Why Use Cash Discount Programs For Your Small Business
By Abdullah Product
Have you ever seen the signs that show one price for credit card purchases and a discounted rate for cash purchases? The proper name for these marketing efforts is a cash discount program,
which can appear to be very appealing to many customers. If you have considered promoting such a discount program for your small business that uses a Clover Station 2.0 system, but have not yet taken the plunge, then consider the many potential benefits.
1. Increase Working Capital
Every business requires working capital to maintain daily operations and deal with any potential hiccups along the way. By promoting a cash discount program, you automatically improve the availability of cash on hand, allowing you to operate more comfortably, without concerns over unforeseen risks.
2. Attract New Customers
A cash discount program may even attract bargain hunters to your shop. While the discount is only available because there are no credit card processing fees for cash, consumers see the option as a savings, which it is, compared to customers using the free clover flex to pay. While the hopeful size of new clients cannot be determined without more specific information about your business, you will most likely see an uptick in recurring and new clients.
3. Navigate Charge back Risks
Any business owner that has dealt with credit card processing for some time understands the risks associated with charge backs. If a customer is not used to shopping with you, it is possible that they will not recognize the charge on their account, at which point they may challenge the sale. While you may not lose the transaction, you will still have to pay fees and take time to prove the purchase is valid. With a cash discount program, you decrease the number of credit card sales, which helps to reduce your overall charge back risk.
4. Maintain Consistent Profits
By passing the processing fees onto the consumer, you maintain consistent profits for your business. Customers will likely be drawn to the cash option because of the perceived discount, and those who pay with a credit card will cover the expense of that option for the business owner. Therefore, your sales are your sales no matter what, and you earn the same for each type of purchase regardless of the payment options.
5. Eliminate Processing Responsibilities
Credit card processing is a responsibility and can be tricky for any business owner to navigate. However, by using a cash discount program, you eliminate your share of the financial burden. Consumers will have to pay for the luxury of a credit processing option, which is beneficial and fair to the small business owner. While some businesses may fear aggravating customers, the cash discount helps to mitigate any bad feelings.
A cash discount program is a beneficial option for most small businesses, and many customers will understand the reasoning behind it. Credit card usage is a privilege, and it is only right that the consumer pays for that privilege. A business owner does not deserve to lose profits to be more convenient. Contact a merchant service to discuss how to implement a cash discount program for your store.
