DETAILED VERSION & MORE EXPLANATION:
Example of a TRUE CASH DISCOUNTING PROGRAM:
Under a true cash discount program, the cash discount price must be less than the regular price, and the card price must be equal to (and not greater than) the regular price.
Where some cash discount programs have run into trouble with Visa is where the merchant imposes a service or convenience fee on all sales, and then provides a cash discount on the increased price. Since Visa doesn’t allow more than one program at a time this is not allowed:
The end result above is that the cash price is essentially equal to the regular price, and the card price is higher than the regular price. This is not a compliant cash discount program. In fact, Visa has found this to be a non-compliant surcharge program subject to fines. If the card price is higher than the regular price, Visa will consider this to be a surcharge.
When using dual pricing, best practice is to display the terms “Card Price” and “Cash Price”. We have seen many cash discount programs using dual pricing in which the merchant will display “credit price” and “cash price”. Visa believes that this naming convention could cause confusion among customers, who may view the use of a debit card as the same as using cash. Visa has stated that, for now, they will consider the display of “credit price” and “cash price” as compliant (so long as it is clear that the “credit price” is the merchant’s regular price). However, to avoid any such confusion, Visa believes that best practice, when using dual pricing, is for the merchant to display the terms “Card Price” and “Cash Price”, thereby leaving no doubt that only payment by cash will entitle the customer to the cash discount.
That was a TON of information- but we want to make sure you know what is going on behind the scenes of your payment acceptance program and we want to be sure and insulate you from UNNECESSARY FINES! Please let us know if you want to ADD a Surcharging program- there are always PROS and CONS ??
Looking forward to speaking with you and as always, we are happy to take care of any of your business friends and associates since EVERYONE needs a TRUSTWORTHY and diligent business partner to handle their payments.