Who Pays Sales Tax with Cash Discounting? Who should pay the sales tax on service fees? Here are some tips to keep your merchants compliant with...
Why Merchants Get FIRED UP About Cash Discounting
I recently noticed a cash discount sign in a sandwich shop. As I have done at least fifty times, I asked about their experience with the program. And, as is usually the case, they assured me […]
I recently noticed a cash discount sign in a sandwich shop. As I have done at least fifty times, I asked about their experience with the program. And, as is usually the case, they assured me after two years on the program they have had “very few complaints” and no significant impact on revenue or customer behavior. Keep reading for my thoughts and some Q & A on these programs.
- Why do I believe these programs are right for the consumer?
- Why do I believe Cash Discounting has a slight advantage over Surcharging?
- Why doesn’t the merchant do a normal price increase procedure rather than posting a sign?
- Why don’t I think Visa will “Shut Down Cash Discounting”?
“A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person to provide a discount or in-kind incentive for payment by the use of cash, checks, debit cards, or credit cards.”
- However, at the end of the day, if there is no enforcement and the legislative branch in most states does not clarify the language in the Durbin Amendment, compliance becomes less and less concern.
- I believe getting the math right and figuring out issues like accounting reconciliation on sales tax (which drives large merchants crazy!) is much more important at this time than squabbling over the wording of signs or how the receipt looks on the terminal.