Term – Dual Pricing Program a.k.a surcharge program, cash discount program
Summary – Dual pricing programs allow merchants to set different prices based on whether a customer opts to pay with a card or cash. In most states, a merchant is able to pass the fees imposed by the card associations while keeping their cash price the same. However, some merchants opt for a cash discount program which enables them to reduce the cash price and still add a surcharge for card transactions.
Some business owners refuse to implement dual pricing programs in fear that their customers will choose another business. However, how often have you seen gas station customers pay at the pump? They can walk inside and pay with cash to save 3% or so, and still choose the convenience of paying with their card. Or is there something more up their sleeve?
There happens to be a major motivating factor that many fail to remember. Credit card rewards have been offered as high as 10x. So if you are getting 10% cash back and being charged 3.5%, the customer is still up 6.5% on the transaction. Savvy business owners realize that footing the bill for their customers high reward cards simply isn’t necessary.
If a customer is against paying the surcharge, they can by via cash. That is the beauty of the program, it is not a price increase. Merchants are merely passing the processing fees they are being charged to the customer.
If you have any questions on how Eliminate Card Fees can help you eliminate all credit card processing fees, give us a call to learn more at 877-624-8043Back to Terms
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