As credit card processing reseller businesses become more expensive, many are looking to reduce these costs. One of these options is to launch a discount program that encourages customers to pay cash or checks while paying the cost of processing payments for business owners.
Even with credit card processing reseller growing market, the fees associated with using credit cards still dominate many merchants. The solution to their crises may seem like a cash-back program.
It’s a simple, cost-effective way to lower processing costs at the end of each month and send more money and more with happy customers. However, you need to distinguish between back cash rebates and additional fees prohibited in some US states.
What is a Cash Discount Program?
A cash discount program works by providing cash and credit costs to its customers. If customers pay cash, they get a lower price. If they pay by credit card, they will pay a slightly higher price, which will include your processing fees. Included Customers who pay cash receive discounts, mainly because they receive lower cash costs. The end results? You eliminate the cost of processing your business credit card and encourage your customers to use cash, giving them the option to pay with credit. A cash discount is also called the term early payment discount.
What’s it offer to the merchant?
- Reduced fee
A very obvious benefit for merchants who are introducing a discount program, reducing or eliminating card processing fees is the easy way to avoid paying for the services by choosing not to process the card.
- Increase in cash payments
While many customers enjoy using the card, no doubt offering more discounts increases the additional cash payments. This means faster access to funds for merchants when processing time is up. Not to mention, reducing card payments in favour of cash reduces the possibility of fraud.
- Reduction in chargeback
Fees are calculated according to the same principle as the frequency of card payments decreases. If you are struggling with chargebacks, opting for a discount program can reduce the risk at the current rate.
- Get the people to the door
As we all know, there are trade mark-ups, so customers want to save as much money as possible by offering a “sell” discount on marginal costs. And even if the discount is only today, it is enough to take people to court, increasing the possibility of additional purchases.
How Does Cash Discount work?
It offers cashback discounts to all customers who choose to pay in cash instead of credit or debit cards. Customers who choose to pay by credit card pay the indicated amount because the processing price is created in the product’s price. This allows the business owner to receive full payment from the customer and should not be burdened with credit card processing fees. Credit card processing resellers do their job effectively with a lot more experience.