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True Cash Discount

DefinitionsCash Discount Definition

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 Creditcredit Cardcard or “Non-Cash”non-cash” price on menus, online, and advertisements.
  • A discount is applied for cash payments at checkout.

PricesLegal & Compliance

  • Compliant with all Federal,federal, State,state, and Locallocal Laws.laws. There are currently no restrictions on discounts.
  • Not applicable under MN “Junk Fees” law (HF3438)1.
  • Compliant with Cardcard Brandbrand Rules.rules.

Offsetting Fees & Savings

  • Your Cashcash Discountdiscount can be any amount, though most customers offset up to 4%, matched to their program/processing fees.
  • Cash Discountdiscount 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.

Disclosures: Signage, Checks, Receipts, and Online Store

  • Card Brandsbrands require a sign notifying customers at each Door/Entrancedoor/entrance and at the Point-point-of-Sale.sale1.
  • Cash Discount,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.advertisements1.
  • Cash Discountdiscount is automatically applied in the point-of-sale by payment type.
  • Encouragement for use of Cashcash 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 Cashcash & Creditcredit totals, are compliant and are a convenient way to help customers visually see their savings potential.

 

Example Receiptreceipt Message:message: “"Pay with Cashcash &and Save!save! We offer a 3.99% Cashcash Discount.”discount". 

Taxes &and Tips

  • Cash Discount functions like all other discounts and does not have any special Sales Tax requirements.
  • Pricing adjustments for Cashcash Discountsdiscounts 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 Cardcard Tiptip Fees*fees2 may be applied while using Cashcash Discount.discount.
  • Tips are applied by the guest after a card payment is processed, meaning you will pay processing fees on tips.


*Note: 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.Fees2.

References

  1. https://www.ag.state.mn.us/Price-Transparency/PriceTransparencyLaw_FAQ.pdf 
  2. https://www.dli.mn.gov/tips 

 

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If you have any questions with this guide or need other payment-related support, please email us at payments@ingageit.com.

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