customized payment systems and software integrations.
Integrity
The company has been in business since 1999 and is known for its experience and integrity.
Industries
i3 Merchant Solutions provides customized solutions tailored to specific industry needs. Create a Solution for Me
Partnerships
They collaborate with leading software companies, chambers, and associations to serve merchants across all 50 states. Let's Talk About Teaming Up
Reviews
Customers have given positive feedback about the difference i3 Merchant Solutions brings. Read Reviews
Blog
They offer a blog named "Card Talk" to keep merchants updated on payment tips and trends. Card Talk Article
Eliminate Processing Fees
Eliminate up to 95% of your credit card processing fees.
Free Credit Card Terminal
The Cash Discount Program includes a FREE Credit Card Machine. The Dejavoo Z11 is one of the newest countertop touch screen terminals available. It takes EMV, Magstripes, and NFC/Contactless payments and supports on-screen signatures.
Cash Discount Definition
A cash discount program allows business owners to offer a price deduction on goods or services to motivate customers to pay with cash. If they choose to pay by credit card, the business can pass along the cost of acceptance to the customers.
Legality
Offering a cash discount program is completely legal in all 50 states. The legality of passing fees to customers is covered by the Durbin Amendment as part of the Financial Reform Act.
Surcharge Program
A surcharge program adds an additional fee, or surcharge, at the time of sale if a customer is paying by credit card. This surcharge fee, normally 4%, covers the cost of credit card acceptance for the merchant.
Program Benefits
The Cash Discount Program accepts all types of credit cards and NFC payments, offers quick setup, is perfect for the food industry, eliminates unwanted fees & charges, offers transparent pricing, and uses smart technology.
How It Works
The solution rewards customers who pay in cash with a 4% discount. When a sale is made, processing fees are included and a small service fee is passed onto customers who pay with credit cards. Proper signage must be displayed at the point of purchase.
Credit Surcharge
The point of this program is to offset merchant service fees. This is considered surcharging customers who choose to pay with a credit card. The program is available in 46 states.
Cash Discounting & Surcharging Programs
Clearent offers programs that allow merchants to offset credit card processing fees, resulting in increased profits.
Cash Discount with Dual Pricing
A Cash Discount is when businesses offer a discount from the listed price to customers who pay by cash, check, or store-branded gift card, instead of with a credit or debit card. Dual pricing displays both list and cash prices for items.
Surcharges - Surcharging Programs In Certain States
Surcharges are fees added to the purchase cost for the convenience of using a credit card. Businesses must follow additional steps to comply with card brand regulations.
Convenience Fees - Things You Should Know
Fees charged for the convenience of payment through an alternative payment channel.
Service Fees (Category Specific)
These are added by merchants in specific government and education merchant category codes (MCCs).
Projected Savings
Clearent customers can save thousands per year in credit card processing fees.
Average Savings with Empower Program
Merchants can save an average of $13,000 per year with Clearent's Empower Program.
Customer Testimonial
A customer, Adventure North Resort, mentioned saving 3.45% on credit card fees over the same time period from the previous year with Clearent.
Perks of Processing with Paysafe
· Super-competitive processing rates
· PCI protection and next-day funding
· Access to dedicated customer service & technical support
· Integration with the full Clover™ suite and more
· Transaction & business insights through the iAccess business portal
· Integrated solutions for employee, inventory, & tax management
Trusted by Merchants
Over 200,000 merchants have trusted Paysafe with their processing needs.
Small Business Resources
Paysafe offers resources to help businesses understand important issues and opportunities.
Excel Tips for SMB Owners
Paysafe provides a series of articles offering Excel tips for small business owners, created by Emma Chieppor of Excel Dictionary.
Innovative Marketing Strategies
Paysafe offers insights on innovative marketing strategies for small businesses.
Cash Discount Processing and Equipment
To fully benefit from cash discounts, merchants need the right point of sale systems and equipment. Look for POS systems with the following features:
Separate payment buttons - Buttons for credit, cash discount, check, etc. make it easy to apply discounts.
Seamless integration - The POS should integrate directly with your payment processor for smooth transactions.
