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Guide to Creating a Cash Discount Program for Diners

Guide to Creating a Cash Discount Program for Diners

While paying via plastic is convenient for customers, their processing fees are inconvenient for diners. Plus, with the increasing popularity of credit cards, many customers prioritize taking their cards instead of cash.

Many dining restaurants are seeking ways to compel customers to pay in cash, and one of the most effective ways is a cash discount program.

Who wouldn’t want to get some cash back on every purchase they make? This article covers a guide to the cash discount programs for diners.

Guide to Creating a Cash Discount Program for Diners

What Is a Cash Discount Program?

A cash discount program is a simple method to give customers a discount every time they pay using cash. Many businesses opt for cash discounts encouraging customers to use cash instead of cards to eliminate credit card processing fees. On average, credit card processing fees can range from 1.5% – 3.5%.

These fees might be insignificant on small purchases, but they can become troublesome on bigger purchases. A business paying thousands of dollars daily on such fees will prefer to save it, and cash discount programs are the best way to do so.

This program benefits the customers, too, since they can pay less than the mentioned price. In addition, a business offering cash discount programs can easily become popular by properly advertising its discount. This works best for new businesses as a marketing tactic and saves them money.

On the other hand, businesses won’t have to increase product prices to overcome card fees. This also makes them more favorable as customers are getting products at a lower price, and on top of that, they also get a discount.

Benefits of Cash Discount Programs

Here are some advantages you can get after introducing the cash discount program at your diner.

Zero Credit Card Transactions or Processing Fees

Since you encourage the customers to pay in cash, that’ll eliminate the credit or debit card from view. If no cards are involved in the picture, there are no credit card fees. You can save tons of money daily with cash coming to your counter instead of money going directly to your bank via cards.

A business can utilize those savings to expand its operations or introduce new products.

Gives More Control to The Customer

Customers always love customization options, whether during payment or choosing a product. With cash payments, you are allowing customers to choose a lower price. They have to pay more with a credit card to get the same product.

Those interested in saving money will pay in cash, while those who don’t like carrying cash will opt for a card. With more options, you have a better chance of attracting bargain hunters.

These bargain hunters will keep returning for more if they find a good deal at your diner. Since many people are interested in trying new food, a reduced price gives them a good reason to visit your diner more often. They can also recommend your place to others, bringing more customers.

A Good Marketing Tactic

If you can’t spend a lot of money promoting your diner, cash discounting can help you achieve the same effect. You can post a cash discount signage on your social media accounts or website, letting every visitor know about this.

You can also place it on the site’s banner and as a sign in the diner, letting everyone see that you are giving them a discount on each cash purchase.

Those out for a casual walk and want to eat something without spending a lot will find such discounts quite tempting.

Constant Profit Margins

Every business has to make plans and budgets based on profit. Traditional card fees change with each purchase making it hard for a business to predict its profit margin.

You can keep the cash discounts fixed, giving you an idea of how much you’ll gain from each sale.

More Cash in Hand

Technology has evolved from cash to credit to contactless payments. While many prefer the security they get using cards, having good old cash at hand is always convenient.

You don’t have to wait for the transaction to process; in many cases, it is reversed, and you have to contact the customer to repay. However, you must always keep the option to pay via card.

Reduce Chargeback Risks

Guide to Creating a Cash Discount Program for Diners

Chargebacks only occur in credit card transactions which are additional fees that some credit card companies charge over some particular transactions. If a customer checks their bill and finds out they paid more than usual while purchasing from your store, they’ll knock at your place.

You’ll have to do in-depth checking to find the reason, which can waste your time.

Cash discount processing has no chargeback risks simply because a customer will pay the exact price. Even if there is a problem, you’ll have everything written in your register, making the solution easy and peaceful.

Easy Payment Process

Cash-paying customers make things easy as you don’t have to go through hidden fees, fraud, data breaches, or frauds. You’ll also have a good idea about the money you collected after deducting the discounts you gave.

You cannot be sure about the amount you collected on a credit card transaction unless you check the merchant account. A cash discount program will help you better understand the overall payment.

Extra Security

Carrying a credit card is pretty secure because you can block it easily if someone steals it. However, once your debit/credit card information is out, those who have access to it can use it until you block it.

Who knows how much money they can use while you spend time contacting your card provider? Cash discounts can help users keep and pay with cash, removing this hassle.

Smooth Cash Flow

With all the cash coming into your till, it will be easier to track the cash flow. Plus, entries and cash collecting will be quick and on the spot allowing you to make changes without any wait.

While in a credit card transaction, you can enter the amount only to find out that the credit company altered the fee structure, and you have to make adjustments in your cash flow record.

Avoid Bad Debts

Cash payments are instant, and with a cash discount program, you can compel customers to use cash instead of credit. That way, you can skip the line of credit that many businesses offer to their customers.

With the line of credit out of the way, you don’t have any money to take from the customer, so even if they go bankrupt or leave town, they don’t owe you anything you can write off as bad debts.

Challenges Facing Diners


Inflation is driving up the price of commodities, making it more challenging to stock up on necessities for your diner. As a result, you may have to raise the pricing of several menu items, which could upset your regulars.

