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Guide to the Cash Discount Program for Delivery/Take-Out

Small business owners nationwide are faced with high costs of credit card monthly processing fees. Added to other financial obligations that American small businesses have to deal with, these credit card processing fees can be a real hassle. 

Most customers prefer to pay for products and services with their credit cards, and accepting credit card payments in your business will attract more customers. This leads to a dilemma for small business owners, who must foot the processing bills for each customer’s credit card purchase.

Cash discount programs are your best bet if you want to cut down processing fee costs for your small business. Cash discount programs provide several advantages for your small business, as they encourage and incentivize your customers to carry cash and make cash purchases. 

This article details how to get started on cash discount programs for your delivery/take-out business, its pros and cons, and if the program is the best fit for your business. Here’s our guide to the cash discount program for delivery/take-out business.

Guide to the Cash Discount Program for Delivery/Take-Out

An Overview of the Cash Discount Program

The cash discount program is a program run by a business that grants discounts to customers paying with cash. Such a program involves providing payment options to your customer and informing them of the price difference between cash and credit card payments.

Many gas stations used to run this program to encourage patrons to buy with cash so as to save money on payment processing costs. However, this program is now run by several small businesses, including delivery/take-out businesses.

As many business owners try to dodge the rising costs of running a business, cash discount programs offer a means for delivery/take-out business owners and other small businesses to save up to 100 percent of card processing fees, and earn as much as 4 percent profit on every cash purchase.

In such financial times, every cent is important to small business owners, and cash discount programs make it possible to save on exorbitant card processing costs by adding a small customer service fee to credit card-carrying customers. 

Most cash discount programs require the merchant to pay low monthly fees (as low as $10), and require next to nothing to set up.

With such programs, delivery/take-out businesses and other small  business owners need not worry about rising transaction fees of credit card companies, as the program seamlessly offsets the costs while letting you save more money.

Advantages of the Cash Discount Program for Delivery/Take-Out Business

Cash discount programs have several benefits for both merchants and customers. Some of these benefits include:

Eliminate Credit Card Processing Fees

The first and most obvious benefit of cash discount programs is that it can drastically reduce or eliminate merchant service fees by up to 100%. If you run a cash discount program in your delivery/take-out business, you’ll encourage your customers to pay with cash, reducing your monthly processing fees.

Customers who insist on paying with their credit card will incur a little charge on their transactions, which helps business owners cover credit card transaction costs. The program largely helps small businesses eliminate costs that eat into their profits, leaving businesses with much more cash to run the business or save.

Simple to Setup and Run

Guide to the Cash Discount Program for Delivery/Take-Out

Cash discount programs are much easier to set up than you can imagine. More likely than not, your current merchant services provider already offers cash discounting services. You can set up and start running a cash discount program in your delivery/take-out business in a few easy steps.

This program does not require special hardware, and any POS or mobile card reader can be reconfigured to automatically charge credit and debit cards and grant discounts for non-credit card users.

After signing up for a cash discount program, your merchant service provider reprograms your processing hardware and payment gateway. Afterward, you just need to place the necessary signage in your take-out/delivery business to sensitize your patrons about the program.

Stable Profit Margins

With traditional credit processing fees, the merchant is usually charged a percentage of the transaction as a processing fee. However, with cash discount programs only incurring a small flat monthly fee, small business owners will have a stable profit margin, as cash discount programs eliminate the volatility of traditional processing fees. This will give small business owners the confidence to plan ahead regarding their business.

Increased Cash Flow

Since the program encourages cash-paying customers, small business owners get to access their money quicker than having to wait for card payments to process. This helps prevent credit card processing companies from keeping your money for long periods. Even as businesses have shifted to more digital payment options, getting hard cash has advantages. However, cash discount programs do not strip your customers of the chance to use their preferred payment method. Instead, they get to pay their preferred way while saving your business on processing fees.

Fewer Chargebacks

The issue of credit or debit card chargebacks can be a serious problem for small business owners. Even though chargebacks are supposed to protect customers from fraud, they can often be a serious inconvenience for business owners.

Chargebacks constitute a serious issue and can be frustrating and time-consuming to navigate. With some business owners reporting as much as 50% friendly fraud chargebacks, it’s a no-brainer to reduce the incidence by implementing a cash discount program in your small business.

Increased Patronage

The prospect of lower prices is a fantastic marketing strategy to get customers through the door of your delivery/takeout business or other small business. Everyone loves the prospect of a discount or a good bargain, so advertising cash discounts, no matter how small they may be, might be enough to entice bargain hunters to your business.

