top of page

How to Implement a Legal and Compliant Cash Discount Program.

By now, you’ve probably become aware of the rising popularity of Cash Discount programs as a way to offset your merchant service fees.

This is what cash discount looks like on a cash payment receipt and a card payment receipt.
Cash vs Card Payment Receipt Example

A Cash Discount program is a method of implementing a service fee to all customers who pay with a card, while providing a discount to those who pay with cash. Cash Discount programs are legal in all 50 states per the Durbin Amendment (part of the 2010 Dodd-Frank Law), which states that businesses are permitted to offer a discount to customers as an incentive for paying with cash. While this type of program has been used by gas stations for years now (displaying cash prices), there is still confusion on how to implement a Cash Discount program the right way.

Guidelines and Requirements for Cash Discount

The card associations have strict guidelines on how a Cash Discount program must be implemented. The essential steps being 1) Correct signage must be posted at the door and check out 2) The amount of the added service fee must be clearly displayed on the receipt and 3) Offering your customers a cash discount verbally. Even though gas stations post different prices, as a retailer it is not necessary to do so. The posted prices are considered cash prices and the signage allows for a fee if the payment is not made with cash. In order to be compliant, merchants with a Cash Discount Program need to display the Base Amount of the transaction, the Cash Discount, and the Total Cost of the transaction on the customers’ receipt (see below).

Applying the Service Fee

Without the proprietary technology programmed into your terminals, you would have to manually apply the service fee. But if a fee is incorrectly applied to a transaction, the additional fee charged to customers would be labeled as a Surcharge which is prohibited in 10 states (California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas). If the fee is not a Cash Discount and is deemed as a Surcharge, even if allowed in your state, has strict requirements on the amount of the Surcharge. As a merchant, you must register with Visa/MasterCard in order to legally apply the surcharge. A Cash Discount Program has no necessary registration.


It is also important to note that you are forbidden by Visa, Mastercard, and your processor’s rules to profit on a credit card transaction, which could happen if you accidentally charged more than you were charged by your processor. While many processors may offer a Cash Discount program, not all of them offer and utilize the compliant technology that is compatible with your terminals. A major difference we have seen while looking at the providers across the industry is the Cash Discount line item. Many providers offer a program without the Cash Discount line item showing on the receipt. It is important that when looking at processors, they are offering you a compliant program with capable technology to display the required line items on the receipt.


bottom of page