The Cash Discount – Is it Right for Your Business?

For years, consumers, have been offered a lower price when buying gas if they paid with cash. The reason is very simple; the fees paid for processing a credit card take a very big chunk out of gas station profits who already have low profit margins. As a business owner I am sure you have given thought to how such a program would help your business, but it wasn’t offered, until now.

Under a cash discount program, a business offers a discount to customers who pay by cash or check, instead of with a credit or debit card. For customers paying by cash or check, the cost of the service or product they are buying is what is advertised. For all credit and debit card transactions, the business owner adds a customizable service fee to the sale amount to help maintain profit margins by covering processing fees.

While interest in this program has seen an uptick in adaptation, the program is not for everyone. Therefore, it is important to weigh the pros and cons of a cash discount program to see if it is right for your business. Here are some questions to consider asking yourself.

What is the cost of your average sale?

Assume the service fee being assessed on a credit or debit card transaction was 3.99% and your average transaction was $20. The service fee on a $20 sale would only amount to $.79. Conversely, if your average transaction was $200 the service fee would be $7.98. The question becomes what will customers be willing to pay for your product or service.

Do you have many repeat customers?

Customer loyalty is often the lifeline of a business. As a business owner, you will need to decide if your customer base is loyal enough to accept and understand the cash discount program or if it will bother them so much they will take their business elsewhere.

Is your product or service discretionary or mandatory?

As one would expect, the need for a product or service outweighs a desire. Therefore, are you selling a product or service that customers need or is it more of a discretionary product. The popularity of a business should not be underestimated. You may sell a product or service that, while it is discretionary, customers can’t live without and paying a service fee becomes irrelevant.

Are cash discounts common in your market?

Being first to market with a new program can have its challenges versus consumer familiarity with the program. Check around your market to see if any other business has adopted this new program. A business with very little competition may find it easier to adopt a cash discount program versus a more competitive business.

Is a cash surplus a good thing?

On its face, increasing cash payments appears to be a good problem to have as it helps to increase profits by reducing expenses associated with a credit or debit card payment. Looking deeper into it, excess cash will take time to count, require trips to the bank and can be stolen.

Cash Discounts ARE NOT Surcharges

As noted, a cash discount is when a business offers a discount to a customer who pays by cash or check. Conversely, a surcharge is when a business adds an additional fee to purchases made with a credit card. Surcharges are prohibited on debit card transactions and have other stipulations that need to be followed.

Inside the Clarity EPS Cash Discount

Our Cash Discount Program will help you offset your merchant service fees by offering your customers a cheaper way to pay. If you’re ready to take the next step, please contact us at

About Clarity EPS

Clarity EPS is a leading provider of payment processing and technology solutions, working with businesses of all sizes helping them process payments in a more efficient, secure and affordable manner. We assist businesses in eliminating the guesswork regarding payment processing and provide clear, concise and understandable solutions. Our core values are rooted in honesty, fairness and transparency.

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Contact: (561) 338-4446 | | Twitter: @clarityeps