Cash drawer

Payment Options that Delight Your Customers – and You

by | Oct 28, 2022

Credit cards, gift cards, reward cards, ACH payments, checks and good old-fashioned cash. Plastic clearly outweighs paper these days, and the adoption of plastic as method of payment has increased due to COVID and sheer convenience. Additionally, customers now expect the convenience of paying by credit card. However, credit card fees in combination with increase on the cost of goods can sometimes tie a retailer’s hands on their ability to pass discounts or savings on to their customers.

We know that discounts and rewards reinforce loyal behavior and it’s nice to be able to incentivize loyalty whenever possible. Sure, there are rewards programs and gift cards and a variety of tiered promotions – BOGOs, bounce back discounts, and more – but a simple way to offer a discount, at any time, is via a mechanism that enables cash discounting. If a customer pays cash, then a retailer can provide a savings on that purchase and communicate that savings to the customer via their receipt.

However, let’s not throw out the baby with the bathwater. There are considerations related to both card processing and cash discounting practices that are worth considering when it comes to customer expectations, behaviors, and preferences.

It’s important to not to create the perception that one type of payment option is favored over another since it may polarize an important segment of your customer base.

Opportunity and Cost Related to Cash vs. Credit

Credit Card Processing

Shoppers expect options and may spend more with the ability to use a credit card

Shoppers may get points from their card company and want to use a card

Retailers must actively monitor their rate and swipe fee with card company

Card fees should be considered when discounting products

Cash Discounting

No need to set up promotions

A nice surprise for those paying cash

No transaction fees for the retailer

Cash-backed payment does apply

So a customer can still use plastic for convenience if it’s a bank card, backed by cash.

What is a cash discount program?

Simply stated, a cash discount program offers customers a lower price on all items when they pay cash. Those who choose to pay with credit card pay a slightly higher price that covers the cost of processing those payments.

Benefits of a cash discount program

Cash transactions eliminate processing fees. The average processing fee in 2022 is anywhere from 1.3% to 3.5% of the sale depending on the card. Reducing the number of payment card sales results in lower prices for cash customers and no processing fees for retailers.

Cash discount programs provide customers with options. When stores offer cash discount programs, they give customers options. Consumers can get a discount on all items if they choose to pay cash, or they can pay for the processing fees if they choose the convenience of using a payment card. Some consumers prefer to use credit cards because of rewards programs associated with their use.

Cash discount programs are simple for both merchants and customers. Customers know what they’re paying for a product because they’re laying out cash at the checkout counter. They don’t have to watch their account balance to the same way they balance their checkbooks.

For stores, the payments are instantaneous. No waiting for the transaction to process. No chance of a chargeback. It gives the stores more operating cash on hand and keeps profit margins constant.


Payment processing can be challenging for small, independent businesses. Electronic payment processing through a point-of-sale system tends to increase customer satisfaction by simplifying and speeding up the checkout process. Cash discount programs, though, provide both customers and stores an option to save money and eliminate the fees associated with card purchases.

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