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Cash discounting is a little something that businesses offer customers who pay with cash. When merchants and those providing services accept credit card payments, they end up paying a processing fee to the credit card company. Particularly for small businesses, these fees add up and can take a big chunk out of a company’s bottom line. In some states, it is legal to charge a service fee to the customer, to offset the service fee charged to the merchant or service provider. This is not, however, legal in every state.

Rather, cash discounting is being done to give consumers a better feeling about the company, the credit card service fee policy, etc.

How Does Cash Discounting Work?

Technically, for a true cash discounting system to work, and so as not to raise red flags that you’re charging customers a service fee for their plastic, the cash discounting system works as follows:

As an alternative to credit card processing, merchants offer a decreased price for cash purchases. This is referred to as a cash discount. Though, to all posted prices, a customer service fee has technically been added, it remains the posted price – regardless of whether a client pays with cash or plastic. If the customer pays with an in-store gift card or cash, the fee is removed and appears on the receipt as a discount. Some merchants and service providers go so far as to offer cash discounts as well for checks or debit cards.

States such as California, New York, Florida, and some others – through rulings arrived at via court proceedings – have made it legal for merchants to apply a service fee at the end of a purchase which appears on the receipt. This is to offset credit card processing fees the business would ordinarily have to pay. In this case, the posted price would have been the regular price and the service fees will be extra for plastic purchases.

Good Businesses for Cash Discounts 

So, which businesses can benefit most from cash discounts?

Professional services:

  • Funeral homes

  • Freelancers

  • Law offices

  • Doctors’ offices

  • CPAs

Home Services:

  • Exterminators

  • Pool care providers

  • Plumbers

  • Electricians

  • Lawn care services

  • Home security providers

  • Window/roofing installers


  • Event ticket processors

  • Class fees

  • Team registration fees

  • Club fees

  • Fundraisers

  • Charities/nonprofits

  • Churches

Consumer goods:

  • Smoke shops

  • Dollar stores

  • News stands

  • Variety stores

  • Retail clothing shops

  • Antique shops

  • Specialty boutiques

  • Grocery stores

  • Gas stations


  • Hot dog stands

  • Ice cream shops

  • Coffee shops

  • Bakeries

  • Food trucks

  • Delivery/take out

  • Quick serve

  • Diners

Personal services:

  • Daycare centers

  • Pet grooming

  • Auto repair shops

  • Massage/spas

  • Drycleaners

  • Nail salons/hair salons

Naturally, these are not the only businesses that can benefit from cash discounts, but it certainly covers a lot of the bases.

Work with TITAN Merchant Services

Are you a merchant or service provider who needs to adapt to credit card payments, but you’re not sure where to start? Has the coronavirus affected your business and you’re in need of some funding, just to get you through? TITAN Merchant Services can help.

TITAN Merchant Services offers merchants the opportunity to accept credit card payments from customers without having to pay for service fees/processing fees during the COVID-19 virus. In fact, we have a number of resources being currently offered to help our community get through this pandemic. Click here for details.