Customizable software - Ability to set cash discount percentages and add custom signage/messaging.
Detailed reporting - Review reports on cash vs credit transactions to monitor your program.
Receipt messaging - Custom receipts that show discounts/surcharges applied.
Chip card readers - Accept EMV chip cards for enhanced security.
Contactless - NFC payments allow fast tap-to-pay transactions.
Mobile - For businesses on the go, look for Bluetooth-enabled mobile chip card readers.
The right POS system tailored to your needs helps you get the most from a cash discount program. As a Clover POS partner, Xsellarate offers many cash discount optimized hardware bundles and custom software solutions.
Check Out Some of Our Latest Equipment Solutions:

Implementing Cash Discounts on Clover POS
The Clover platform provides an ideal POS system for cash discount processing.
With Clover, cash discounts can be implemented in three simple steps:
1. Set Discount Percentages
Customize cash discount rates for each payment type like cash, check, debit, etc. right from the Clover interface.
2. Configure Payment Buttons
Add dedicated cash discount and credit buttons. Clover allows full customization of payment options.
3. Process Transactions
When cash discount is selected, Clover automatically applies the pre-set discount percentage to the transaction total.
Key benefits of managing cash discounts on Clover include:
Seamless integration with multiple credit card processors like Xsellarate.
Customizable software, buttons, and receipts.
Detailed reporting on cash, credit, and discount transactions.
EMV security with end-to-end chip card encryption.
Omnichannel solutions for in-store, online, and mobile transactions.
With streamlined functionality and robust features optimized for cash discounts, the Clover platform provides a complete point of sale solution.
Cash Discount App for Clover POS
Specialized cash discount apps can further enhance Clover's capabilities for processing discounted transactions.
The Clover Cash Discount app provides many additional features including:
Easy discount setup - Quickly establish cash discount percentages per payment type.
Retail mode - Apply discounts by transaction or by product type.
Customizable branding - Add your logo and colors to receipts.
Automatic tax handling - Correct taxes calculated based on discounted totals.
Detailed reporting - Advanced analytics on discount usage and effectiveness.
Receipt messaging - Add custom notes about your cash discount program.
The Clover Cash Discount app integrates seamlessly with your Clover POS system allowing you to optimize and tailor your cash discount program.
Adopting Cash Discounts for Small Businesses
Cash discount programs offer significant benefits for small businesses looking to reduce credit card processing expenses. Here are tips for small businesses adopting cash discounts:
Start small with a 1-2% discount on cash or check payments and increase over time.
Train staff thoroughly on cash discount procedures and compliance. Have everyone onboard.
Add clear signage and disclose discounts across all customer touchpoints - online, in-store, etc.
Set up your POS system and apps properly to apply discounts automatically.
Communicate with customers on discounts available for non-credit card payments.
Analyze program data regularly to identify issues and optimize discount levels.
Keep current on card network rules and work closely with your processor.
With the right POS setup and staff training, small businesses can smoothly transition to a compliant, highly effective cash discount program. Partnering with experts like Xsellarate simplifies and accelerates the process.
Cash Discounts for Specific Industries
Cash discounts can provide cost savings for nearly any business that accepts credit card payments. Here are some examples of how cash discounts are used across different industries:

Restaurants
Seeing high card processing fees upward of 3%, many restaurants are turning to cash discounts to drive down these costs. Popular implementations include:
Providing a 3% discount for cash payments on all dine-in orders.
Offering a 2% cash discount for take-out orders paid in cash.
Applying a 4% discount on cash payments for delivery orders.
With tight margins, cash discounts allow restaurants to significantly reduce credit card fees and boost profitability.

Retail Stores
Retailers too pay high credit card processing fees, often 2-3% per transaction. Cash discounts help offset these expenses.
A small boutique provides a 3% discount on all cash and check purchases.
A toy store offers a 2% discount for debit card transactions to incentivize electronic payments over cash.
A hardware outlet implements a tiered cash discount program, with a 2% discount for check and a 4% discount for cash.
Properly implemented, these programs allow retailers to shift costs and drive sales with cash discounts.