Challenges of the Delivery/Take-Out Industry

Every business has its challenges, and different industries also have to face a unique set of challenges. Running a delivery/take-out business is not all rosy, as the business model is marked by some significant challenges, including:

Volatile Market Prices

Guide to the Cash Discount Program for Delivery/Take-Out

Like many industries, the food industry is plagued with highly volatile market prices, making it difficult for merchants to set a stable pricing structure. In a bid to run digitized services, small businesses involved in delivery/take-out have to use POS services and the cost of maintaining their business software; and these high fees eat into business profits.

Inflation has also dealt a blow to this industry, and business owners have to either increase prices, reduce food portions, or remove some foods from the menu entirely. Such changes can make customer retention hard, but a cash discount incentive can help encourage your take-out customers.

Food Quality Standards

Unlike other service industries, food preparation and delivery must be done while observing safety standards. Therefore, such businesses must ensure that their employees are trained to handle and transport food with high safety standards.

Payment Options

Customers will likely stick with a delivery/take-out service with more payment options. Some take-out/delivery businesses like Postmates and Amazon Fresh do not have cash payment options, and this might deter cash customers who would prefer not to divulge their credit card information.

Thus, to be a successful delivery/take-out business, you must accept cash and card payments from your customers. Introducing a cash discount program will be a win-win for your business.


These businesses must come face-to-face with several logistic issues to keep their business running. From getting the right delivery partners to choosing the delivery radius and vehicles, there’s a lot to figure out.

Is the Cash Discount Program Right for Your Delivery/Take-out Business?

The cash discount program is great for small and even larger businesses. However, before setting out to implement, you must be sure the cash discount program is ideal for your business. Here are some things to consider:

Does Your Business Need Cash Payments?

As a business owner, you know the ins and outs of your business better than anyone else. So before implementing the cash discount program, ask yourself if your business really needs more cash payments.

Keep in mind that you will get to enjoy lower to zero transaction fees by using cash discount programs,

Are Your Products/Services in High Demand?

Before opting for a cash discount program, you must thoroughly consider your customer base and product demand. It’s also crucial to assess what percentage of customers prefer to pay with cash versus a credit card.

Setting up a cash discount program while thoroughly educating your customers will help you satisfy all their needs. If you employ the right merchant service provider to set up the program for your business, you can run a cash discount program seamlessly.

Also, commit to educating your customers about how the payment options benefit them and your business. Most people understand how much businesses have to spend on card processing and would be willing to indulge your methods to help your business.

How to Implement a Cash Discount Program for Your Business

Guide to the Cash Discount Program for Delivery/Take-Out

Starting the cash discount program for your delivery/take-out business is a straightforward process. Although the process may differ between merchants, it often goes like this:

  • Sign up for a cash discount program with a reputable merchant processor
  • Get the necessary processing hardware to run this program (If your current hardware works, skip to step 3)
  • Have the merchant processor install and test (or reprogram, in the case of old hardware) your hardware.
  • Post the necessary notices and signage in your business premises both online and offline
  • Start saving money

This program benefits both the customer and the business, and the customer pays with either cash or card, with an understanding of why the prices differ.

What Does My Business Need to Get Started?

As a business owner, you need to know that there are laws guiding different types of payment policies. Cash discount programs can be implemented nationwide; however, you must ensure that you comply with federal and local laws.

You’d also need trained professionals to ensure your business finances are in good hands. As stated earlier, you must have put up necessary notices and signage before implementing the program.

Alternatives to the Cash Discount Program

Set a Minimum Purchase Amount for Credit Card Users: To help reduce card processing fees, it might help to set a minimum purchase amount for your customers paying with credit or debit cards. 

Increase Prices to Offset Processing Costs: Another option is to increase the prices of your products or services. This can be a great way to cover costs without having any customer paying less or more. However, there are several downsides to being a business with overpriced goods.

User Reviews About the Cash Discount Program

So far, there’s been overwhelmingly good reviews for the cash discount program. Some statistics indicate that over 90% of people do not mind buying from a business running such programs.

The key thing has always been public sensitization/education. Letting your local customers understand the need for such programs goes a long way to help them accept it gladly. With the rising costs of running a business and the uncertainty surrounding several drivers of your small business success, many customers will be more than willing to welcome the program if they are well-educated about its dual benefits.


If you run a delivery/take-out business, chances are that a large number of your customers would want to pay with credit cards. The high credit card processing fees can lead you to consider raising product prices in your delivery/take-out business to offset the costs of processing fees.

However, such a move can result in your business losing patrons due to comparatively high prices. Therefore, small business owners have to figure out a way to manage product prices vis-a-vis profit margins for their business.

Note that before getting started with a cash discount program, get a merchant processing rep to expound on the details of their program. Also, compare different rates for your business’ monthly processing volume, and read reviews to make informed decisions about the cash discount program for your business. After choosing a good payment processing provider, train your staff and start saving. 

For a deeper dive into how credit card processing works visit our payments knowledge library