What is Differential Pricing?
Differential pricing lets you charge slightly different amounts depending on how a customer pays, so you can offset your card processing fees. Material POS supports three programs:
- A fee is added to credit card payments.
- Customers paying with cash receive a discount.
- Every item has a cash price and a card price, and the customer chooses how to pay.
Only one program can be active at a time.
Which program is right for me?
Credit Card Surcharging | Dual Pricing | Cash Discounting | |
Applies to | Credit cards only (never debit or prepaid cards) | Credit and debit cards | Cash payments |
The price in your POS is | Your everyday price | The cash price | The card price |
What the customer sees on the receipt | A separate "Surcharge" line item | Just the price for how they paid — no fee or discount line | A separate discount line item |
Maximum percentage | 3% | No cap | No cap |
Where it's allowed | Prohibited or restricted in some states (for example CT, ME, and MA) | All 50 states | All 50 states |
Signage required | Yes — at the store entrance and register | Both prices shown on tags, or signage at the register | A simple disclosure such as "We offer a 4% discount for customers paying with cash" |
An example
Say an item costs $100 and your rate is 4% (3% for surcharging, the maximum allowed):
- Surcharging: the shelf price is $100. A cash customer pays $100. A credit card customer pays $103, with the $3 surcharge shown on the receipt.
- Dual Pricing: the shelf tag shows $100 cash / $104 card. A cash customer pays $100. A card customer pays $104.
- Cash Discounting: the shelf price is $104. A card customer pays $104. A cash customer gets a 4% discount and pays about $100, with the discount shown on the receipt.
How do I get started?
Differential pricing programs are configured together with your payment services representative — contact them to choose and enable the program that fits your store. Once enabled, you can view your current configuration in the POS app under Settings → Differential Pricing.
For details on each program, including compliance requirements, see the individual articles: