What is Cash Discount Processing?
Are you a small business owner wondering what cash discount processing is and if it is right for your business? If the answer is “yes,” you have come to the right place, as we break it down for you.
Credit card payment processing is becoming expensive for merchants. Thus, they are searching for avenues that somehow help reduce this expense.
Cash discount processing is one such solution that helps reduce your offsetting payment processing expense by incentivizing the customers when they pay via alternate methods.
Cash Discount Program
Cash discounts allow you to offer a reduced cost to the customers when they pay by check or cash instead of a debit or credit card.
Yet, as a merchant, you may ask, “but what is in it for me?” The answers are the advantages that come with it, and they are as follows:
As a business owner, it is one of the most desirable and obvious benefits for you when you adopt a cash discount program. It reduces, and in some scenarios, eliminates card-processing fees.
In simpler terms, deciding not to accept card payments will help you avoid the fees associated with the card payment process.
Increased Cash Flow
While modern-day customers prefer using plastic cards for payment, offering a discount can make them opt for a cash payment without any complaints. It will allow you to have instant access to cash flow while avoiding the extra-expense of card processing. Thus, it is a win-win situation for you.
As you reduce the frequency of card payments, it will directly reduce your chargebacks too. If your business has struggled with a high volume of chargebacks, opting for a
cash discount program could drastically reduce their cost.
Increased Traffic through Your Doors
It can work as a marketing trick to entice your customers as well, and who does not like saving money? While the cash discount you offer may be small, it is enough to attract more customers through your doors. Hence, it will increase the chances of additional purchasing by the customers.
Is It Right For You?
While cash discount processing offers many benefits, it may not be ideal for every merchant. Here are a few things you must consider before deciding to implement it.
What Payment Methods Do You Prefer?
Offering cash discounts will increase cash flow. But, evaluate if your business is OK to operate on an increase in cash payments instead of debit or credit cards.
For example, taking a lot of cash payments makes it more susceptible to get stolen by external burglars and in rare cases by the employees.
Additionally, if your product is a necessity, a customer would not mind using a payment method of your choice. But, if it is a discretionary product, certain buyers may walk away due to the inconvenience of having to get the cash to pay.
Evaluate Before Execution
Now that you know the basics of cash discount processing, you can evaluate your business needs. This way, you can safely implement this strategy for your daily payment processing operations.
This article was brought to you by Data One Merchant Services. We hope to win your business by exposing you to some of the ways you could be overpaying. We are a company you can trust, with a reputation of transparency and excellence.
For a free statement review, quote or consultation, contact us at: 800-818-0420.