1. What is a cash discount program in credit card processing and how does it work?
A cash discount program in credit card processing revolves around a pricing model that allows businesses to offset merchant service fees by applying a small customer service fee on transactions, typically credit card transactions. If a customer pays with cash instead of a credit card, this fee is waived, hence providing a “discount”. The logic behind it is to incentivize cash payments which can save the business from having to pay often high credit card processing fees.
2. What is a Royalty Cash Discount and why should businesses consider using it?
Royalty Cash Discount is a program designed to virtually eliminate the cost of accepting credit cards by passing on a small fee only to customers who choose to pay with a card. This is a unique program that fully complies with Visa, Mastercard, state, and federal guidelines. It provides businesses with an affordable solution to offset merchant service charges, effectively reducing overhead costs, and thereby increasing profit margins.
3. How does a business implement a cash discount program?
Implementation involves revising the pricing policy and clearly communicating this to the customer. The business will need to update their point-of-sale (POS) systems or use a compatible terminal that is equipped to handle cash discount programs, like those provided by Royalty Cash Discount. In-store signage must be displayed to inform customers of the price difference between cash and credit card payments. Prices posted can either be the cash price or credit price as long as the business is clear about their policy.
4. What is the appeal of no fees to customers and businesses in cash discount?
From a customer’s perspective, paying with cash to avoid an additional fee helps save money, which can enhance their overall shopping experience. For businesses, the appeal lies in the potential for significant cost savings. With a cash discount program, businesses can save on the costs incurred every time a customer pays with a credit card.
5. How is the trend of passing the fee to the customer being perceived across various businesses?
As a response to increasing credit card processing fees, more businesses are adopting cash discount programs. This trend is gaining acceptance across various sectors including retail, foodservice, and even professional services. While it is crucial to educate consumers about the change, most customers understand the concept and appreciate the transparency. Therefore, if communicated effectively, adopting a cash discount program is both perceived positively and can lead to financial benefits.
6. What are royalty checks in the context of a cash discount program?
In the context of a cash discount program, royalty checks can be seen as a return on investment. Royalty Cash Discount provides a unique patent-pending program that offers a monthly Royalty check back for businesses. This monthly check is a percentage of the credit card processing fees generated from the customers, making it a lucrative return to the business.
