How Does Cash Discounting Work?
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Cash discount programs, like the one offered by Swipe4Free, were created so customers felt encouraged to use payment methods other than credit and debit cards. Cash and check are the two main payment alternatives, and when a customer pays with either, the cash discount is applied at the time of sale.
The foundation of the cash discount model is a small fee that’s charged when a customer purchases a product or service from a business that’s implementing a cash discount program. Established in 2015 by founders Leo Vartanov and Chris Benabu, Swipe4Free allows merchants to pass their credit card processing fees along to the customer by implementing a 4% non-cash charge to all customers who pay with credit/debit cards. However, when a customer pays with cash, a check, or a store-specific gift card, they avoid this fee. If a business is using a cash discount program, they are legally required to include the fee amount on customers’ receipts. Swipe4Free’s technology will calculate this on the spot for the business owner.
In exchange for their flat fee, Swipe4Free will cover all credit card charges for the merchant. This system eliminates back-end accounting as well as complex statements. In this way, cash discounting programs don’t just save businesses money but time as well.