If you operate a small retail business, there’s a pretty good chance you operate on a razor-thin profit margin. Whether a neighborhood restaurant or an auto mechanic, your fixed overhead costs can leave you with a single-digit net profit margin. It’s not uncommon for restaurant profit margins to fall between 3% – 5%.

If you operate a small retail business, there’s also a pretty good chance you accept credit cards. And you don’t need to be told that their fees can eat up most or all of your profit. But what can you do? Afterall, you have to accept credit cards.

Yes, you do have to accept credit cards. But that doesn’t mean you can’t incentivize your customers to choose an alternative payment method that benefits you both. It’s called a Cash Discount program, and it’s just one more option a good credit card service provider can offer you to increase your bottom line.

Cash Discount programs are not credit card surcharges which add a fee to the credit card transaction. There are actually 11 states that have laws on the books that prohibit businesses from doing that. Those states are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.

A Cash Discount program works by applying a Service Fee at the register to ALL of your customer transactions and then offering a discount equal to the Service Fee if they pay by cash or in-store gift card. This can help offset some or all of your processing costs, which increases your bottom line.

The trick to taking advantage of a Cash Discount program is that the sales receipt must present the Service Fee in a clear manner. What you’ll need is Cash Discount technology at the point-of-sale that automatically determines the amount of Service Fee or Cash Discount, depending on the payment type.

A good credit card service provider can help you institute a Cash Discount program at your location. There are a few things you should look for when considering a Cash Discount program from your provider.

Legality Not all cash discount programs are built the same. Make sure the provider you choose has good standing with the Better Business Bureau and can provide clear evidence they adhere to all state, federal and card association laws.

Equipment Make sure the provider equipment accepts all card types, as well as mobile wallets and smart cards (i.e., EMV chip cards). Cash Discount technology does not work on all equipment brands.

Hidden Costs Beware of hidden or unnecessary fees. Cash Discount programs are straightforward to implement and shouldn’t require anything more than a nominal setup fee. And always insist on price transparency.

Collateral Material Cash Discount programs require more than just transaction equipment. You’ll need supporting materials such as in-store signage, training guides, videos or quick reference handouts. A good provider will offer all of these free of charge.

Customer Support Of course you’ll want a service provider who is there with you through the entire process. Make sure they’re on-hand to troubleshoot equipment, answer billing questions and help with additional training.

AppStar’s Cash Discount program is compliant in all 50 states. We have the equipment, collateral material and customer support to get you setup quickly. If you’re a current customer who’d like to take advantage of this program, or you’re a prospective customer who’d like to include the Cash Discount option with your merchant services, contact us. Let us show you how to keep more of your hard-earned money.