If you are a business person, you would be aware of the popularity of credit cards and debit cards as the most used payment methods nowadays. But, you would be surprised to know that as of 2018, up to 70% of consumers admitted to using cash for all or most of their purchases. It indicates a huge number of cash payers. Although, that does not encourages you to make your business cash only.

If you launch a cash discount scheme, your customers will have the option to pay in the way of their choice and it won’t cost you extra.

Advantages of Cash Discounts

A lot of companies offer discounts on cash, because they are quite significant for business, as they save the cash payment fees. Here are five marvelous benefits of implementing a cash discount scheme in your business:

1. Reduce or Eliminate Fees

Major attraction associated with this practice is the saving of credit card processing costs. The companies which handle the processing of credit cards are given the name of merchant service providers (MSPs). Such companies charge fees in order to cover their services, to pay credit card and bank associations, which take most of the fees that you have paid. But, a cash discount program exempts you from all such fees.

2. Keep Profit Margins Consistent

A business should also maintain its consistent boundaries to manage the budget rightly and to make significant financial decisions in the future. There is no fee involved in cash transactions, but there are a number of fees in case of card transactions, which mostly depend on the card type. Using a cash discount plan, you are able to eliminate all those. Alternatively, it enables you to keep consistent margins in all transactions.

3. Fascinate Bargain Hunters

Everyone loves a discount. Especially, bargain hunters are fascinated by such offers; once they use your services at a discount, they would love to come back in order to take advantage of the discount again.

4. Increase Cash on Hand

Your customers paying in cash make it easy for you keep the cash on hand for business purpose. Whenever you are in need of cash for buying of equipment or for providing change to the customers, it always helps to keep cash handy. Although, if there is a competent MSP, you can get your funds from the credit card transactions timely.

5. Reduce Chargeback Risks

The fees we discussed come automatically with the transactions made by credit cards. But, sometimes, they may lead to some additional fees. In case a customer takes a look on their credit card statement or receipt and they feel a problem somewhere in it, it requires you to pay fees and contact a number of parties involving the issue. The issue will be investigated and matter will be settled with customer. Such chargebacks happen only in credit card payments, so by encouraging cash payments, the risk of chargebacks can be reduced.

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