I am a fan of Cash Discounting when done right, but these signs that the ISOs and Processors keep coming up with don’t make any sense to me. Allow me to innumerate the ways that this sign seems wrong to me.
First, saying “non-cash charge” is the same as saying charge that only applies to cards. That is a surcharge not a discount. Anything you are “adding” to one type of transaction and not to the other types of transactions is a surcharge on those transactions. True Cash Discounting has nothing to do with surcharging. It starts with a price increase in everything, not a surcharge on card payments. This sign is the equivalent of a kindergarten teacher saying it is time for all “Non-Girls to go to gym.” This is exactly the same as saying it is time for “Boys to go to Gym” it is awkwardly worded, confusing.
Secondly, they mention giving a “4% immediate discount” when paying with cash. A discount, by definition must be based on some underlying number that is discounted. So, this begs the question, what amount is being discounted? If this is a discount off of the “non-cash price” then the math is clearly wrong. Let’s say we have a $100 transaction plus 4% is $104.00 (the non-cash price), if we discount $104.00 by 4%, we get $99.84 not $100. If instead the 4% discount is off of the sticker price, which is really what this sounds like, then the $100 goes to $96.00 and that is NOT what they are trying to say. These are the only two options that make any sense here and neither one adds up.
Long story short, this is a surcharge and NOT a cash discount. The proper wording would be something like this:
Customer Pricing Notice
“We have implemented a price increase on all items at the register of 4%”
As an incentive for customers, we now provide a discount to pay with cash of 3.84% and as an added convenience, all listed prices represent this cash discount.