How much profit are you losing to credit card fees? Transaction fees for credit card sales can be costly for small business owners, so it’s important to compare your options. Find out how a Clover credit card machine and a cash discount program can help you reduce or eliminate your monthly credit card fees while still allowing you to accept credit card sales.
How a Cash Discount Program Works
A cash discount program became legal in all 50 states in 2011. Most credit card processing systems require between 2% and 4% of the transaction cost in order to process the transaction. This can really add up for small business owners. One way to eliminate this charge is to pass it on to your customers by adding the percentage to the cost of your products.
Adding between 2% and 4% to the cost of each item allows you to cover this cost. If a customer chooses to pay with cash, then you can subtract the credit card processing fee. Because the actual cost of the item already has the service fee included, your credit card customers won’t feel as if they are being penalized for using a card. This leaves both cash and credit card customers feeling good about the transaction.
Cash Discount vs. Credit Card Surcharge
A common alternative to a cash discount program is a credit card surcharge one. While the basic process still allows you to accept credit cards with no monthly fee, the way you go about it can have a major impact on how your customers’ feel about it.
A credit card surcharge adds an additional charge to the transaction at the time of ordering. Instead of paying the listed price, they must pay an additional 2-to-4% of the total. This can leave customers feeling frustrated, particularly if they weren’t aware of the charge before ordering.
Benefits of a Cash Discount Program
A cash discount program offers the best of both worlds. Instead of adding to the cost of your items or denying customers using credit cards to make purchases, a cash discount program encourages a sale without sacrificing a portion of the profits.
While credit card surcharge programs are legal in most states, cash discount programs are legal in all 50 states. This gives you the freedom to use it in any business without worrying about legal concerns if you decide to relocate to a new state or expand your business.
Use a cash discount program to set a positive tone for the issue of credit card charges. Instead of communicating additional fees and restrictions for your customers, offer them discounts and other advantages. A cash discount is a far more positive way to frame the situation than to talk about surcharges, fines and fees.
Reduce Your Monthly Fees Today
Compare other ways to reduce or remove your credit card monthly fees today. Find out how a Clover contactless payment system gives you an affordable POS system. Reduce your monthly fees and keep your business moving forward with the help of a powerful, convenient payment system.