How Small Business Can Save On Credit Card Processing Fees During COVID

The COVID-19 pandemic has been hard on businesses of all kinds, but especially on retail businesses. Even the essential services that must remain open to provide for basic needs like groceries are finding it harder to maintain their profit projections between increased operating costs, limitations on customer volume due to social distancing, and recommendations against unnecessary extra trips to the store each week. With less people traveling, gas stations are also hit hard. It’s no wonder many companies are looking for ways to cut costs. Luckily, there is a legal way to defer most of your credit card processing costs to customers, which can make a huge difference in your income.

Cash discount credit card processing is authorized under federal financial reforms passed during the last decade and legal in all 50 states, provided it is implemented correctly. Working with a credit card processor who makes a point of supporting these programs can make setting them up and maintaining compliance with the rules much easier, and many service providers offer new customers incentives like a free Clover Flex to make the cost of equipment negligible.

Setting Up Your Cash Discount Program

The most essential features of a cash discount program are clear communication about your policies and a strict adherence to the principle of providing a discount to cash customers. It might seem like a cash discount and a credit surcharge are the same, but there are key differences. For starters, not all states allow surcharge programs even though all states allow discounts for cash customers. That’s where communication comes in. All your prices need to be marked at the cost to customers using electronic payment methods like credit cards, with signage and employee messaging explaining the discount and making its terms clear.

The price the register rings up must be consistent with its labeling. Then, a discount can be applied to save cash customers money, and it will appear as such on the receipt, just like an in-house coupon or instant rebate. To implement this feature in your POS, you’ll need a system that supports cash discount programs like the Clover Station 2.0 or one of the other hardware models that shares its operating system.

How Much Can You Save?

A cash discount program that passes your average cost for transactions on to customers can save you as much as 95% of the total cost of your credit card processing. By passing those costs on to customers, you make your own profits easier to predict even when trends in customer payment preferences change. That makes it a lot easier to accurately project your annual income from previous data, and it also makes it easier for you to ensure those costs never put a crimp in your cash flow.

For more information about cash discount programs, you should talk to a credit card processor who supports them to learn about any other procedures you need to put in place before offering your customers a discount when they pay in cash. Even if you decide now isn’t the time for it, learning more never hurts.

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