If your business is classified as high-risk, it can be difficult to find a merchant services provider that will work with you. Many providers view businesses that are seen as being “risky to work with” as too much of a liability, which can lead to increased fees and unwanted restrictions. However, there are providers like Xccept that offer cash discount processing specifically designed for high-risk businesses. This type of processing can save you money on each transaction while also helping you maintain a good relationship with your customers.
Cash discount processing is a service that can be extremely beneficial to high-risk businesses. This type of processing allows businesses to receive discounts on the total purchase price when they pay with cash. By taking advantage of this service, businesses can save money and improve their cash flow.
What Are High-Risk Businesses?
There are a number of businesses that are considered to be high-risk based on the usual factors:
- Businesses that sell products or services considered to be controversial
- Businesses that operate in industries that are known for having a high rate of chargebacks
- Businesses that have been previously charged with credit card fraud
- New businesses that do not have an established history or track record
Some of the most common examples of these industries include:
- Adult entertainment
- Gaming
- Online dating
- Nutraceuticals
- Pharmaceuticals
- Vaporizers
- E-cigarettes
- CBD products
- Weight loss products or services
- Subscription services
- Telemarketing
- Travel
- Timeshares
- Bail bonds
- Collection agencies
Any business that operates in one of these industries will likely be considered high-risk by most merchant services providers. This means that they will be subjected to higher fees, more restrictions, and greater scrutiny when it comes to credit card processing. However, cash discount processing can help offset some of the costs associated with high-risk businesses.
How Does Cash Discount Processing Work?
In many places that offer cash discounts, the regular price or posted price for each item is the price for paying with a credit card. Any payment method other than cash, like a credit card, keeps the price of goods the same to cover the cost of processing credit cards.
On the other hand, when a customer pays with cash, they are typically given a “discount” on the total purchase price. The amount of the discount will vary depending on the business, but it is typically between 2-4%. For example, if a customer owes $100 but pays in cash for a 4% discount, they would receive a $4 discount, making the total purchase price $96.
There are a few things to keep in mind when it comes to cash discount processing:
- The discount must be clearly advertised to customers.
- The cash transactions must be logged into the terminal to track the discounts and apply them correctly.
- The business must have a cash drawer to store the cash.
If these requirements are met, cash discount processing can be a great way to save money on credit card processing fees. In addition, it can also help build goodwill with customers by providing them with an incentive of receiving a discount on their purchases.
What’s the Difference Between Cash Discount Processing and Surcharging?
Cash discount processing is sometimes confused with surcharging as they seem similar in concept. However, there are a few key differences when defining the two. Surcharging is when a business adds a fee to the total purchase price for customers who pay with a credit or debit card. This fee is typically passed on to the customer in the form of a percentage of the total purchase price, and it is added on at the time of sale.
For example, if a customer buys something for $100 and pays with a card, the business may add a 3% surcharge on the bill, which would increase the cost of the goods or service to $103. The customer would then be responsible for paying this amount.
Surcharging is not allowed in some states, so businesses should check their local laws before implementing this practice. Additionally, businesses that do surcharge must disclose this to customers in a clear and conspicuous manner.
Cash discount processing, on the other hand, is completely legal in all states. It simply involves adjusting your prices to include the credit card processing cost and giving customers a discount for paying with cash.
Essentially, no one likes being “surcharged” for extra fees, but everyone loves a discount. Consequently, customers love businesses that offer cash discount processing.
Advantages of Cash Discount Processing
There are a number of advantages that cash discount processing can offer high-risk businesses, such as:
- Reduced fees: When you process cash payments, you can avoid paying the standard credit card processing fees. This can lead to significant savings, especially for businesses with high transaction volume.
- Improved cash flow: By reducing your overall processing costs, you can improve your cash flow and keep more money in your business.
- Customer satisfaction: While many customers prefer to pay with cards nowadays, there are still some who prefer cash. Offering a cash discount can help you attract and retain these customers. Additionally, it shows that you’re willing to work with customers who may not have access to credit or debit cards.
How to Get Started With Cash Discount Processing
If you’re interested in cash discount processing for your high-risk business, there are a few things you need to do to get started:
- Check local laws: As mentioned earlier, always be sure to check your local laws to verify any updates about cash discount processing and surcharging for your type of business.
- Advertise the discount: Customers need to be aware of the cash discount in order for it to be effective. Make sure to advertise the discount prominently so that customers know about it.
- Log cash transactions: In order to track the discounts and apply them correctly, businesses must log all cash transactions into their terminals.
Finally, you must choose the right merchant services company. Not all merchant services companies offer cash discount processing with easy programs and simple integrations. This is where Xccept comes in.
Why Choose Xccept?
With Xccept, businesses no longer have to shoulder the burden of varying credit card processing fees. Take advantage of cash discount processing with our zero-fees program, which is designed to save you money and give your customers the discounts they crave.
What’s in it for us? We make our revenue from the markup we charge your credit card-paying customers for the cost of credit card processing. In turn, this allows you to give your cash-paying customers discounts without us ever taking a percentage of your sales.
With Xccept, there are absolutely no terminal fees, no processing fees, no PCI fees, no annual fees, and no long-term contracts. We go by month-to-month, and since we take care of paying all of your fees to credit card processors like Visa or Mastercard, your monthly statement from us will always be $0. We are fully PCI-compliant and meet state and federal regulations, so you can rest assured that cash discount processing with us is always legal.
Ready to get started? Contact us today to learn more about how cash discount processing can benefit your high-risk business.
