Cash discounting decreases merchant service fees. As a business owner, you are constantly trying to lower your amount of fees. While credit card consolidation can improve your financial state, lowering fees is still beneficial. Cash discounting is a great way to do so. However, do not confuse it with surcharging. Surcharging entails charging customers who pay with credit cards an additional fee. Cash discounting works in a different way. Instead of up-charging credit payments, the program provides those who pay cash or check with a discount. Read on to discover how to implement a cash discounting program legally.
Post Apparent Signage
When starting a cash discounting program, you must post apparent signage to keep your program legal. These signs are not meant for advertising campaigns. They are to be taken very seriously. By law, you are required to show customers what exactly your program is offering. Create signs to portray all of the details of your cash discounting program. Card brands have specific rules regarding what the signs must include. Look into your specific requirements. Once you have created the signs, post them throughout your store. They should be posted in very visible places. Appropriate places include at the store entrance and on the cash registers. Post apparent signage to refrain from finding yourself in any legal trouble.
Use Transparent Language
Within those signs, you are obligated to use easy-to-read wording. Although this may seem like an obvious point, many business owners find themselves in legal disputes due to unclear language. You must differentiate a surcharge from a cash discount on your signs. Explain the process that will take place as well. In the event of language-caused confusion, credit card companies could view their client’s purchase as a surcharge. That is where legal trouble occurs. It is also where the knowledge you have to finance your business becomes useless. Use words that are very clear and state all appropriate information to implement a cash discounting program legally.
List Charges On Receipts
Another factor to keep in mind when applying a cash discount is the receipt. When enforcing a cash discounting program, charge every customer with the same service fee. This means that every customer who pays with cash and is deserving of the discount, should leave with a similar receipt as a credit-payer. The only difference should be a discount shown after the service fee. Apply the discount after the service fee. Follow this order of processing to ensure that you have proof of proper cash discounting.
Do Not Offer Debit Cards Discounts
Do not offer cash discounts to debit card users. Debit cards are not the same as credit cards. While this is true, they are also not the same as cash. In the event of cash discounting a debit card or surcharging one, your business could find itself in a legal dispute. Processors will consider the mistake as “non-compliance”. They, therefore, have the power to shut down accounts. On top of the legality issue, you could also lose business if word gets out that you ran a cash discounting program illegally. Stick to cash and check discounting to keep your program legal.
As a way to keep your employees from making cash discounting mistakes, program your terminals. Today’s technology allows you to program your registers to automatically charge and discount. If an employee does not properly check out a customer while you are running a cash discounting program, processors may view transactions as surcharges. Surcharging credit card holders is illegal in certain states. Therefore, programming terminals is a preventative procedure worth considering. Eliminate unnecessary checkout errors with programmed terminals and maintain a legal cash discounting program.
You could greatly benefit from implementing a cash discounting program. However, you must keep the implementation legal. To do so, post apparent signage. Use clear language in the signage. List all charges on every receipt. Ensure all employees and customers understand that those who pay with debit cards will not be discounted. Lastly, program your terminals so you do not have to rely on employees to not make mistakes. You now know how to properly enforce a cash discounting program.