How to avoid payment processing fees

Nobody wants to pay credit card processing fees if they don’t have to and I’m here to tell you… you don’t have to!

As a business owner you work too hard for your money and deserve to keep as much of it as possible. The easiest way to accomplish this is by offering your customers a cash discount. Now before you go changing how you collect payment, there are a few things you’ll need to know first.

Let’s start with the basics…

What is a cash discount?
This is where you pass your credit card processing fees to your customer. If your customer pays with cash then they will be paying a lower dollar amount than the customer who has chosen to pay with their credit card.

Many businesses are switching to a cash discount and having great success!

What if my customers get mad?
It’s good to consider your customers, but you also need to make your business a priority. It’s time you change your mindset. Technically your customers are already paying your fees. Without them making purchases at your business you wouldn’t have money to pay the bills. See, it’s all about how you look at things.

Think about your absolute favorite restaurant. If they suddenly had a small fee for using your credit card, what would you do? Would you never eat there again? Probably not. You’d most likely bring cash the next time to receive your meal at a discounted price or not even think twice since the fee was so small. Your customers will have the same thought process.

I should also note that many of the credit card terminals that support the cash discount feature will also have the option to bypass. For example, if you have preferred customers where you absolutely don’t want to charge them the fee you can hit the bypass button and opt to cover the processing fee yourself.

Is it legal to offer a cash discount?
Yes. It is legal in all 50 states to offer a cash discount. To comply with federal regulations, you’ll need to have some kind of visible signage letting your customers know there is a cash discount option. You can make your own or your merchant services provider should be able to supply one for you.

How much should I give for a cash discount?
It is recommended to be set up with a 4% cash discount. This will ensure that all credit card processing fees will be covered, including AMEX Rewards which is known to have the highest rates of all credit cards.

To get started you could technically post a sign to comply with federal regulations and start adjusting for the cash discount, but to make your life even easier there are many terminals and POS systems that can do all of the math for you.

If you’re unsure if your current credit card terminal or POS system can handle a cash discount, we recommend asking your current provider. If they cannot support a cash discount at this time then we’re happy to get you started!


You work way too hard for your money to be throwing it away on credit card processing fees!

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