Payments. Ecommerce. Profits.

The Worry Trick, By David Carbonell

Guide to the Cash Discount Program for Gas Stations

In today’s global marketplace, business owners must adopt various payment options to meet customer demands. Not to mention, to succeed in this digital economy and win sales against your competitors, you must offer your customers attractive sales to ensure they come back next time.

Customers can now pay for goods and services using cash, debit cards, checks, electronic bank transfers, credit cards, or mobile payments.

In addition to these payment methods, other programs are adopted in most gas stations that can lead to more gas savings. They include fuel rewards programs that allow customers to rack up points after filling up a fuel tank. Such programs are free for customers to join, plus you can use cash or card payments.

That said, new business owners might be tempted to accept all types of payments as long as they are paid. Furthermore, offering various payment options can attract customers and allow them to make large purchases. However, this is a risky action for a new business owner.

Usually, the various payment methods come in all forms – some are more valuable than others. What’s more, some payment methods are less trustworthy than others. Consequently, accepting all possible forms of payment exposes your business to further possible risks.

Undeniably, payment methods such as credit cards are expensive for businesses. This results from the credit card processing fees that are increasingly costly for business owners – losses are between 2 to 4% per transaction. Moreover, the increase in cyber crimes contributes to the abrupt rise in processing fees.

Nonetheless, there’s an avenue that allows businesses to reduce the high credit card processing fees: the cash discount program. This program is ideal for businesses like gas stations, restaurants, convenience stores, and grocery stores.

Offering cash discounts encourages customers to pay cash for goods, thus offsetting credit card processing fees. This article discusses the cash discount programs for gas stations and their benefits.

What Are Cash Discount Programs?

Guide to the Cash Discount Program for Gas Stations

Cash discount programs are rising as business owners seek ways to save money. Basically, a cash discount program is when businesses such as gas stations or restaurants offer discounts to customers who purchase a product or service using cash instead of a card – whether debit or credit.

Usually, a cash discount program allows merchants to offset the credit card processing fees to the customers without increasing the price of the product or service.

Normally, customers can still pay for goods or services using a credit or debit card. However, they’ll pay a service fee – that’s added to the product or service price to cover processing costs.

On the other hand, customers paying with cash receive discounts for the product or service. With the cash discount program, merchants don’t have to cover any credit card transaction costs, which can be expensive.

For years, gas stations have been using cash discounts on gas prices to encourage customers to pay for gas using cash.

Primarily, you’ll pay less per gallon if you purchase gas using cash. On the other hand, gas purchases with a credit card cost the same as advertised on the sign or pump.

Benefits of a Cash Discount Program – For the Merchant

Some of the benefits of introducing cash discount programs at gas station businesses include:

  • Reduced Credit Card Transaction Fees

Primarily, the benefit of introducing cash discount programs to your business is to promote cash payment, thus reducing or eliminating credit card transaction fees.

As mentioned, credit card processing can be costly for business owners as they lose between 2% and 4% of fees with every transaction. What’s more, with this program, you no longer have to worry about transaction fee increments for various cards.

  • Increased Flow of Customers

Offering gas discounts is among the many marketing strategies used to attract customers. Undeniably, most customers want to save some bucks where they can.

While cash discounts may seem small, they’ll get customers to buy gas and make other purchases.

  • Increased Cash Payments

Most customers prefer to use credit cards since they’re fast and convenient. However, cash discount programs increase cash payments, which enables quick access to funds for merchants.

Using cash to pay for gas eliminates the transaction process or time involved with using cards. Not to mention, cash payments grant merchants complete control over the money they earn – you don’t have to wait days to access your money.

  • Fraud Prevention

Cash payments reduce the chances of fraud since you test the money right there for fraud. This way, you’re sure of payment from customers for every transaction you make.

Credit cards are prone to fraud and cyber-crimes, thus adding more risks to your business.

  • Reduces Chargebacks

Lastly, increased cash payments reduce the chances of a chargeback. Typically, a chargeback occurs when a customer disputes a transaction. In case of a chargeback, the money is either reversed to the customer or retained by the merchant.

Consequent chargebacks can be expensive to the business.

Challenges Facing Gas Stations

Like any other business, gas station owners face some challenges, including:

Guide to the Cash Discount Program for Gas Stations

EMV Compliance

Since April 2021, gas stations have been required by major credit card companies to accept EMV cards (Europay, Mastercard, Visa). Pumps that accept EMV can be expensive to upgrade, and doing so could cut into your business’s operating time, resulting in greater losses.

To begin saving money and increasing profits, you should implement a cash discount program without delay.


Since the pandemic began, fuel prices have been steadily climbing, and there are no signs that this trend will reverse any time soon.

As a gas station owner, this presents a challenge because you need to find a way to make money without alienating your regulars or turning off potential new customers by increasing your prices.


It may be challenging to locate a supplier if your gas station is in a remote area. This is on top of the potential for other obstacles, such as harsh weather, truck breakdowns, roadblocks, and traffic, to arise at the same time.

You should get the most out of your money and put it aside whenever possible.

Does Your Business Need a Cash Discount Program?

Before setting up a cash discount program for your gas station business, there are some factors you’ll need to consider.

