Credit card processing has become increasingly expensive for merchants, especially small businesses who have tighter budgets and may not bring in as much revenue as their larger competitors. By accepting credit cards, businesses face the financial burden of interchange fees, otherwise recognized as swipe fees. On average, swipe fees range from 1-4% and over time, can significantly turn profits into a loss for smaller businesses.
Cash Discount Processing - is a unique payments approach that is fully integrated into SoftTouch POS. There is no processing fees bill at the end of the month. Fees are taken out daily, so the money you collect in fees never gets deposited into your bank. You keep the full $ amount of items sold + sales tax. We set a flat processing rate of 3.5%. This covers and includes all monthly fixed fees, statement fees, batch fees, or any other charges that you would normally be billed by the processor. We also set the system to collect and pay sales tax on the fee. Per states' laws, you cannot separate the cost of doing business from your item sales. This means that sales tax must be collected and paid on the extra fee. Customers have been surprised by a sales tax audit and find that they have to pay sales tax on the program. We do it correctly to keep you protected.
SoftTouch POS will print a detailed customer receipt with a total of goods and services purchased with the flat rate included, and a lower cash discounted total below that does not include the flat rate processing fee if the patron pays cash. At the end of the month you have continued to take credit card payments but you pay no fees!
Our Cash Discount POS solution also prepares comprehensive daily, monthly, quarterly, and annual reporting. It takes into account taxes and tips in conjunction with non Cash Adj. fees on Credit Card transactions, giving you a proper legal accounting solution. Other basic auto surcharge type solutions create unnecessary and time consuming manual accounting adjustments backing out the surcharges from tips and taxes.
Unlike surcharge programs, cash discount programs are seen in a better light, and fare better with the end-consumers. There has been a misconception that a cash discount program would prohibit sales if a customer does not carry cash. We have also paid close attention to the effect it can have on tips. By sending the check to the table with a clear choice of credit or cash price, there is a buffer period between the time the customer learns about the cash discount and when they add the tip. Surcharge programs do not function this way and the customer may learn about the fee added at the same time they add the tip.
To implement a truly successful cash discount program, a merchant must
overcome the confusion and questions consumers and employees have
surrounding a cash discount program.
At a minimum, a merchant is required to provide at least one point of notification prior to sale that there is a service fee applied to all sales and a discount given if a cash payment is made. Multiple points of notification are recommended – such as at the door, register of the store and throughout the establishment if needed.
Additionally, reference to the program must be made on the bottom of the check and/or receipt.
Credit card rates are charged in 2 ways. There is a % of the total transaction and there is a fixed $ amount per swipe. To make the program fair for all merchants, we have chosen 3.5%. That is in the middle of the lowest rate of 3% and the max rate of 4%. A restaurant with a higher ticket average may be able to cover all fees with the 3% rate but the coffee shop down the street will not be able to do that and must set a rate higher because their average ticket $ amount is much lower. This low ticket amount does not overcome the fixed $ amount per transaction like a restaurant with a high ticket $ amount. To keep the program fair and eliminate customer confusion or the notion that one location may be trying to profit from the program because their rate is higher, we set a middle fair rate for everyone.