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Avoid the maze of confusing fees and ridiculous rates with the leading Cash Discount program

What Is Cash Discount The Take Charge Cash Discount program was developed using the legal and regulatory authority provided under the Durbin Amendment. The Durbin Amendment is Section 920 in the Dodd-Frank Wall Street Reform and Consumer Act, which is part of the broader Financial Regulation Reform and Consumer Act passed by the Senate in May 2010.


The Durbin Amendment specifically states, merchants can impose a $10 minimum on credit card transactions and can offer cash discounts at the register for cash or debit purchases. This was previously banned in VISA® and Mastercard® merchant agreements. The Dodd-Frank Bill & The Durbin Amendment are federal law and supersede state & local laws and Visa/ Mastercard regulation.


How Does It Work

The concept is based on the cash discount being built into the current price of the merchant’s goods and services. In other words, the posted price for an item in the merchant’s place of business is what the customer will pay if they are using cash or cash equivalent (check, ACH, etc). If the customer is using a credit card, they do not qualify for the cash discount, thereby increasing the cost back to the “original” amount. That amount will be based on what you quote the merchant, generally 3.75%. Here’s an example: Mary goes into a boutique to buy a new handbag. As Mary enters the store, there is signage posted at the storefront that notifies her that the business participates in a cash discount program.

Mary finds the handbag she is interested in and the price tag lists $100. When Mary takes the handbag to the checkout to pay for it, there is another sign displayed that notifies her that there is a cash discount built into the pricing of all goods and services. What this means is that if Mary chooses to pay with a card, she will not qualify for the $100 listed price because that is the cash price.

Mary pulls out the Visa Rewards card because she wants her perks and isn’t worried about a few extra dollars. When the cashier runs the card through the payment terminal, it automatically adds the non-cash adjustment of 3.75% on to the transaction. Now, instead of paying cash and getting the handbag for $100, Mary chooses to use her card and will pay $103.75.


How Does a Merchant Benefit? A merchant benefits from Flat Rate pricing that is offset by the adjustment made at the point of sale.


For the merchant in our example, they would be priced at a Flat Rate of 3.75%. This rate encompasses all discount rates, transaction fees, statements fees, etc. This 3.75% is offset by our customer, Mary, paying 3.75% more for using her card. This mean that the merchant will pay virtually nothing in processing fees on a monthly basis.

Merchants will only pay any monthly or ancillary fees that are associated with the merchant account. This may include any lease, equipment rental, licensing or programming fees.

So, a merchant could go from paying hundreds, even thousands of dollars per month in fees, to paying a low flat fee, or a very small percentage of what the normal fees are.

Compliance

When a merchant chooses to participate in the Take Charge Cash Discount Program there are a few things they need to do to remain in compliance:

There must be signage displayed at the point of sale and (for brick & mortar) the entrance to the business disclosing that the merchant offers a discount to customers paying with cash. When a Take Charge account is established, a welcome kit will be deployed, and it will include the signage necessary to be compliant while participating in the program.

There must be a separate line item on the customer’s receipt that displays the difference in cost. The Take Charge software automatically adds this separate line to the receipt so the customer can distinguish between the cost of the good or service and the adjustment made as a result of choosing to use their card.


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