If you operate a grocery or convenience store, it won’t come as a surprise that more consumers are using payment cards instead of cash. In 2018, for the first time in US history, cash fell from its top spot as the most commonly used form of payment. We aren’t (yet) becoming a cashless society — cash is still most commonly used for transactions of $10 or less — but for larger purchases, consumers are opting to use payment cards.
Small and medium-sized businesses (SMBs) in the grocery or convenience store space may consider this trend bad news: Every dip of an EMV card or tap of a contactless card or mobile wallet costs merchants money. Furthermore, in an industry where margins are razor-thin, added payment processing costs can be enough to put your business in the red.
Cover Costs with a Cash Discount Program
Fortunately, there is a way for you to recover credit card processing fees. A cash discount program allows you to add a service charge to all sales to cover credit card processing costs (often 4 percent), but remove that service charge from a purchase if your customer uses cash.
Unlike adding a credit card surcharges, which are prohibited in Texas and nine other US states and Puerto Rico, cash discount programs are legal. The Durbin Amendment (part of the Dodd-Frank Wall Street Reform and Consumer Protection Act) permits merchants to discount purchases when customers use cash.
There are regulatory requirements to offer a legal cash discount program:
- You need to display signage at the door and at the checkout that shows both the credit price and the discounted price for using cash.
- The receipt must clearly list the cash discount.
- Sales associates and cashiers must verbally communicate to all customers that there is a discount for cash before each transaction.
The Tech Side of Cash Discounts
There’s something else merchants need to manage a cash discount program: The right technology. If the cash discount feature of your point of sale (POS) system isn’t configured to reflect legal requirements, it could be considered a credit card surcharge, putting your Texas-based business in jeopardy.
The good news for GBT customers is that our POS systems include a cash discount program option that will allow you to offer the discount and meet all regulatory requirements. The team at GBT is also a resource for our customers to turn to with questions or for help with their cash discount programs.
More good news: With a cash discount program, your payment processing fees are mostly — or completely — covered. Even better news, by recouping the payment processing fees you now pay by establishing a cash discount program with a GBT POS system, our all-inclusive rental program, starting at $49 per month, can virtually pay for itself.
Your cash discount program will give you a new way to engage with your customers, letting each of them know there’s a discount if they pay with cash. And who doesn’t love a discount?