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True Cash Discount

Definitions

A "cash discount" is a reduction in price offered to customers who pay with cash, check, or other non-card payment methods. The listed price reflects the credit card or "non-cash" price, and the discount is applied at the time of payment for cash transactions. This method incentivizes cash payments and reduces processing costs for businesses.

Prices

  • Prices listed are the Credit Card or “Non-Cash” price on menus, online, and advertisements.
  • A discount is applied for cash payments at checkout.

Prices

  • Compliant with all Federal, State, and Local Laws. There are currently no restrictions on discounts.
  • Not applicable under MN “Junk Fees” law (HF3438).
  • Compliant with Card Brand Rules.

Offsetting Fees & Savings

  • Your Cash Discount can be any amount, though most customers offset up to 4%, matched to their program/processing fees.
  • Cash Discount offsets card costs up to 90%. Consider how tax & tips may be handled in your system.

Did you know? You can use the Menu Minder™ tool to adjust your pricing and best leverage Cash Discount.

 

  • Card Brands require a sign notifying customers at each Door/Entrance and at the Point-of-Sale.
  • Cash Discount, shown as a percentage or amount, must be disclosed anywhere items and prices are shown, such as menus, menu boards, online ordering, and advertisements.
  • Cash Discount is automatically applied in the point-of-sale by payment type.
  • Encouragement for use of Cash is recommended on the menu, receipt, and may be promoted online, on table tents, or in other promotions.

Receipts & Checks

  • Receipts must show the discount available before payment.
  • Receipts must show the discount applied after payment.
  • Receipts that show two totals, both Cash & Credit totals, are compliant and are a convenient way to help customers visually see their savings potential.

 

Example Receipt Message: “Pay with Cash & Save! We offer a 3.99% Cash Discount.”

Taxes & Tips

  • Cash Discount functions like all other discounts and does not have any special Sales Tax requirements.
  • Pricing adjustments for Cash Discounts may result in higher sales tax but are offset by corresponding expenses for payment processing costs, leaving the business's net taxable position effectively unchanged.
  • Credit Card Tip Fees* may be applied while using Cash Discount.
  • Tips are applied by the guest after a card payment is processed, meaning you will pay processing fees on tips.


*Some states allow “Credit Card Tip Fees”—where businesses charge processing costs to tipped employees. MN law as of 8/1/24 does not allow Credit Card Tip Fees.

References

 

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