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Can your Company Offer the Cash Discount Program?

The short answer is yes! Our program is available in all 50 states. Listed below are several legal rulings and opinions as well as the Card Association positions.

Text from Durbin Amendment


‘‘(2)(A) IN GENERAL.—A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person to provide a discount or in- kind incentive for payment by the use of cash, checks, debit cards, or credit cards to the extent that—”...

‘(iii) to the extent required by Federal law and applicable State law, such discount or in- kind incentive is offered to all prospective buyers and disclosed clearly and conspicuously.

‘‘(B) LAWFUL DISCOUNTS.—For purposes of this paragraph, the network may not penalize any person for the providing of a discount that is in compliance with Federal law and applicable State law.

New York 2nd Circuit Court of Appeals Definition of Sec. 518 (Sept. 29, 2015) “In practice...lets stores offer “discounts” to cash customers”

Visa Core Rules and Visa Product and Service Rules 15 April 2015 Visa Public CR-53 © 2014—2015 Visa. All Rights

Reserved. 1.5.4.2 Honoring All Visa Cards.


”Merchants may attempt to steer customers who initially present a Visa Card to an alternative method of payment, such as by providing discounts for cash“..

MasterCard Rules 5.11.2

...“Charges to Cardholders A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments. “...

Discover - Merchant Operating Regulations R11.1 - Section 2.5, Surcharges and Discounts ... New terms permit you to offer discounts at the point-of-sale as provided in the Dodd- Frank Act. You may offer differential discounts depending on the method of payment (e.g., credit, debit, cash or check), but such discounts may not differentiate based on issuer or payment network.”...

American Express Merchants Policy Guide Section 3.2

1. Will I lose customers if I implement a cash discount program?

We're happy to say that after three years of selling this program we have found the advantages far outweigh the disadvantages.

Customers understand that paying with a credit card has a cost, but it also has its benefits. Despite the opportunity to save by paying with cash, over 98% of customers still choose to pay with credit.

Implementing a cash discount program the right way should not cause you to lose customers. 

2. Is the percentage added to the sale set at 4% or can it be adjusted?

The standard cash discount is 4%.

 

Under special circumstances or for larger accounts we will consider other options.

If it is determined that a lower cash discount percentage is required, we will need current processing statements and management approval.

3. Can a flat fee instead of 4% be charged on each sale?

Most flat fee programs do not eliminate all card processing fees.

In order to eliminate all of your processing fees, we do not offer a flat fee program.

4. Are there any per-transaction fees?

With our cash discount program, no transaction fees will ever be incurred.

 

Questions about starting a cash discount program with PPSG Processing:

5. If I start this program do I have to sign a long-term contract?

Unlike most processing companies that lock you into a confusing contract, there is never a contract with PPSG.

All of our agreements are always month to month.

6. If I am currently in a contract, can I still use your service?

Yes, however, you may have to pay a contract cancellation fee to your current company, but the savings from a cash discount program far outweigh any cancellation cost.

7. If I don't like this program, can I switch back to traditional processing?

Although this rarely happens, we would be happy to switch you back to traditional processing free of charge if you are not satisfied with cash discount processing. 

 

Additionally, we will lower your rates compared to your current provider.

 

We offer this security for all merchants.

8. Do I have any monthly fees for processing credit cards with PPSG?

You will never pay for processing cards. Exceptions to this rule included chargebacks and tips.

We do not include the 4% service fee on tips.

9. Are credit card disputes handled any differently than with my current processor?

Disputes are handled just the same.

You will still incur chargeback fees if you lose your dispute.

10. How long does it take to get started?

Once we receive the required paperwork, you can get started in 7 to 10 business days.

 

Questions about qualifying for a cash discount:

11. For the cash discount program, is there a limit to the size of the transaction (dollar amount)?

There is no limit on the dollar amount of any transaction.

12. Does the 4% service fee apply to all card types?

The service fee applies to all cards except EBT cards.

EBT cards do not incur the fee, but they also do not incur any processing fees. They are always free.

 

13. My company does large volume, can the cash discount program be tailored to my business?

Yes, the cash discount of 4% can be adjusted for large volume merchants, with management approval.

14. Is there any minimum transaction volume required to use your service?

Yes, a minimum average of $3k per month is required or $100k per year if it is a seasonal business.

 

Questions about the legality of a cash discount program:

15. What can I do if surcharging is not legal in my state?

A cash discount is different from a surcharge.

Unlike surcharging, cash discount processing is legal in all 50 states, so you should have no problem adopting it for your business.

16. Why can't I just add 4% to each transaction and stay with my current processor?

Adding 4% to each transaction would be a surcharge.  Surcharging is against the card brand's policies unless the account is set up to accept them properly.

Our cash discount program is approved by all card brands.

We also provide all the required signage for an approved cash discount program.

17. Am I provided with a "Point of Sale" sign to communicate that there is a 4% customer service fee?

In order for a cash discount program to be implemented legally, you must provide a customer notification of the service fee at all entrances and points of sale.

To help you successfully establish a cash discount program, we will provide you with all required signage. 

 

Questions on operating a cash discount program in your business:

18. How fast can I get my money once the transaction is processed?

Next day funding is available if the terminal is batched out by 9 PM EST.

19. What does the credit card receipt read that is seen by the customer at the time of purchase?

The receipt reads, “Non Cash Adjustment” on the line that adds the service fee.

20. Will the purchase on my customer’s credit card statement appear as it currently does? Will it list my business's name?

Yes, your customer's credit card statement will still appear as it currently does, and your business's name will be listed on it.

 

Questions on the credit card terminal:

21. Is the new terminal easy to set up once I receive it?

In order to make implementing cash discounts as effortless as possible, all of our terminals come pre-programmed and ready to accept payments.

 

Instructions on how to use the terminal are also included.

If you're still having trouble or want to run a test transaction, feel free to call our friendly customer support line.

22. Do I have to batch my terminal, or does it do it automatically?

We can program the terminal to auto-batch at your requested time for all non-tipped transactions.

We can set up businesses that require a tip line by special request.

 

23. Can I tie your service to my POS cash register system or do I have to use your terminal?

You must use the terminal, but we have thousands of customers that still use their current POS system with our terminal solution.

24. If I have a current credit card processing terminal, can it be programmed to work with your service?

Terminal reprogramming is currently unavailable. Our cash discount program requires the use of our terminal.

25. How much does it cost the merchant to buy a terminal?

We don't play the leasing or high-market game with terminal sales.  We believe if we treat you right, you'll stay with us for the long term.

 

We are so confident that you will love our service that we will give all businesses--of any size--a free terminal!

 

We only ask that if you decide to leave our service, you return the terminal to us.

26. What kind of warranty comes with the credit card processing terminal?

The terminal comes with a one-year manufactures warranty.

You can learn more about credit card processing and a cash discount program by reading Our Services.

 

Still can't find what you're looking for?  Feel free to contact us with any questions you may have.

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