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Guide to the Cash Discount Program for Jewelry Stores

Maintaining a balance between profit and sales is the most difficult part of any business. Consumers can choose their desired mode of payment and buy items, even if they have to pay some service charge.

Most people prefer card payments, but it poses great challenges for small business owners. The main downside of using credit card processing is that they have high processing fees, so retailers have to bear the additional service fee for each transaction.

To cover the extra expense, jewelry shop owners can either increase the prices of their products or keep paying the high service fee. The alternative is to set up a cash discount program for your company.

Cash discounting is a simple and easy method of encouraging customers to pay in cash and receive a discount on the posted price.

This article discusses the benefits and details of such programs that will help you make an informed decision.

What Are Cash Discount Programs?

Consumers are immediately attracted to special discounts on posted credit. A cash discount program increases the cash influx of a company by allowing customers to pay cash upfront. Simply put, customers pay cash and get a discount. Merchants benefit from this since it eliminates the credit transaction fee and gets more profit on each sale.

A cash discount means that the prices of certain services or products get reduced when the customer pays in cash. Companies use cash discounting to boost sales, attract customers, and increase profits. Businesses receive full payments, whereas there is a service fee included with credit card transactions.

Cash discounts reduce processing costs, which reduce the cash income for businesses. The customer does not have to pay this cost, but your business loses little money at each transaction. Thus, a cash discount program is beneficial for both merchants and customers.

What Are the Benefits of Cash Discount Programs?

Let’s look at some advantages of using a cash discount program.

Low Credit Card Processing Costs

The biggest benefit is that merchants don’t have to pay the payment processing fees associated with card transactions. Since the customers are paying cash, you can enjoy the benefits of cash discounts and low payment processing costs.

Instant Access to Funds

Many customers pay with credit or debit cards, so offering discounts encourages them to pay in cash. By accepting more cash payments, your profits will increase since processing fees are eliminated.

Reduced Chargebacks

Another benefit of switching to cash discount programs is that your chargebacks decrease as well. Chargebacks are bad for a merchant account as they put funds on hold or may result in account closure.

Cash Discounts

Offering discounts is a big incentive to cash customers. A cash discount program encourages them to pay in cash in exchange for a discounted fee on the posted price. Customers are drawn into saving money on purchases, so they opt for cash payments instead of card payments. Moreover, customers can avoid convenience fees charged by the seller.

Constant Profit Margin

Business owners have to pay certain processing fees for all credit card transactions. It creates instability in profit margins. A cash discount program helps you keep stable profit margins since the processing fees are eliminated.

Challenges of the Jewelry Industry

Guide to the Cash Discount Program for Jewelry Stores

Talented artisans in the jewelry industry create beautiful fashion accessories from stones, gems, and metals using special techniques. It is an age-old industry with deep roots in our history and the modern era.

Some players have been in this industry for a long time, making it difficult for new retailers to enter. New business owners face several challenges and barriers, but smart planning, a good strategy, and a deep understanding of the industry can overcome them.

Here are some of the challenges of the jewelry industry.

  • Understand the Challenges to Entry

All new businesses face certain barriers, especially in competitive industries. Only the strongest establish themselves for the long term in the market by surviving pressures and competitors. Merchants overcome these obstacles by paying certain fees and entering the industry. The barrier to entry includes distribution challenges, initial startup cost, specialized certifications and licenses, and brand equity.

  • Inventory Sourcing and Costs

Inventory cost is a big barrier all new merchants face when they enter the jewelry industry. Simply stocking the shelves of your shop will need billions of dollars, depending on the size of the shop. Also, if you are using rare gems and stones in your crafts, procuring those materials can be challenging since suppliers usually have contracts with existing merchants. Retailers can sidestep this barrier by sourcing materials from third-party distributors, which decreases profits.

  • Overcoming Firmly Established Brands

Existing brands have already made a name for themselves in this industry and have a wide customer base. Customers stay loyal to trusted brands, so proving yourself as equally good or better is challenging. 

Jewelry retailers focus on quality, meeting customers’ psychology and high demands. New retailers should consider all these aspects and give them a reason for investing in your shop instead of a competitor’s.

  • Investment and Risk of Loss

Jewelry retailers must fulfill all infrastructure requirements like others, including display cases, storage areas, shelving, and point-of-scale systems (POS). Additionally, they need high-grade security to prevent thefts and robberies, which can result in a loss of millions of dollars. 

The security cost includes safes, cameras, guards, and electronic surveillance of windows and doors. The security infrastructure often costs the most and should be taken into account. Even if you employ state-of-the-art security systems, there is still a risk of losing valuable inventory.

Why Do You Need a Cash Discount Program for Your Business?

