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What is a Cash Discount Program?

The cash discount program is a legal way (legal in all 50 states) to offset your merchant processing fees. Most merchants who use the cash discount program pay nothing for their credit card processing. You might be thinking that is sounds too good to be true, yet thousands of businesses across the country use this program. This includes brick-and-mortar, mobile, and online businesses. Here’s some more information on how a cash discount program works:

A cash discount program works by applying a small customer service charge on all customer transactions, regardless if the card is credit or debit. This charge is removed if the customer pays with cash, thus the name ‘cash discount’. True cash discount technology will automatically determine the service charge or discount amounts depending on the payment type. Legal cash discount programs must present a clear receipt detailing the service charge or cash discount amount and have proper signage in the business. Our cash discount program is compliant and within the guidelines of Visa, MasterCard, state and processor regulations. According to Visa & MasterCard, the cash discount amount can be up to 4%.

Although the cash discount program has become popular in recent years throughout the country, the program has been legal for more than 10 years. This is thanks primarily to the Durbin Amendment, an add-on to the 2010 Dodd-Frank Law. For more information or to implement it in your business, feel free to speak with us about it. 

What’s the difference between a Cash Discount Program & Surcharging?

Whereas a Cash Discount program will take off up to 4.0% of the sale if the purchase is made with cash, surcharging adds a fee (up to 4.0%) if a credit card is used in the sale. Surcharging only applies to credit cards, it cannot be applied on debit cards. As of the beginning of 2022, surcharging is legal in all 50 states except Connecticut and Massachusetts.

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