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Cash Discount Program

Updated: Sep 2, 2021

Think about a customer’s purchase experience - in today’s technological landscape, there are dozens of different payment options to choose from. While new platforms such as digital wallets are on the rise, several customers still prefer to use credit cards to carry out their purchases.

While there’s a host of reasons for them doing so, from racking up rewards points to the sheer force of habit, credit card transactions can be a poor choice from the merchant’s point of view.

Is there a way to steer customers towards a less expensive solution? There sure is - and it’s called a cash discount program.

What Are Cash Discount Programs?

In simple terms, a cash discount program is a discount of generally up to 4%, that gets automatically applied to a customer’s bill if they choose your preferred methods of payment, such as cash or debit cards.

This leaves credit card users with full-priced payments, including credit card fees. Over time, a cash discount program can rope in more customers to use merchant-friendly transaction methods - saving you considerable sums of money in the long run.

The Legality Surrounding Cash Discount Programs

On the legal front, the most important thing to consider is 2010’s Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act - a massive financial system overhaul that took place in the wake of 2008’s infamous financial crisis.

The idea was simple - merchants and banks had long since been feuding over the subject of credit card processing fees, which were largely unregulated before 2010. The result was a massive win for merchants - banks had been making billions off these transactions for years.

The amendment also made cash discount programs legally accepted and specified that merchants needed to provide a full price upfront, which would then be discounted on payment.


While relying on cash discount programs can certainly benefit your business in the long run, it can also be detrimental to your credit card preferring customers. Before you take the plunge, remember to analyze your sales and determine whether your business has too large a percentage of credit card customers.

Loyent offers a Cash Discount Program to help small business owners eliminate costs associated with accepting credit card payments while offering a discount to cash and debit card payments. Connect with one of our payment advisors to learn more about our Cash Discount Program. We’re always happy to answer any questions you may have.


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