How are Cash Discount and Surcharge Different?
It is important to clarify the difference between the two cost saving programs that apply to the card present environment. Cash Discount is like Surcharging, but the two programs have some important regulatory differences, defined in the table below.
KEY BENEFITS DEFINED: Why do merchants want to implement one of these programs?
Both programs apply an extra line item defining a cost to customers paying by a non-cash method to help the merchant offset credit card processing fees that can be one, if not "THE," largest cost to do business. By implementing this cost in to the sale of goods and services, merchants can offset some or all of their card processing because they are able to pass along the cost to their non-cash paying customers.
KEY BENEFITS DEFINED: Why do merchants want to implement one of these programs?
Both programs apply an extra line item defining a cost to customers paying by a non-cash method to help the merchant offset credit card processing fees that can be one, if not "THE," largest cost to do business. By implementing this cost in to the sale of goods and services, merchants can offset some or all of their card processing because they are able to pass along the cost to their non-cash paying customers.
COMPARE SOLUTIONS
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DEFINING TERMS
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CASH DISCOUNT
(click to see Visa & MasterCard Rules) |
SURCHARGE
(click to see Visa Rules) |
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PERMITTED U.S. AREAS
PAYMENT TYPES
APPLICABLE BUSINESS MODELS
MISC. TERMS & CONDITIONS CUSTOMER NOTIFICATIONS
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U.S. and U.S. territories.
Cash discount is applied to any means of payment that is not classified as as "credit" card, i.e. cash, GPR card, Prepaid Card, eCheck.
Retail Card Present Locations only.
Merchant cannot set a discount that exceed 4% or the Merchant discount rate for the card transaction, whichever is lower. Cash Discount provides a discount for cash payments, as defined by the card associations, by giving a discount from the regular standard price, not marking up cost to non-cash transactions.
Clear signage with applicable discount language must be present at the entrance to the store and at the point-of-sale. Discount must also appear on the customer receipt as a separate line item.
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U.S. and U.S. territories only: Currently, 10 U.S. states have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
The ability to surcharge only applies to credit card purchases, and only under certain conditions. U.S. merchants cannot surcharge debit card or prepaid card purchases.
Retail Card Present Transactions and eCommerce
Account must be registered with applicable Card Networks 30 days prior to implementation.
The surcharge cannot be more than 4% of the transaction total, or your actual cost to process cards, whichever is lower. Clear disclosures that a merchant outlet assesses a surcharge on credit card purchases must be posted at the point-of-entry and point-of-sale. U.S. merchants that surcharge must disclose the surcharge dollar amount on every receipt.
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