The trend of cash discounts instead of credit cards

Cash discounts are a form being applied by many businesses to promote business and reduce payment costs for customers. Is this a new trend that can replace the popular credit card?

Nowadays, customers will often use credit or debit cards to apply for payment of products or services. Since then, cash payments are trending down sharply. However, paying in cash will have many advantages for business owners and customers. Let’s learn about those advantages right below.

The trend of cash discounts is being chosen by many businesses to attract customers

What are the advantages of cash discounts?

A cash discount is a form of incentive that a business owner or seller offers to a buyer in exchange for paying an invoice before the credit bank’s scheduled due date. When offering a cash discount, the seller will often reduce the amount paid by the buyer by a certain percentage or a certain amount. 

A cash discount is a deduction intended to induce business and customers to pay their bills within a certain period of time. Cash discounts also help sellers get their cash back sooner than swiping a credit card or not offering a discount.

Currently, nearly 90% of customers say price is the main factor influencing their purchasing decisions. However, businesses that offer credit card payments will charge a separate fee for each transaction and the fees are combined. Therefore, when offering a discount, the seller will directly reduce the product or service compared to the normal selling price.

Offering a discount to those who choose not to use a credit card to pay can benefit you and has several advantages. You can avoid the various costs that come with using cashless options and attract both old and new customers, which can be the key difference between paying with a credit card and cash discounts.

Cash discounts help businesses save costs

Why can sellers offer cash discounts?

Business owners, stores or sellers can apply a cash discount program to buyers to receive the following general benefits:

• Use cash sooner, if the business owner is experiencing a cash shortage.
• Avoid the cost and effort of invoicing customers.
• Cash can be reinvested in other business activities to help the store grow faster.
• Don’t spend much time managing electronic cash flow.
• Save costs incurred: swiping cards from POS machines…
• Attract customers with discount programs when paying in cash directly.

A friend’s share on the Facebook Group is as follows: “My store’s monthly efficiency rate is 2.7%, processing $10,000 costs me $270”. Cash discounts can bring many time benefits to businesses or store owners. Although it is not quick, this amount of cash can help businesses or store owners develop faster and save administrative costs.

For new businesses, the lack of cash for reinvestment is extremely important. In addition, paying in cash will help businesses manage their invoices quickly and without spending too much time controlling verification via credit or debit cards.

Most large and successful businesses ignore this. However, for a new business or store, trying to limit the costs of labor, materials, and machinery is extremely necessary. Another comment on the issue of other cash discounts is as follows: “Effective rate for boba tea is about 2.7 which is not too expensive”

A food store has just opened and offers a discount of 5% to 10% when customers pay in cash when enjoying dishes at the restaurant, which will easily attract more attention. Although it may seem like the business owner will lose some money, in reality, the business owner is saving a lot of money in administrative costs of invoicing, reporting unpaid amounts, and processing payments quickly portion or amount owed for any reason…

Therefore, in cases of new businesses starting out, the cash discount program is a good solution to support financial problems. At the same time, it will help develop the business better.

Cash discounts attract customers from reduced prices

Are cash discounts as attractive as credit cards?

Another comment on the issue of other cash discounts is as follows: “The effective rate is 2.7% which is cheap. Because all the beverage stores in America, Starbucks somewhere, they will charge the credit card fee form customer, it called credit card fee”

Customers will often be more interested in the price they pay than how they pay. Therefore, discounts or cash discounts will be a very attractive program if business owners know how to take advantage of them and exploit them effectively for a few days or during the discount season.

However, paying cash when there is a discount will also cause some customers to feel inconvenient when they habitually only use credit cards. With this form, business owners need to consider everything about price and percentage reduction when running the program to attract customers most effectively.

The benefits of using cash are many and cash discounts are a completely legal solution for businesses. While inconvenient for some customers, this is a great way to attract beginners to your physical store.

Above is information about whether to use cash discount solutions in the current trend of using credit/debit cards. Each choice has certain advantages. If you know how to organize and manage, the cash discount program will certainly be very attractive to customers and bring many benefits to businesses. If you are wondering about this type of payment, contact Skipli today for the best support and advice. 

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