FREQUENTLY ASKED QUESTIONS ABOUT CASH DISCOUNT

How Does Cash Discounting Work?

How Does Cash Discounting Work?

How Does Cash Discounting Work?

 This program is a way for merchants to offset most of the cost of their processing fees. Merchants implement a service fee that applies to all products and then gives a discount to customers who choose to pay with cash. Customers who pay with cash will avoid the additional fees and all others will see a line item added to their receipt. To start using Cash Discount, merchants must post signage alerting customers about the fee applied to all items, and also update their terminal application to add the appropriate fee to transactions.

Is This Program Legal?

How Does Cash Discounting Work?

How Does Cash Discounting Work?


Yes, cash discounting is legal in all 50 states. The Dodd-Frank act prohibits payment card networks “from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards. 


 


Is Cash Discount New?

How Does Cash Discounting Work?

Will My Customers Be Upset And Go somewhere else?


No, businesses have been offering discounts for those who pay with cash for years. In the United States, a lower posted price for cash is very common.  In fact it’s been around for decades in Europe and is used across the US in gas stations where a cash discount is offered at the pump. 


Gas Stations have been using this program in the US for over 15 years. Many national, state and local governments including the DMV, Secretary of State, Post Offices, Schools, Courts, and the IRS implement a Service Fee. 

Will My Customers Be Upset And Go somewhere else?

Will My Customers Be Upset And Go somewhere else?

Will My Customers Be Upset And Go somewhere else?

No, offering a discount to customers who choose to pay with cash is a completely different situation than surcharging when it comes to the card brands’ regulations. While surcharging is allowed under certain parameters laid out by the card associations, business owners are able to price their products and offer discounts on those products at will. Cash discounting is the business owner exercising that freedom. Surcharging is adding a charge only for customers who use a credit card, and is not currently allowed in ten states. 

Will Cash Discount Eliminate All My Fees?

Will My Customers Be Upset And Go somewhere else?

Will Cash Discount Eliminate All My Fees?

Just about.  Some merchants will still see some small fees on their bills due to the variations in Interchange prices, but most will see a drastic (95-100%) reduction in their processing bill. We can set up your account on a daily or monthly discount structure, meaning we will take your fees out every day or at the end of the month. 


Your monthly statement will show a near-zero cost of processing with the money for the goods and services you sold showing up in your deposit. You will also have a small monthly subscription fee to cover your participation in the program which covers 24-hour technical service, free paper, and your statement. 

Why Don’t I Just Implement The Program Myself?

What If I Don’t Like The Cash Discount Progam After A Few Days, Weeks, Or Months?

What If I Don’t Like The Cash Discount Progam After A Few Days, Weeks, Or Months?

When a fee is incorrectly applied to a transaction, any additional fee charged to those consumers using a credit card is labeled a Surcharge and that is expressly forbidden by Visa, Mastercard, and the processing provider without taking very specific steps. The way around this process is to allow us to automate a Cash Discount Program for you which is different than the Surcharge. 


In the Cash Discount Program you post signage stating that all consumers will now be paying a 4% Service Fee, however for those paying with cash, the fee will be waived. We will automate your equipment so that this fee is automatically added for those customers using any method of payment other than cash (essentially credit cards). 


While this may sound very similar to the Surcharge Program, it is distinctly different in that everyone is paying an increased fee, but those who pay with cash receive a discount, whereas with the Surcharge program, you are specifically stating that those paying with credit cards will pay more. Most importantly it is aligned with the rules of Visa and Mastercard.


Additionally, you are forbidden by Visa, Mastercard, and the Processor’s rules to profit on a credit card transaction, which could happen if you accidentally charged more than you were being charged by the processor. By utilizing the Cash Discount program, we establish proper pricing for you to ensure you stay within all stated guidelines.

What If I Don’t Like The Cash Discount Progam After A Few Days, Weeks, Or Months?

What If I Don’t Like The Cash Discount Progam After A Few Days, Weeks, Or Months?

What If I Don’t Like The Cash Discount Progam After A Few Days, Weeks, Or Months?

If for any reason you wish to discontinue the Cash Discount Program, we will immediately change you back to traditional Interchange Pricing. 


You will still save a lot of money on your credit card fees by utilizing the Eternal Global Wealth's low rate program, which saves business owners on average 72% over the fees your previous processor was charging. 

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CREDIT OR DEBIT CARD SURCHARGES STATUTES

(2) A discount offered by a seller or lessor for the purpose of inducing payment by cash, check, or other means not involving the use of a seller or lender credit card shall not constitute a finance charge if such discount is offered to all prospective buyers and its availability is disclosed to all prospective buyers clearly and conspicuously in accordance with regulations of the administrator. 


STATES WHERE  SURCHARGING IS ILLEGAL

 The states with no-surcharge laws are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, according to the National Conference of State Legislatures. 

Visa and MasterCard agree to settle swipe fee class action for $6.2 billion

 

15 U.S. Code § 1666f

 (a) Cash discounts


With respect to credit [1] card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay by cash, check, or similar means rather than use a credit card.


(b) Finance charge


With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, checks, or other means not involving the use of an open-end credit plan or a credit card shall not constitute a finance charge as determined under section 1605 of this title if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously.



(Pub. L. 90–321, title I, § 167, as added Pub. L. 93–495, title III, § 306, Oct. 28, 1974, 88 Stat. 1515; amended Pub. L. 94–222, § 3(c)(1), Feb. 27, 1976, 90 Stat. 197; Pub. L. 97–25, title I, § 101, July 27, 1981, 95 Stat. 144.) 


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