Service Providers
Whether home contractors, lawyers, accountants or agents, service businesses see cash discounts keeping more money in their pockets.
A house cleaning company provides a 2% discount for cash/check payment on services.
A landscaping firm offers customers a 3% discount paying their entire season's services in advance via cash or check.
A real estate agency promotes a cash payment discount of $500 on their standard commission rates.
These constructive incentives allow service businesses to optimize their payment costs.
The savings and benefits are proving universal across sectors. More industries are adopting cash discounts in diverse ways to suit their business models and needs.
Cash Discount Processing Considerations
While cash discounts provide merchants significant benefits, there are some important factors to consider:
Staff training - Employees will need to be trained on properly applying discounts in compliance with card network rules.
Upfront costs - Some initial investments may be required for new POS systems, cash discount software, and signage.
Customer confusion - The difference between cash discounts and credit card surcharges must be clearly communicated to customers.
Accounting changes - Business accounting practices may need adjustment to track discounted sales and processing costs accurately.
Tax implications - Tax reporting may change when sale amounts are discounted. Consult your accountant.
Security - Merchants will need to implement security measures and best practices for handling increased cash volumes.
As with any substantial business change, thoughtful planning, preparation, and partner selection helps ensure a smooth transition to a successful cash discount program.
Is a Cash Discount A Good Fit For You & Your Business?
Cash discount processing delivers compelling benefits, but is not necessarily the best choice for every business. Consider these key factors when deciding if implementing cash discounts makes sense for your company:
Processing Costs
Do you pay high credit card processing fees of 2% or more? Cash discounts provide larger savings for merchants with higher processing costs.
Customer Payment Habits
Will your customers be willing to pay with cash or check to receive discounts? Assess your audience.
Average Order Value
For high ticket items or services, cash discounts can drive significant per-transaction savings that justify the effort.
Sales Margins
Thin margin businesses stand to benefit more from cash discounts in reducing their processing overhead costs.
Staffing Considerations
Do you have staff resources to take on training and extra cash handling procedures?
Space Limitations
Is there room for the extra signage and point of sale adjustments required?
Existing Hardware
Upgrading older systems may be required to integrate cash discounting.
Carefully weighing these factors helps determine if now is the right time for your business to make the switch to cash discount processing.
Get Started with Cash Discount
As cash discount adoption grows, merchants are reaping the sizable benefits of lower processing fees and increased sales. This definitive guide covers everything you need to know - from pros and cons to compliance requirements.
Fill Out A Free Consultation Form For You And Your Business:
Cash Discount Processing FAQ's
What are the benefits of cash discount processing?
The main benefits of cash discount processing are lower credit card processing costs, shifted fees to card users, and incentives for customers to pay with cash/check. This allows merchants to reduce overhead and maximize profits.
How much should a cash discount be?
Typical cash discount rates range from 1-4%, with 2% being a popular amount. The rate should be slightly lower than your average credit card processing fees to shift those costs to card users.
Is cash discount processing legal?
Yes, cash discount programs are legal in the United States when implemented properly by meeting card network regulations. Be sure to post visible signage and disclose terms clearly.
What is the difference between a cash discount and credit card surcharge?
A cash discount incentivizes non-credit payments by offering a discount off the regular price. A surcharge adds fees only to credit card transactions which is prohibited.
What do I need to implement cash discount processing?
You'll need a POS system and payment processor that support cash discount programs. Many providers now offer integrated cash discount offerings. You'll also need to post signage and train staff.
How do I set up cash discounts in my POS system?
Work with your POS provider to configure separate payment options for "cash discount" and "credit" transactions. Program the appropriate discount rates for each tender type in your system.
What are the downsides of cash discounts programs?
Potential downsides include upfront costs, accounting changes, tax implications, extra security procedures, and customer confusion if not properly communicated.
How do I get started with cash discount processing?
Talk to a payment processing provider about integrating cash discounts into your POS system and payment processing. They can help implement the program smoothly and ensure you remain compliant.
Can any business use cash discount processing?
Nearly any business that accepts credit card payments can benefit from cash discounts. Retail, restaurants, service providers, contractors, healthcare, and non-profits are some examples.
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