Before you switch to a cash discount program:

  1. See if your business really needs it or not.
  2. Recall the program’s benefits and see if it applies to your business.
  3. Ask yourself the following questions.

Do You Need Cash Payments?

Cash discounting will increase the cash flow, and merchants will receive cash without losing credit card processing fees. It might seem appealing, but see if your business needs a cash payment method and has the means to deal with the influx of cash.

When you have more cash payments, you need more time to count them and take them to the bank. Moreover, it makes you vulnerable in front of employees or thieves who may keep an eye on your shop to make quick cash.

How to Get Started With a Cash Discount Program?

Guide to the Cash Discount Program for Jewelry Stores

Starting a cash discount program for your shop is quite easy. Follow the following steps.

  1. Find a merchant account processor who is familiar with the discount program.
  2. Get in touch with a representative who will walk you through the entire program before applying.
  3. Select all the POS equipment you need and set it up in your shop.
  4. Save money.

Cash discounts are good for both customers and merchants. Customers can choose their desired payment method. If someone pays with their credit card, they must pay the full sales price. However, they will receive a discount if they pay via cash.

All consumers can benefit from the discount and save some cash. Retail owners get more profit from sales since there are no card processing fees.

Required Cash Discount Signage

As a business owner, you can opt for a discount program only if you post signage informing customers of the discount they will get. Credit and debit card brands have set this mandatory requirement for merchants.

Your merchant provider will give the initial signage, and merchants must post it for customers to see. The signage briefly explains the discounts they will receive on cash payments instead of credit card payments.

What Do Jewelry Stores Need for Cash Discount Programs?

First and foremost, your jewelry business must comply with federal and state laws. Business owners should keep credit card policies in mind for a discount program. Your merchant service provider will help you comply with the laws and set up the program.

Setting up a cash discount program does not need special equipment, and it is very easy to set up. An expert can program the POS system or credit/debit card terminal to add the cash discount upon checkout. The manual calculation of discounts is riskier, and there is room for error, so it is better to use an automated SS.

Your shop should have clear signs and posters that tell customers about the cash discount program. Proper signage is mandatory and required by card companies when setting up the program for your shop.

Trained experts and professionals ensure that the program runs smoothly and that customers get discounts. Although automated systems will automatically add the discount, having employees on standby who are familiar with the program is better.

What Are the Alternatives to Cash Discount Programs?

A cash discount program is an effective and easy way of bringing in full cash on each sale by cutting off additional fees linked with credit card processing. There are several alternatives to these programs, and they are listed below.

Low-Cost Service Provider

The easiest alternative is choosing a service provider with low processing fees. This option is good for retailers still determining how they can benefit from discount programs. You can slightly increase product prices to cover the extra fee.

Minimum Purchase Amounts

Customers can use credit or debit cards only if their purchasing cost is over a certain limit, for example, $10.

Increased Prices Cover Processing Fees

This method is implemented by many businesses where you sell a product by increasing the price to make up for the processing fees. During checkout, the customer pays the card service fee back. There is a chance that cash-paying customers may not like the price hike and will go to a competitor store instead.

Customer Reviews: Is a Cash Discount Program Worth the Hype?

Guide to the Cash Discount Program for Jewelry Stores

New businesses establish themselves in the market after putting in their blood, sweat, and tears. However, sales and customer reviews determine whether the business is worth its time and money.

One of the things that attract new customers is cash discounting since it builds on the idea that you will save money if you simply pay in cash. Most customers don’t have a problem with such programs and pay cash upfront.

A cash discount program is beneficial for both merchants as well as consumers. By paying in cash, customers can save money, and you don’t have to increase the prices of your jewelry products.

Economic uncertainty drives customers to avail discounts wherever possible; thus, they will use cash discount programs without complaint.

Loyal customers embrace such programs by jewelry stores. Even if you are running a new business, you have more chances of getting customers and building a strong client base than if you don’t have a discount program.


Many businesses and high-risk merchants are using cash discounting to avoid paying the processing fees of credit and debit cards. The program has several benefits, such as increased profit, greater cash flow, no hidden fees, and more.

Ask yourself if you need a discount program for your company. Factor in all the benefits and see how you can increase your profit on each sale.

Once you have decided that you need the program, choose an expert merchant processor since he will walk you through the entire process and help you set up the discount program for your jewelry business.

Select the required equipment and post the required signage since it is your duty to inform customers of the program and a requirement by credit card brands. Hire trained professionals who can work with POS systems and discount programs.

Cash discounting will help you reach more customers and spread brand awareness to enjoy increased profits in your jewelry store.

To round out your knowledge on the topic, make sure to visit our resource library on payment processing