Cash Discount at Quick Glance
Is it Legal? YES!
A Cash Discount program is a method of implementing a service fee to all customers who pay with a credit card, while providing a discount to those who pay with cash. Cash Discount programs are legal in all 50 states per the Durbin Amendment, which states that businesses are permitted to offer a discount to customers as an incentive for paying with cash.
What is the Process?
1) We provide new proprietary terminals that are pre-programmed with the fee. This fee varies based on a weighted average of your current charges but 3.5% typically covers the lion share of the fees.
2) Signage will be provided for multiple points of notification. (Door, register and throughout dealership)
3) Training is provided by Platinum Dealer Services to allow an easy transition.
4) Get buy in from all departments participating
5) Have a “Champion” within the stores
How will my customers react?
We have researched this with multiple merchants and have found this to be an unbiased fear. In all cases, the credit card volume has remained consistent or even increased month over month, with reports from merchants that their customers disregard the convenience fee in 99.2% of transactions.
Unlike surcharge programs, cash discount programs are seen in a better light, and fare better with end consumers.
I don’t want to charge my customers the fee! It is important to keep in mind that you aren’t charging the fee – THE CREDIT CARD COMPANY IS! The law has changed and therefore businesses have a choice