True Cash Discount vs. Dual Pricing
Understand the Differences to Optimize Your Payment Processing
Which Method Is Best For You?
Cash discounting is a strategy that helps businesses offset credit card processing fees by encouraging customers to pay with cash. Upstate Merchant Advocates offers two primary methods: True Cash Discount and Dual Pricing. While both aim to reduce merchant costs, they differ in approach, compliance, and customer experience. Below, we break down the key differences to help you choose the best option for your business.
Comparison of True Cash Discount and Dual Pricing
| Aspect | True Cash Discount | Dual Pricing |
|---|---|---|
| Definition | A program where the listed price includes a service fee for card payments, which is removed for cash payments, effectively offering a discount for cash. | A pricing model displaying two prices at the point of sale: a lower cash price and a higher card price, reflecting the cost of processing fees. |
| Pricing Display | Lists a single price (including card processing fees). Cash payers receive a discount at checkout. | Shows both cash and card prices side-by-side on menus, signage, or receipts for transparency. |
| Customer Perception | Presented as a reward for paying with cash, which is often viewed positively as a savings opportunity. | Transparent but may feel like a penalty for card users, as the card price is higher than the cash price. |
| Compliance | Legal in all 50 states when properly disclosed. Requires clear signage and receipt details showing the discount for cash payments. | Also legal in all 50 states but requires displaying both prices clearly and adhering to card brand rules for transparency. |
| Implementation | Requires a POS system programmed to apply the discount automatically for cash payments. | Requires a more sophisticated POS setup to display and process dual prices accurately. |
| Example | A $100 item is listed as $104 (includes 4% fee). Cash payers pay $100, with the $4 fee removed at checkout. | A $100 item shows as $100 for cash and $104 for card. Customers choose based on payment method. |
| Best For | Businesses wanting a simple, customer-friendly way to incentivize cash payments without complex pricing displays. | Businesses prioritizing maximum transparency and willing to invest in advanced POS systems for dual price displays. |
Why Choose Upstate Merchant Advocates?
At Upstate Merchant Advocates, we specialize in helping local businesses implement compliant and effective cash discounting programs. Whether you choose True Cash Discount or Dual Pricing, we provide:
- Expert guidance on compliance with Visa, Mastercard, and state regulations.
- Customized POS solutions to streamline your payment process.
- Transparent signage and training to ensure a positive customer experience.
Let us help you reduce processing fees while keeping your customers happy. Contact us today to learn more!
Get Started with Upstate Merchant Advocates