These factors are based on answers to several questions. They include:

Are Cash Payments a Priority to Your Gas Station Business?

Before setting up the program, you must ask yourself whether the program is a priority for your business. While reducing credit and debit card transactions sounds excellent, consider whether your business needs it. Usually, cash payments are a great deal, but it’ll take time to handle the cash flow and change. Additionally, it’s risky to bring cash to the bank. Not to mention, cash payments increase the risk of stealing by burglars or employees.

Are Cash Payments Common in the Gas Station Industry?

Cash discounts are a common phenomenon in the gas station industry. They’ve been in use for many years now. Normally, paying cash in a gas station with the program will cost you less per gallon. The fact that the program has been in use for years increases the chances of success if you implement the program in your business.

Do You Have Regular Customers in Your Business?

It would help to consider whether your customers are regular or non-repeat before setting up the program. For gas stations, the program works best for non-regular customers. However, if your customers’ experience with the program is familiar, they might consider it, and you’ll save money.

Not to mention, gas is a mandatory product for most customers. Therefore, they would be okay with the various payment methods even if they have to pay a service charge. Additionally, you can explain to regular customers that the program helps prevent the increase in gas costs.

How to Get Started with the Cash Discounts Programs

Guide to the Cash Discount Program for Gas Stations

A cash discount program is relatively easy to set up. The process will take a few days, depending on how quickly the representative installs or reprograms the current hardware. Here are some simple steps to get started.

  1. Contact a merchant processor representative to help you choose a program that works best for you. Additionally, the representative will help you sign up for the program.
  2. Acquire the required POS equipment that will help with the cash discount program.
  3. Have the representative install or reprogram the processing hardware to automatically process the cash discounts.
  4. If applicable, post the necessary signage in the gas stations or on the website.
  5. Start saving money

After setting up the cash discount program, customers can choose the payment method that suits them. Posting signage is an important step to notify the customers of the fuel discounts on the cash price they’ll receive after using cash instead of credit cards.

Gas Stations Requirements for Cash Discount programs

To run cash discount programs in your business, you’ll need to act in accordance with the laws (both state and federal) and the cash discounting policies the credit card companies set. Usually, the requirements for these programs are minimal compared to credit card associations. Most importantly, review the cash discount policies different credit card companies or associations set before settling for the program.

When it comes to the equipment, you don’t need special equipment to start the program. Most POS systems, mobile card readers, and credit card terminals can be reprogrammed by representatives to automatically apply discounts to cash payments.

Equally important, ensure that your employees have enough knowledge of the program so that they are in a position to solve any disputes that may occur. Also, post the necessary signage to inform the customers about the program.

Lastly, don’t use the shortcut of implementing your program to avoid paying the provider fees. Manually calculating and applying the discounts may lead to errors that can cost you.

Cash Discount Program Alternatives

Guide to the Cash Discount Program for Gas Stations

While cash discount programs effectively reduce transaction costs involved with credit cards, there are alternative ways to achieve this goal. They include:

Raising the Fuel Prices to Cover the Transaction Costs

Most business owners use cash discount programs to help cater to credit/debit card transaction costs. This way, prices of goods and services are not increased.

Another alternative to the cash discount program is increasing the prices of goods (fuel) to cater to the transaction cost. This method also penalizes customers that use cash too.

Additionally, rising prices can leave you disadvantaged against your competitors who offer lower prices. This can lead to reduced sales volume.

Switch to Merchant Service Providers That Offer Low Rates

Another cash discount program alternative is switching to service providers who offer lower rates. This is better for merchants who pay a lot for credit card processing.

When combined with a rise in product prices, you can cater to the credit card processing fees without directly passing them to the customers.

Set a Minimum Fuel Purchase Amount for Credit/Debit Card Purchases

Alternative to the cash discount program, you can set minimum card purchase amounts for your goods. For example, you can set minimum credit prices of $20 on your fuel.

This is a common method in fuel stations.

Cash Discounts Programs: Customer Reviews

Most businesses have adopted cash discount programs, making them familiar to most customers. As a result, customers have no problem using cash payments for their goods or paying a service charge when they use a credit card. Additionally, customers have acknowledged that the program is profitable to them just like it is for the merchants.

The program allows customers to save money while using cash and also prevent the rise of fuel prices. Additionally, customers are okay with paying service charges for credit cards. The wide acceptance of the program leads to increased use by gas stations and other businesses.


Cash discount programs are ideal for lowering card processing fees for your gas station industry. Additionally, these programs are easy to set up. A merchant processor representative guides you through the program setup. Additionally, the representative helps you choose a program that works best for your business. 

Before implementing the program into your business, it’s best to consider the factors we’ve discussed to determine whether the program is what you need. After implementing the program, ensure you post the necessary signage to ensure the customers know about the cash discount.

Cash discount programs are standard in the gas station industry. Therefore implementing the program has more odds of succeeding. Equally important, customers are aware of the program and its benefits. Consequently, they’ll comply with it through cash or card payments with a service charge. As a gas station owner, feel free to implement the program but ensure you follow the necessary setup steps. Feel free to learn more from our credit card processing resource library