What is Cash Discounting?
Cash Discounting allows you to offer a discount for cash payments from customers, in order to incentivize cash transactions.
As an example, let’s say that a product is priced at $50 and you have enabled a 3% cash discount:
- If the customer buys the item and chooses to pay via cash, they get a discount of $1.50, so they end up paying just $48.50.
- If the customer buys the item and chooses to pay via credit card, they pay the full $50 price.
This might be preferable to adding a credit card surcharge because customers might feel like they are not being penalized for using credit cards. In this case, you might want to increase all your base prices across the board by 3% to help offset credit card processing fees.
In Practice
- Many merchants choose to raise all their prices by the amount of the cash discount. Then, at checkout, they offer that same 4 % as a discount for cash-paying customers.
- For example, an item that used to be $20 would have its price increased to $20.80. If a customer chooses to pay with cash, they would pay the original $20.
Compliance
- Your posted and advertised prices must be your regular (card) prices. If you advertise a lower “cash price” and add a fee for card payments at checkout, card brands treat the program as a surcharge instead of a discount — which has much stricter rules.
- On the receipt, the cash discount appears as a separate discount line item, and the posted price must match the receipt amount.
- A simple statement such as “We offer a 4 % discount for customers paying with cash” is typically sufficient to disclose the program.
How do I enable Cash Discounting?
Cash discounting is configured for you by your payment services representative — contact them to get set up. Once enabled, you can view your cash discount percentage in the POS app under Settings → Differential Pricing.
Entering prices as cash prices
Once cash discounting is enabled, the product pricing page shows a Cash price pill under the Retail price and Sale price fields, so you can think in cash prices while Material keeps your card prices correct:
- As you enter a price, the pill shows the cash price customers will pay after the discount.
- You can also click the pill and type the cash price you want to charge — the price field is filled in with the correct card price automatically, so cash-paying customers land exactly on your number.
- For example, with a 3.5% cash discount, entering a $50.00 cash price stores a $51.81 retail price:
For a comparison of cash discounting with our other differential pricing programs, see Differential Pricing.