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  2. Cash Discount and Surcharging

What is the difference between Cash Discount and Surcharge?

While both strategies help offset the cost of accepting credit cards, they operate in opposite directions in terms of pricing. They also both have different Rules and Regulations that must be followed.

Cash Discount is when you post credit card prices at a premium to offset credit card processing costs and offer a discount on that prices for customers who pay with cash. 

 

Surcharge is a fee added to a credit card transaction to offset credit card processing costs. The customer pays more than the advertised price for paying with a credit card. If you're adding a fee at the register, whether you call it a "Non-cash Adjustment" or a "Non-cash fee", it is a surcharge.

 

CASH DISCOUNT vs SURCHARGING (5)

 

Rules and Regulations

 

Cash Discount

 

 

Surcharging

Proper Signage

Signage must be posted at the Point of Sale clearly stating Cash Discount is available. Posted price must reflect the credit card price. 

Download Signage Here

 

Proper Signage

Surcharge fees must be disclosed at the Point of Sale and Point of sale, both in store and online. 

Download Signage Here

Determine the %

Industry has adopted between 3-4% to cover card processing costs 

 

Determine the %

As of 2023, Visa capped surcharges at 3% with other card brands likely to follow suit 

Receipts

Ensure cash discount is clearly identified on receipt

 

Receipts

Ensure surcharge is clearly identified on receipt

Card Brand Registration

No registration required

 

Card Brand Registration

Some card brands require 30 days advanced notice before you begin surcharging

Card Type Limitations

No card type limitations

 

Card Type Limitations

Cannot be applied to: 

  • Signature Debit
  • Prepaid
  • PIN debit / EBT
Legal in all 50 states  

Not Legal in All 50 states

As of 2023 surcharge is not legal in Connecticut, Maine, Massachusetts,  and Oklahoma

 

Penalties

If either of these programs are implemented without following the card brand regulations, they run the risk of being fined by the card brands. 

Visa Violation Process 

 

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