5 Cash Discount Benefits Visa and Mastercard Are Hoping You Don’t Hear About

Cash discounts are illegal. They don’t work. They only hurt business owners.”

That’s what the big credit card companies want you to believe, and you know what, they almost got away with it. Almost.

What they don’t want you to know is that it is 100% legal to run a cash discount program. They don’t want you to know that a cash discount program can save small businesses, mom and pop shops, restaurants, and more hundreds in card processing fees. These card companies would much rather continue to overcharge merchants rather than let them in on the truth you’re about to hear.

Today we’re exposing the truth behind cash discounts – the truth that Visa and Mastercard would love for you to ignore. As you’ll soon learn, a well-constructed cash discount program will lower your costs, impress your customers, and increase your speed of checkout.

So without further ado, here are 5 benefits you’ll score when you set up your own cash discount program.

You’ll Collect More Cash

When you offer a cash discount, your customers will be more likely to pay you in cash in order to take advantage of that discount. Pretty straightforward, right?

Why is cash so valuable? Once you get it, you can use it; there’s no waiting for the money to transfer to your merchant account. Meanwhile, funds from credit card payments can take up to a couple days to deposit into your merchant account.

Cash is also not subject to credit card processing fees, which leads us to the second benefit of running a cash discount program.

You’ll Pay Less in Card Processing Fees

Every time someone pays a you with a credit card, the credit card companies and payment processors lump on additional fees that you’ll have to pay. However, as more customers pay you in cash, by default less will pay you with card. The amount you’ll owe in processing fees will gradually diminish.

Here’s the good news: you can recover a lot of your money by simply running a cash discount program. In a cash discount program, customers only receive a discount when paying in cash; anyone paying with a different form of payment (credit cards, debit cards, gift cards, etc) will pay non-discounted prices. If your customers do decide to continue paying with credit card, you’ll rack up extra revenue that can offset some of your processing fees.

Your Customers Will Appreciate You for It

Everybody loves a discount. The cash discount program itself is a great marketing tool for you and your business. Your customers will love knowing that you’re willing to offer them a discount. To them, you’re going out of your way to get them a deal – even if that deal is contingent on them paying you in cash.

But what about your card-paying customers? How do you explain the markup in price to them? Here’s one suggestion: remind them of the last time they went to a restaurant or store that only accepted cash, or that only accepted card for large purchases. Paying a small service fee is just a fraction of the trouble they’d go through if they had to pay a large bill to use their card or run to the ATM to get some hard cash.

You Don’t Have to Register with the Credit Card Companies

That’s right. No red tape. No annoying oversight. And still completely legal.

You do NOT need to register your cash discount program with Visa, Mastercard, Discover, American Express, or any other card company. Once you have the right signage and the right EMV terminal, you’re good to go!

You might be thinking, “Wait, I thought I heard somewhere that you need to enroll with the credit card companies to run a cash discount program. You sure about that?” That applies to surcharges – charging your customers extra for paying you with a credit or debit card – but it does NOT apply to cash discounts.

Surcharges are essentially when you overcharge your customers and take home the extra profit, which is illegal to do. Doing so can result in hefty fines and losing your card processing privileges. Cash discount programs, however, do NOT fall under this category because they’re considered deductions from your normal prices – not extra charges.

Your Customers Will Blaze Through Checkout

Ever paid for something with your card, only to regret it immediately afterwards? Maybe the EMV terminal glitched out as you were typing in your PIN number or the swipe reader could not read your card after five swipes. Annoying and slow, right?

Cash transactions, on the other hand, are much easier to complete. The customer hands you money, you pay them their change (if there is any to give them), and they’re on their way. As mentioned before, running a cash discount programs increases the number of cash transactions your business receives on average.

You’ll also need to use special cash discount program terminals, which will speed up credit card transactions. Though hard to find, these EMV terminals are reliable and powerful, meaning you’ll experience less hardware malfunctions and will move customers faster through line. They’re also programmed to print receipts that include a line for cash discounts, and this programming is even integrated into a couple full-blown POS systems.

 

Ready to see if your business qualifies to run a cash discount program? Click here to secure a free merchant statement analysis from one of our in-house experts.

