Payment Options that Delight Your Customers and You

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 a payment option 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 cost of goods can sometimes tie a retailer’s hands on their ability to pass on discounts or savings 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 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 transaction fees 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 payment option program offers customers a lower price on all items when they pay cash.

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 payment options 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. 

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 like they used to 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 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.