This is why it is essential to seek out and implement cost-cutting measures, such as the use of a cash discount program.


What makes your diner unique in a market when there are so many others—and more are opening up every day? In this day and age, marketing is crucial to the success of your business.

You must create an online presence and come up with strategies for publicizing your diner

Finding Great Employees

Undoubtedly, the cost of living has gone up, making it difficult to keep fantastic staff members for your restaurant because the majority of talented workers are looking for employment with higher salaries.

Additionally, your company needs friendly, helpful employees that can work effectively with your customers and make your enterprise successful.

What to Check Before Starting a Cash Discount Program

A cash discount program is an excellent way to increase your customer base. However, there are some factors you must check before implementing them.

Does Your Business Need a Cash Discount Program?

Such programs are best for new businesses since they must save a lot to expand their territory. If the fees on credit card processing are not bothering you, you can skip the cash discount program for now.

However, if fluctuating credit processing fees have been affecting your profit, your business could probably do with more cash  transactions.

Guide to Creating a Cash Discount Program for Diners

Know Your Customers

If you already have more customers paying in cash than with a credit card, you won’t have to start offering cash discounts. Instead, you can encourage new customers paying on credit to get their first discount by paying in cash.

How to Implement a Cash Discount Program

Now that you know what benefits a cash discount program offers, you must know how to implement it. You must consider getting a profit even after giving a discount.

Here is how you must implement your cash discount program.

Determine Your Processing Cost

The idea is to bring people towards cash payment, so offering them the same discount you pay in your processing fee is better. First, determine what processing fee you pay on each transaction, check what percentage you pay, and determine a cash discount based on that information. If you want to forecast the profit and expenses easily, it is better to use a fixed discount instead of a percentage.

Now you have two options: either increase the price to match the total amount after the processing fee or keep it normal. For example, you can keep the price at $9 and offer a $0.5 discount or increase it to $9.5 and offer a $0.5 discount. Whatever you choose, the customer pays a lower price than the one mentioned.

Be Smart About Price Increases

One problem with implementing a cash discount is determining if you should increase a product’s price so the discount doesn’t cut your profit margin. You can resolve this by not increasing the price of a product with a bigger profit margin. On the other hand, if some of your products offer a low-profit margin, you can increase their price a bit more. For this, you’ll need some planning beforehand to set a competitive price tag that won’t put you at a loss or drive your customers away.

For example, a product with a cost price of $35 and a sale price of $45 already gives you a good profit. There is no need to increase its price. However, a product with a profit of $5 should have a higher price, so you won’t sell it for less than its cost when it’s discounted.

Post Proper Signage

Once you determine the details of the cash discount program, it is time to promote it. Create a poster or a banner and post them on your social media pages. Put signage on the entry and exit of your shop, letting everyone know what you are offering. You can also design a card and put it in every bag so customers can receive your promotional message. If you are using online promotional tools, ensure that every registered customer gets an email about this deal.

Make sure to mention that this cash discount program is only available for cash customers. If someone pays via card or any other payment method that doesn’t involve direct cash, they won’t get a discount.

How to Get Started on Cash Discount Programs?

Guide to Creating a Cash Discount Program for Diners

While starting a cash discount program is easy, you should get professional help to avoid complications. Here are some steps you can follow to start a successful discount program.

  1. First of all, you must find someone who is already offering such a program. It is not hard to find. You can look around your community and find many people offering this.
  2. Pay them a visit and ask for information about how they implemented the cash discount program.
  3. Get as many details as possible; know as much as you can.
  4. The next step is to purchase the necessary hardware and a payment gateway, if applicable. The hardware must be programmed to process the cash discount automatically.
  5. You can either install it yourself or allow the company representative to install it. After that, ask them to teach you everything about the hardware and its software. You never know when you’ll need to make changes to your program.
  6. Post the necessary signage and use the right POS equipment as long as your cash discount programs are active.

Alternatives to a Cash Discount Program

If you are uncomfortable with or have problems with a cash discount program, here are some alternatives.

Increase Price: The first thing you can do is increase the products’ prices. That way, your credit card processing is covered by the increased amount.

Limit Card Payments: Set a limit on how much a customer can pay with their credit card. However, you must mention this on your website and at the entrance and exit of your shop.

Change Your Credit Card Provider: If nothing else works, change your service provider to one that charges lower fees on credit card processing.

Customer Reviews on the Cash Discount Programs

The majority of clients appear to enjoy cash discount programs because they allow them to make purchases while saving money and even allow them to purchase items in bulk. This is wonderful news for your diner because, thanks to the cash discount scheme, large families or groups of friends may now gather together to eat without worrying about breaking the bank.

Final Words: Should You Opt for a Cash Discount Program?

A cash discount program can bring more customers and help increase your profit if implemented quickly. This article covers a guide to successfully starting a cash discount program and what benefits you can get from it. However, before starting a cash discount program, ensure you create a proper marketing plan to make full use of the discount and draw as many bargain hunters as possible.

Make sure to check out our payment processing expert guides to learn more.