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The Advantages of Dual Pricing Credit Card Processing

Dual pricing means merchants don't pay payment processing fees, but it is not the only reason to incorporate the program in your business. Dual pricing is more transparent. Items have two prices, a cash price and a non-cash price.


Operating costs continue to rise, and many business owners are concerned about managing costs and maintaining a profitable business. One of the largest cost centers many owners face is the increasing cost of accepting credit cards. But every business knows that customers prefer the ease of using cards, so business have to accept them.

Businesses are responding to these rising costs in a number of ways. Enrolling in a dual pricing program will help reduce those processing costs while benefiting both you and your customers.


What is Dual Pricing?

First, what is dual pricing? In terms of cash vs. credit card pricing, dual pricing refers to charging different prices depending on whether the customer pays with cash or a credit card. It involves charging a standard payment price when customers pay with cash and a higher price when a card payment is chosen.


You don’t have to raise your prices.

One-way businesses have been combating rising operational costs is to raise prices across the board. While that is an option, it may not close the gap in profitability. If inflation has already caused you to raise some or all of your prices, it may not be the time to do so again. Dual pricing allows you to keep prices the same, charging customers your product price when they pay with cash and only charging an elevated price for guests paying with cards.


Your profitability is fixed.

When you offer dual pricing, your profitability remains the same no matter how your customers pay. This means no fluctuations in processing costs based on card type, bank, rewards program, or anything else. Dual Pricing allows you to factor in processing program costs when setting standard retail pricing and takes the guesswork out of calculating discounts at the time of cash payment. This approach helps you maintain the profitability you intend more consistently because you’re not paying fluctuating costs.


Customers have a choice in how they pay.

Unlike raising your prices for all your customers to cover your processing costs, dual pricing programs allow you to let your guests decide the payment option that makes the most sense for them. More budget-conscious guests will appreciate the opportunity to pay a lower price when using cash, while perhaps rewards or convenience-minded customers will decide that using a card is still the right choice for them.


Processing costs are factored into pricing.

By applying a dual pricing approach, you ensure that the additional expenses incurred from credit card transactions are offset by the transactions the customers who choose to use that payment method, rather than spreading the costs across all customers when factoring them into the general pricing structure. This way, customers who pay with cash or other non-credit card methods are not indirectly subsidizing credit card processing fees.


Prices are displayed seamlessly.

There are many ways merchants are implementing cash discounting or credit card surcharging, often with a manual process of applying fees. But with the right merchant services provider, dual pricing programs are integrated so they seamlessly display both standard card and discounted cash prices on payment terminals. This feature ensures that pricing is set at the right fee structure every time, presenting customers with clear and transparent pricing options to choose from.


Customers appreciate transparency.

Transparency goes a long way to building consumer confidence and when you implement a dual pricing strategy with automatic calculations presented for customers, they appreciate the transparency in your approach. Rather than having awkward conversations about surcharging, staff can simply explain that they have several payment options to choose from, which they will see and choose on the customer facing display. When presented with clear side-by-side options, it’s easy for customers to see how much each option will be, so they can make a decision about the payment method that makes the most sense.


Offset nearly all of the costs associated with processing credit cards.

Perhaps the most important benefit of a dual pricing program is that you can offset nearly all of the costs associated with credit card payment processing. Processing costs are factored in when standard pricing is set. Proper transaction routing and robust purchase and fee reporting give you complete peace of mind. It’s that simple.


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