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Effective Date: January 1, 2024

1. Scope

1.1. This Agreement applies to and governs Merchant’s access to and use of the Services, Hardware, and Professional Services ordered by Merchant under a Free Hardware and Software Order. The Services may include, but may not be limited to, (a) mobile and web applications for use by Merchant’s Employees and Customers to place orders and process Payments; (b) Point-of-sale hardware for use by Merchant’s Employees and Customers to place orders and process Payments; (c) processing of Payments and facilitating payment of Net Sales Proceeds to Merchant’s Bank Account; (d) providing Merchant with certain reporting on its sales and activities; and (e) working with Merchant with respect to any Customer inquiries related to Payments or placing orders, in each case under Merchant’s account with Quantum Electronic Payments.

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2.2. Free Smart Terminal Term. Merchants who Order a free Smart Terminal agree to enter into a Merchant Processing Agreement with Quantum Electronic Payments LLC for a minimum of 12-months.

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8.2. Dispute Resolution. Any dispute, claim, or controversy arising out of or relating in any way to this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, or in connection with Merchant’s use of the Services or our websites, shall be determined through confidential binding arbitration before one arbitrator. The confidential binding arbitration shall be administered by AAA pursuant to its Commercial Arbitration Rules, and the parties shall maintain the confidential nature of the arbitration proceeding and the award, including the hearing. Judgment on the award may be entered in any court having jurisdiction. Notwithstanding the foregoing, this Agreement shall not preclude either party from pursuing a court action in the state or federal courts for the sole purpose of obtaining a temporary restraining order or preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Agreement. In any event, any action or proceeding by Merchant against Quantum Electronic Payments LLC relating to any dispute must commence within one year after the cause of action accrues.

8.3. Prohibition of Class and Representative Actions and Non-Individualized Relief. Except where prohibited by Applicable Law and Rules, Merchant and Quantum Electronic Payments LLC agree that each may bring claims against the other only on an individual basis and not as plaintiff or class member in any purported class or representative action or proceeding. Unless both Merchant and Quantum Electronic Payments LLC agree otherwise, the arbitrator may not consolidate or join more than one person’s or party’s claims and may not otherwise preside over any form of a consolidated, representative, or class proceeding. Also, the arbitrator may award relief (including monetary, injunctive, and declaratory relief) only in favor of the individual party seeking relief and only to the extent necessary to provide relief necessitated by that party’s individual claim(s).

8.4. Pre-Arbitration Dispute Resolution. Quantum Electronic Payments LLC is always interested in resolving disputes amicably and efficiently, and most concerns can be resolved quickly and to the participant’s satisfaction by contacting Quantum Electronic Payments LLC’s support team. If such efforts prove unsuccessful, a party who intends to seek arbitration must first send to the other, by certified mail, a written notice of dispute (the “Notice of Dispute”). The Notice of Dispute must (i) describe the nature and basis of the claim or dispute and (ii) set forth the specific relief sought. If Quantum Electronic Payments LLC and Merchant do not resolve the claim or dispute, despite good faith attempts, within sixty (60) calendar days after the Notice of Dispute is received, Merchant or Quantum Electronic Payments LLC may commence an arbitration proceeding. During the arbitration, the amount of any settlement offer made by either party shall not be disclosed to the arbitrator until after the arbitrator determines the amount, if any, to which the parties are entitled.

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8.6. Entire Agreement. This Agreement, together with all exhibits, attachments, and addenda incorporated by reference herein and in any Orders and/or Quantum Electronic Payments LLC Master Services Agreement, represent the parties’ entire understanding relating to the Services and the subject matter hereof and thereof, and supersede any prior or contemporaneous, conflicting, or additional communications, whether written or verbal, and will control over any different or additional terms of any non-Quantum Electronic Payments LLC ordering document, and no terms included in any such purchase order or other non-Quantum Electronic Payments LLC ordering document will apply to the Services or Hardware. This Agreement may be amended only by written agreement signed by the parties, except (i) that Quantum Electronic Payments LLC may update this Merchant Agreement via a general notice to its customer base by providing reasonable notice and having Merchant check a box agreeing to such updated Merchant Agreement. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be invalid or unenforceable, if the essential terms and conditions of this Agreement for each party remain valid, binding, and enforceable, then such provision(s) will be deemed to be restated and construed to reflect the original intentions of the parties in accordance with Applicable Law and Rules with respect to the invalid or unenforceable provision(s), and with all other provisions of this Agreement remaining in full force and effect.

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