Cash Discount Programs in Wisconsin: How They Work and What to Get Right

Card fees have become one of the bigger monthly bills for many Wisconsin restaurants, auto shops and retailers. A cash discount program is one way to bring that cost down without cutting staff hours or quietly raising every price.

Here is how these programs work, how they differ from surcharging, and what you need to get right before you switch one on.

What a cash discount program is

With a cash discount program, your posted price is the regular price. Customers who pay with cash receive a discount off that price. Because most customers still pay by card, the posted price covers most of what you pay to accept cards.

Federal law protects a merchant's ability to offer a discount for paying with cash. The key is that the program must truly be a discount from the posted price, not a hidden fee added at the register.

Dual pricing

Dual pricing is a close cousin. You show two prices for each item — a cash price and a card price — on your menu, shelf tags or receipts. Customers see both up front and choose how to pay. Many restaurants and service businesses prefer it because it is easy to explain at the counter.

How surcharging is different

A surcharge is a fee added on top of the price when a customer pays by credit card. It is allowed in Wisconsin, but the card networks have strict rules:

Surcharges generally apply only to credit cards, not debit or prepaid cards, even when the debit card is run as credit.

Visa caps surcharges at 3%, and no surcharge can be more than your actual cost of accepting the card.

You normally need to notify your processor and the card brands before you start.

The surcharge must be disclosed at the entrance, at the point of sale and on the receipt.

Because of the debit card rule, surcharging often recovers less than owners expect. Cash discount and dual pricing programs avoid that problem, which is why many businesses choose them instead.

What to get right before you start

Signage. Post clear notices at your entrance and register explaining the cash price. Customers should never be surprised.

Receipts. Your terminal or POS should show the discount or both prices clearly on every receipt.

Equipment that handles it automatically. Doing the math by hand leads to mistakes and unhappy customers.

A compliant setup from your processor. Card network rules change, so your provider should keep your program current.

Staff talking points. A one-line explanation at the counter goes a long way: "We give a discount when you pay cash."

Is it right for your business?

Cash discount programs tend to work well for businesses with steady card volume and loyal local customers, like restaurants, bars, auto repair shops, salons and contractors. If your customers are very price-sensitive or your margins depend on online sales, interchange-plus pricing may be a better fit.

The honest answer depends on your volume, your average ticket and your customers. That is something we can work out together in a few minutes.

Talk it through with a local expert

Wisconsin Electronic Payments has set up card programs for Wisconsin businesses since 1998. Read more on our cash discount program page, or call Andy at (262) 370-8560 for a no-pressure review. We respond within the hour during business hours.