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STOP End of Month Billing for Cash Discounting
Let’s continue digging deeper into understanding cash discounting. Welcome to the second episode in this series. In the first episode I compared...
Service Fees are Going Away on the Receipt for Cash Discounting
Things are changing! Non-cash adj and service fees not on receipts any longer. THE LATEST TREND – WHAT IS IT? I believe it’s a great way to reduce consumer complaints and make technology more compliant for cash discounting programs. The general viewpoint in our industry concerning cash discounting has had an interesting evolution. · […]
James Shepherd
Jan 23, 2020
Things are changing! Non-cash adj and service fees not on receipts any longer.
THE LATEST TREND – WHAT IS IT? I believe it’s a great way to reduce consumer complaints and make technology more compliant for cash discounting programs.
The general viewpoint in our industry concerning cash discounting has had an interesting evolution.
· In the beginning, it was viewed as a crazy idea.
· As it continued to be used, it was considered a good idea. But most people expected Visa to shoot it down.
· In 2020, cash discounting has gained a more respected status. Cash discounting is now expected to be here for a while.
These changes have happened very quickly. Some ideas to which I was a proponent a year ago now seem stupid.
A most recent trend I’m noticing is the disappearance of the non-cash adjustment or service fee on the receipt.
Before discussing this trend, I must state my disclaimer that I’m not an attorney; this is not legal advice. I’m not liable for your implementation of anything. The following is my personal opinion, not in any way the opinion of a professional attorney or legal expert.
I CAN help with compliance and more detailed information if you’d like to hire me as a consultant.
I realize there are many similar programs in the industry today known by several names. (This episode doesn’t include surcharging.) For the purpose of this episode, all these various programs are called “cash discounting.”
The industry belief about compliance has also evolved. In the beginning, the general belief was to abide by all surcharging stipulations and rules when doing cash discounting.
· Not more than 4% fee.
· Not more than 4% fee.
· Fee itemized on receipt.
· Signage at the point of entry and point of sale.
Thus, our industry could ensure that cash discounting was just as compliant as surcharging. The only difference being that a discount is offered only for cash payment, not debit payment.
(If you lack knowledge on this subject of cash discounting, please refer to my previous episodes. I’ve explained the subject in detail in many previous episodes.)
In recent times, the industry belief is moving away from that mindset. Now the opinion seems to be that if the program is NOT surcharging, it’s okay to be different from surcharging.
The most common change aligning with that opinion is changing the line items on receipts. This is more easily accomplished now. Thanks to smart terminals and POS systems, more compliant technology is available.
For a cash discounting program, the non-cash adjustment or service fee is included in the sub-total rather than on a separate line.
The whole concept of cash discounting is raising the regular price, then offering a discount for cash payment. The signage in a business should inform consumers of the price increase and cash discount.
Previously, receipts showed the purchase price (as an example, $100.) Another line showed the 3% ($3.00) non-cash adjustment. The total was $103.
Now, those two items are not on separate lines. That 3% increase will show in the sub-total, no matter how the consumer pays. The cash discount appears on the receipt only if there is a cash payment.
As I’ve stated in previous episodes, I agree with this mindset.
I think our industry is going in the right direction with this change. This is easier for consumers to understand. The higher price is on the receipt, and the cash discount is evident. Rather than the service fee being a line item, the cash discount is.
Our industry is learning that Visa is not necessarily an enforcement agency. Compliance issues have come from consumer complaints. If a consumer questions a receipt to the bank, that complaint eventually gets to Visa. Then Visa is obligated to take action.
In my opinion, using smart terminals and POS systems with more advanced technology is a great way to reduce consumer complaints and make programs more compliant.
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