Building A Healthy Bottom Line

Credit cards are increasingly becoming the preferred payment method for consumers, but more people paying with plastic means increased payment processing costs for business owners. For a healthier bottom line, many merchants are turning to merchant processing discount programs that include cash discounting and surcharging to help offset those fees.

To make these types of programs work, understanding the difference between the two and staying compliant is key.

Cash Discounting: A Cash Discount program is when a business offers a discounted rate to customers who pay using cash. Here’s how to stay compliant when offering a cash discount option to customers:

• Advertise the card price and offer a discount at the point of sale or display both the card price and cash price on the product or service and then charge the appropriate amount based on the payment method used by the customer.
• Display at the business entrance and at the point of sale that a Cash Discount program is available.

Surcharging: To Surcharge, the merchant adds a fee to the customer’s bill when paying by credit card. If you are surcharging customers, then specific standards must be followed to stay compliant. Some of these include:

• Not surcharging transactions when paying with a debit card.
• Surcharge amount cannot exceed 3% for transactions and the surcharge amount must be displayed at the business entrance.
• Display the surcharge amount on the receipt and at the point of sale that a surcharge is assessed on credit card purchases.

Unfortunately, not all merchant processors are selling compliant programs to business owners. These non-compliant programs can jeopardize a merchant’s credibility with customers while also creating risks of being fined by the card brands if reported by a consumer or secret shopper.

At VeraBank, we offer merchant service customers compliant and convenient solutions to help them get the most out of their payment acceptance program. Whether you are looking to start a merchant processing discount program or are interested in expanding what you currently have in place – we are here to help.

Want to learn more? Talk with a merchant services team member about a solution that fits your needs or explore other ways our merchant services can support your operations.