Cash discount programs for credit card processing are one of the most popular trends in the industry right now. That’s partly due to rising awareness of them as an option, but it’s also being fueled by financial pressures put on companies during times of economic uncertainty. The best way to keep your income steady and your customers happy is to trim your overhead. In fact, often it’s the only way to maintain your profits without raising your prices overall. Luckily, a good cash discount program can recover almost all the costs associated with accepting electronic payment options, so you can keep your overhead in check without trimming staff or extra services that set your business apart.
Implementing a Program
Federal financial reforms after the 2008 credit crisis paved the way for cash discount programs by explicitly authorizing them in all 50 states provided they followed the guidelines laid forth in the law. That means marking prices at the cost for card customers and others paying with electronic methods. It also means communicating clearly that there is a discount for cash payments, as well as what that discount is and which goods it applies to. Some merchants choose to offer a cash discount for all merchandise, others limit it to certain types of transactions, like fuel costs.
Working with a processor that supports the program is the key to making it easy to implement, because the right processor will offer you a processing agreement that helps you by offering transparent pricing you can easily adjust on the fly to reflect the real costs of every transaction, so your discounts are accurate enough to virtually eliminate your processing costs. Current-generation POS systems like the Clover Station 2.0 are usually designed to provide these programs with just a little configuration, so you might also need an equipment upgrade to get started.
Communicating With Customers
Some businesses worry that customers will perceive a new cash discount program negatively, especially if it will require them to raise their prices pre-discount to comply with the program’s requirements. The key to encouraging customer buy-in is communicating about your reasons to your customers. Often, if a regular hears that the choices were either an across-the-board price increase or a new cash discount program, that’s enough to encourage enthusiastic participation. After all, anyone who wants the discount can just pay with cash.
Cash Discount Programs and Mobile Businesses
You don’t need a static storefront to enjoy the benefits that come with cash discount processing programs. As long as you have the signage and communication required by law, you can put a program into place for your mobile business. You’ll still need a mobile POS that is set up to provide the discount for customers when they pay cash, but luckily many of today’s most competitively priced credit card processors offer a free Clover Flex when you switch to their service. That can reduce your operating costs even more by hooking you up with the equipment you need, without having to finance it. You won’t believe how easy it is to set up or to keep running once your program is in place.