Want a Discount? Pay in Cash.
WALL STREET JOURNAL: By Laura Saunders
Asking to pay in cash can unlock unexpected savings, from restaurant meals to car repairs. In an era of credit-card surcharges and digital payments, some merchants still offer cash discounts to avoid processing fees, which average 2-3% per transaction.
At small businesses, the perks are straightforward. A Brooklyn, N.Y., barber shop shaves 10% off haircuts for cash payers, citing lower fees. Similarly, a Chicago auto shop deducts $50 from a $500 oil change if you pay with greenbacks. These deals stem from the fact that cash eliminates the 1.5-3.5% swipe fees charged by card networks like Visa and Mastercard.
Larger chains are catching on, too. Home Depot and Lowe's quietly allow contractors to negotiate cash rebates on bulk buys. Even some fast-food spots, like certain Taco Bell locations, offer 5% off for cash to sidestep fees.
But caveats apply: Discounts can't exceed the fee savings under federal rules, and they're rare at big retailers due to uniform policies. In high-inflation times, cash deals help stretch dollars—consumers saved an estimated $10 billion in fees last year by going analog.
Experts advise asking politely: "Do you offer a cash discount?" Track local spots via apps like Yelp. For bigger purchases, like appliances, haggle at independent stores.
Ultimately, cash's appeal lies in immediacy and savings. As one retailer quipped, "Cash is king—especially when it buys loyalty."
The Cash Discount Model is Winning
For years, card brands wrote the rules and merchants ate the bill. If you wanted to accept Visa or Mastercard, you were expected to smile, swipe, and quietly absorb every processing fee with no way to recover those costs at the register.
After a wave of antitrust litigation and a historic class-action settlement, the landscape shifted. Merchants in many states can now add surcharges on certain cards or raise prices across the board to cover “swipe fees.” But those options can feel like a lose–lose: upset your customers with visible surcharges, or quietly bake rising costs into every price tag.
Meanwhile, the numbers keep climbing. U.S. merchants paid about $172 billion in processing fees in 2023, and a record $187.2 billion in 2024, with average credit-card fees in the 1.5%–3.5% range on each transaction. Nilson Report+2Merchants Payments Coalition+2 For businesses already squeezed by higher wages, rent, shipping, and tariffs, that’s a brutal hit to net profit.
That’s why more merchants are turning to a well-designed cash discount model. By clearly posting a standard “card-included” price and offering a discount for cash or equivalent payments, merchants can legally recover most or all of their processing costs while staying aligned with today’s pricing norms. The customer keeps choice. The merchant keeps their hard-earned profit.
Cash Discounts Up Over 60%
CNBC: By Ana Teresa Solá
In a digital payment era, cash still holds advantages—especially when merchants offer discounts to avoid credit card fees. These “swipe fees” cost businesses 1.5%–3.5% per transaction, prompting many to incentivize cash. Key benefits of paying cash:
Instant discounts: Small businesses like restaurants, auto shops, and salons often shave 3%–10% off for cash. A Brooklyn diner cuts 5% on meals; a Chicago mechanic drops $40 on a $1,200 repair.
Negotiation power: At independent retailers (e.g., furniture or appliance stores), cash buyers can haggle for rebates that offset processing costs.
Fee-free for merchants: Unlike cards, cash incurs no interchange fees, making discounts legally viable under federal rules (capped at fee savings).
Where it works best:
Local & independent businesses – chains rarely allow it.
High-ticket items – contractors save thousands on lumber or HVAC via cash deals at Home Depot’s pro desk (unofficial but common).
Downsides: No rewards, fraud protection, or purchase tracking. Pro tip: Ask politely—“Any cash discount?”—and check Yelp for cash-friendly spots.
Bottom line: While credit cards dominate for perks and security, cash remains a smart play for immediate savings at fee-conscious merchants.
SHOUT IT FROM THE MOUNTAIN TOP
