--- title: Per Item or Percentage Cash Discount, Which is Best? - CCSalesPro description:   Thanks for joining me in this episode of my series “How to Sell Cash Discounting.”  I’m enjoying the opportunity to help you understand cash discounting.  I believe for 2018, 2019, and 2020, this could be your BIG chance to make that six-figure income!  Should you do a percentage or a per item cash discount?  […] --- [Blog ](https://www.ccsalespro.com/blog) # [Per Item or Percentage Cash Discount, Which is Best? - CCSalesPro](https://www.ccsalespro.com/blog/per-item-percentage-cash-discount-best) Written by [James Shepherd](https://www.ccsalespro.com/blog/author/james-shepherd) | Jan 8, 2018 8:59:02 AM   Thanks for joining me in this episode of my series “How to Sell Cash Discounting.”  I’m enjoying the opportunity to help you understand cash discounting.  ***I believe for 2018, 2019, and 2020, this could be your BIG chance to make that six-figure income!***  Should you do a percentage or a per item cash discount?  My explanation of each option will guide your decision. ***Read the previous article here:  http://bit.ly/2CUsgjj  Consumers React to Cash Discounting – Here’s what they’re doing*** Before our industry began selling cash discounting, the norm all along has been a per item fee.  Now that we have credit card machines in place, doing percentages is also possible.  ***We need to understand which of these is the better option, and we need to understand what “better” means.***  There is good and bad with both options.  There are some guaranteed principles involved which you should know. ***#1.  If a merchant has an average ticket size of more than $50, you should always do a percentage.  ***In this situation the per item fee is going to be too difficult.  The amount would be very low if paying over $50 with a check card.  And the amount could be very high if paying over $50 with a credit card.  Thus, for a $100 transaction, a merchant could pay as much as $3 in interchange or as little as $0.24!  ***There is too big a difference. *** You definitely want to do percentages on that just to protect yourself. ***#2.  For transactions below $10 to $12, you absolutely want to do per item fees every single time.  ***The percentage in this situation would change drastically from one dollar to the next.  It would look ridiculous!  A $6 transaction versus a $3 transaction would require a double percentage to compensate.  ***The reason for this is the fixed cost.***  To process a transaction from most processors costs at least $0.30, no matter whether the transaction amount is $1, $10, or $20.  If you do $0.40 to $0.60 cash discount, that will cover you all the way down the scale.  Whereas if you did 4%, that would not cover you all the way down. ***#3.  There are regulations which have capped surcharging at 3.99%.  ***This doesn’t technically apply to cash discounting.  But processors are sticking to it.  They want to be able to say to regulators, “We did the right thing.  We stayed below 4%.”  So, you can’t go above that with most processors right now.  You will end up losing money on the $3 and $4 transactions. ***The rule for cash discounting is per item fee below $10 and percentage above $50.  ***There is no hard, fast rule for transactions between $10 and $50.  Whether to use per item or percentage depends partly on the type of merchants and transactions.  Make sure you have a good processor who understands the difference and can help you.  You certainly need a processor who offers both per item and percentage options.  Which option to use in these situations is up to you. Personally, I think the per item fees are a bit simpler, especially for retail and restaurants.  Saying, “We have a $0.50 discount.  We will give you $0.50 off if you pay with cash.” makes more sense than “We give you 4% (or 3%) off.”  ***Ask yourself what is best for the merchant; what’s best for the consumer; and what’s best for your profits.  Take all three of those into consideration when making the decision.  *** If there is no difference on their side, obviously you’ll want to get the profits.  That’s important. Many processors I know are still stuck on a surcharging model.  There are still some not doing cash discounting yet.  ***So, for those of you just learning how to sell cash discounting, you are still at the ground level. *** I would personally lean more towards the per item fee because some processors won’t be able to compete with me yet.  They will take a while to catch up and do the per item fee.  There’s a bit of extra edge for you! Don’t miss the last episode in this series!  I’ll complete our in-depth study of cash discounting. ***Read the next article here:  http://bit.ly/2AIVTyT  Cash Discounting – The Opening Pitch and How to Sell It*** [View full post](https://www.ccsalespro.com/blog/per-item-percentage-cash-discount-best) ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "James Shepherd" }, "dateModified" : "2023-05-04T17:24:38.888Z", "datePublished" : "2018-01-08T08:59:02Z", "headline" : "Per Item or Percentage Cash Discount, Which is Best?", "image" : { "@type" : "ImageObject", "height" : 752, "url" : "https://23985695.fs1.hubspotusercontent-na1.net/hubfs/23985695/Imported_Blog_Media/Fri-Blog-Per-Item-or-surcharge-e1514991830454.jpg", "width" : 700 }, "mainEntityOfPage" : "https://www.ccsalespro.com/blog/per-item-percentage-cash-discount-best", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png", "width" : 60 }, "name" : "Blog" } } ```