Cash Discounts – When does it make the most cents?
A great place to start when deciding whether cash discounts are an added benefit to merchants is to look at buyer behaviors.

Buyer Behaviors

Buyer behavior data paints an accurate picture of where cash discounts would benefit specific merchants. Age, Income, and store type all factor in critical elements when deciding when a cash discount is a feature that makes the most cents (cheesy pun-intended).

Knowing the audience that your merchant is targeting and clientele that is making purchases will factor into the equation. Based on the US Consumer Payment Study by TSYS, credit cards are preferred over 50% for multiple age groups.

Cash Discounts_income iconIncome

There are some implications of lower income individuals preferred method of payment being cash and those in the higher income ranges using credit cards for purchases.

Cash Discounts_gas station iconStore Type

Understanding the variance of age and income within the specific type of store will help to uncover the potential for merchants to offer cash discounts. A store can begin to track this for small periods of time to start to capture the trends and keep in mind that multiple locations may not all fit the qualifications. Location will serve as a large factor in consumer traffic, which will differ from store to store.

Age

Cash Discounts - Buyer Behavior (Age)
PRO TIP: Cash discounts are not the best option for every business. If you’re an ISO or Agent, working with your merchants to help them better understand the advantages and disadvantages of offering cash discounts is a great way to provide valuable information and become a trusted advisor.

Where is the opportunity in cash discounts for ISOs, Agents, Merchants and Consumers?

Find out in our quick infographic

Consumer Concerns

In the case of the consumer, the option to receive a cash discount at the point of purchase is not going to negatively affect the buyer’s behavior. If anything, it offers the consumer more decision-making power. There is one caveat regarding transparency with the disclosure of the use of cash discounts. As a consumer, understanding in advance that these options exist will lead to a better experience, so keep in mind that properly posting messaging will reduce the chance for confusion or miscommunication.

Critical highlights from this article:

  • Age, Income, and Store type matter
  • Be cautious about implementing cash discounts across all locations
  • Keep consumers well informed for the best customer experience

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