Cash Discount: What Is It? Is Cash Discount Legal?

In today’s restaurants and cafes, paying with a card is always the preferred choice for customers. However, for every card transaction, restaurant owners or their customers have to bear a small fee known as “card processing fee” in addition to taxes. These fees typically range from 1-4% of the bill. When you add up these “small” fees each month, you’ll see a significant amount of money going to waste. So, if there’s a way to save on these “small” fees, why not give it a try?

In this article, we will explore an optimal way to increase profitability, attract customers, and build trust through a simple yet often overlooked strategy: Cash Discount.

What is Cash Discount, and is it legal to use it?

Cash Discount is a promotional method that restaurant owners can apply to encourage customers to pay with cash, thus avoiding an undesired card processing fee. Businesses utilize Cash Discount to expedite prompt payments from customers.

Cash Discount is not just a way to save money on card processing fees; it offers other benefits you should be aware of:

1. Improve Cash Flow: Customers paying early help you access cash sooner, enhancing your cash flow management.
2. Build Trust with Customers: Customers appreciate feeling like they’re receiving a special deal and are more likely to return.
3. Quick Access to Cash: Cash Discount provides you with ample cash to pay employees and make purchases. Additionally, it can lead to significant tax savings.

Let’s assume you own a popular pho restaurant in San Francisco. You decide to implement a Cash Discount program, offering a 2% discount to customers who pay with cash or a check after their meal. Your average customer spends around $50 per visit. If you have 100 customers per day, and 30% of them use Cash Discount, you could save $30 per day. Over a month, that adds up to $900 in savings. This money can be used to improve your restaurant, pay your staff, or invest in advertising.

Cash Discount is not illegal in the United States when implemented correctly and in compliance with relevant regulations. The most important aspect is transparency with your customers about your Cash Discount program. You can communicate this on the bill, the menu, or at the payment counter. However, keep in mind that regulations may vary by geographical location, so it’s best to seek advice from a trusted partner regarding your Cash Discount program.

If you want to make the most of Cash Discount in an easy and effective manner, consider using the services of Skipli. Skipli helps you manage your Cash Discount program conveniently and efficiently. By using Skipli, you can optimize your payment process, build trust with your customers, and save time and effort.

For more information on how Skipli can help you maximize your Cash Discount program, please contact us at the following phone number: 415-610-9521.