Urgent: Update Cash Discount/ Dual Pricing Signage - Avoid Fines
- USMPS
- May 19
- 3 min read
In today's business environment, where credit card processing fees can significantly reduce profitability, many merchants are exploring strategies to mitigate these costs.
These programs save businesses $100's if not $1,000's monthly, and if you use those programs you are aware how much it saves you.
Two popular approaches are dual pricing and cash discounts. While both aim to incentivize cash payments, they operate slightly differently and require careful attention to signage and payment network rules to avoid penalties.
Understanding Dual Pricing and Cash Discounts
• Dual Pricing: This model explicitly displays two prices for an item: a lower price for cash payments and a slightly higher price for card payments. The card price typically includes an adjustment to cover the processing fees. The customer sees both options upfront on the terminal or point of sale and can choose their preferred payment method.
• Cash Discount: This approach lists a standard price, but offers a discount to customers who pay with cash. The advertised price is usually the card price, and the cash discount is applied at the point of sale.
Both methods are legally permissible in all 50 states, as they are viewed as incentivizing a particular payment method rather than surcharging others. However, compliance with payment network rules, particularly those of Visa and Mastercard, and clear signage are crucial.
The Importance of Correct Signage
Clear and conspicuous signage is paramount for a successful and compliant dual pricing or cash discount program. The purpose of the signage is to inform customers about the pricing structure before they reach the point of sale, ensuring transparency and avoiding any perception of hidden fees.
For dual pricing and cash discount effective signage should be prominently placed at the entrance of the business and at each point of sale.
See this image as acceptable signage for the Dual Pricing/ Cash Discount program, print it out and post at the entrance and at each sales point, or contact us and we can provide signage to you.
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Visa and Mastercard Rules to Avoid Fines
Visa and Mastercard have specific rules regarding dual pricing and cash discounts to ensure fair and transparent practices. Failing to adhere to these rules can result in fines and penalties.
Key considerations include:
• Transparency: Regardless of whether you use dual pricing or a cash discount, you must clearly communicate • Displaying Prices: If you only display one price, it must be the card price. The cash discount is then applied at the register. Dual pricing requires the display of both prices.
Mastercard also permits cash discounts. Their rules emphasize clear disclosure to the consumer.
Avoiding Fines
To avoid fines from Visa and Mastercard, ensure that: • Your signage is clear, visible, and accurately reflects your pricing policy. • Your point-of-sale system correctly applies the cash discount or displays both prices in a dual pricing model. • Your staff is trained to explain the pricing to customers.
By implementing dual pricing or cash discounts with correct signage adherence to Visa and Mastercard rules, businesses can effectively manage processing fees while maintaining transparency with their customers.
For free advice on how to follow all guidelines and implement a compliant dual pricing or cash discount strategy for your business, please ask us!
We can help you understand the specific requirements and best practices to ensure you avoid fines and optimize your pricing strategy.
What specific questions do you have about implementing dual pricing or cash discounts in your business?
Ask Ken Givens 512-848-1069 ***** You can depend on us to steer you straight and to be available to help answer questions if you are approached by competitors offering ‘too good to be true’ deals.
Want to set up time to talk? https://calendly.com/usmerchantpaymentsolutions/15min
Thank you!
Ken Givens Director of Sales U.S. Merchant Payment Solutions LLC
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