How Businesses Are Saving with Swipe4Free Cash Discounting
For almost two years now, Covid-19 has disrupted every aspect of human life. And these days, small businesses throughout the United States are still reeling because of Covid-related cost increases, restrictions, and revenue loss.
In this time where small business budgets across the U.S. are strapped, many business owners are seeking ways to reduce costs, as one can’t easily predict consistent revenue for the time being. One popular option is the cash discount program offered by Swipe4Free.
Cash discount programs have been around for about a decade, and they’re an alternative to the surcharge that a lot of merchants assess when a customer pays with a credit card. Small businesses are using cash discounting to offset Covid-19 cost increases, loss of revenue, and increase labor costs. Here’s how!
How Does Cash Discounting Work?
Cash discount programs, like the one offered by Swipe4Free, were created so customers felt encouraged to use payment methods other than credit and debit cards. Cash and check are the two main payment alternatives, and when a customer pays with either, the cash discount is applied at the time of sale.
The foundation of the cash discount model is a small fee that’s charged when a customer purchases a product or service from a business that’s implementing a cash discount program. Established in 2015 by founders Leo Vartanov and Chris Benabu, Swipe4Free allows merchants to pass their credit card processing fees along to the customer by implementing a 4% non-cash charge to all customers who pay with credit cards. However, when a customer pays with cash, a check, or a store-specific gift card, they avoid this fee. If a business is using a cash discount program, they are legally required to include the fee amount on customers’ receipts. Swipe4Free’s technology will calculate this on the spot for the business owner.
In exchange for their flat fee, Swipe4Free will cover all credit card charges for the merchant. This system eliminates back-end accounting as well as complex statements. In this way, cash discounting programs don’t just save businesses money but time as well.
Surcharges are fees that are added to the price of goods and services when the customer pays with a credit card, and usually, these are assessed after tax. 48 states allow surcharges at present, and these can’t be assessed to debit cards. Cash discounting programs, while they utilize some aspects of the surcharge system, are more beneficial, to both customers and merchants, than surcharges.
What Cash Discounting Savings Can Be Used For
Across the board, prices are rising, and in certain lines of business, costs are squeezing already thin profit margins. Cash discounting is great for businesses that have experienced Covid-related cost increases, as with cash discounting programs there’s no paying an exorbitant amount in credit card fees.
To be able to take credit cards, businesses have to pay almost a dozen different fees. Not with cash discounting. A company like Swipe4Free will take care of those fees and instead charge their customer a flat fee that’s significantly lower than what was being charged prior. This way, the business can redirect the saved capital and use it to pay for increased labor costs and/or make up for revenue shortcomings