4 Ways Cash Discounting Benefits Both You And Your Merchants
In a society where fewer and fewer people are carrying around cash on a daily basis, offering cash discounting programs may seem antiquated or a waste of time to some merchants. When there are so many easier ways to pay, from credit and debit cards to just tapping a phone on a card reader, it’s understandable why the old ways of paying with cash (and having to wait for change) have fallen behind. Because of this, even though cash discounting programs are something that has been around for a long time, they aren’t utilized as often as they used to be.
Often, small business owners lose a lot of money each year to credit card processing fees. When margins on some items they sell are already not very high, these fees can really eat into profits. Many merchants wish their customers would pay with cash more, but realize in the year 2019 that this is just not the norm. But perhaps there are ways it can start to become more common.
Merchants care most about one thing:
No one should pay the fees
Practices such as having credit card minimums or charging fees for using a credit card have been long-used, but neither merchants or their customers like this method. For merchants in New York, back in January a law was passed allowing them to pass along credit card surcharges to their customers. While this is helpful to those in New York and elsewhere that it’s legal who want to utilize it (currently 6 states ban this practice), it’s still something that makes your business less appealing. What if a merchant would like to avoid paying these fees altogether? It would be best to eliminate the fee from occurring in the first place, so neither the merchant or customer has to pay for it. And the best way to do this is with an easy-to-use cash discounting program.
Everyone loves a discount
When you offer cash discounting to customers, they feel like they’re getting a sale on the items they’re looking to buy anyway. And who doesn’t love a discount? Letting customers know they’ll save a percentage off their total simply by changing their payment method will encourage them to shop at your location as opposed to the business down the street that has the same prices but doesn’t offer that discount. You’ll create buzz around your business and customers will remember that you’re the best place to go when they need that prescription, new dress, or a fun night out.
Keeping your merchants happy
Merchants care the most about their bottom line. One of the best ways for you as an ISO or agent to keep them happy is obvious: to lower their monthly costs. The easiest and fastest way to achieve this is to decrease the number of credit card processing fees they’re charged monthly, and the only way for that to happen without them losing business is by implementing a cash discount program. It’s more money in their pockets for little to no work on their part, and fewer phone calls to you every month complaining about their bill.
Cash in hand is well… cash in hand! When merchants accept credit cards for purchases by their customers, it can sometimes take days to get that money reflected in their bank accounts. Even when merchants utilize a next-day payment processor, there is still a small waiting period while their money is on their way to them. When cash is accepted for payment, the money is in their hands instantly with zero processing time.
These are just a few ways in which everyone wins with a cash discounting program being implemented in a retail or restaurant business. The benefits of these programs are endless and are a key tool in your arsenal as an ISO or agent. While you may know these benefits, it’s important to sit down with your merchants and convey this to them as well. They’ll thank you for it long-term.
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