Finding the right balance between prices and profit is one of the key factors of a business’s success. With the advancement in payment methods, customers prefer credit card payments. But this method is not suitable for business owners. This is because card payment processing costs are increasing day by day and have become a hurdle in the way of business growth.
The only options for the owners are to either raise wine prices or embrace other forms of payment. And with the cash discounting program, the alternative is at their doorstep. A customer can save money by paying in cash through this program, though credit cards are still accepted.
This article mentions all the facts and figures of the cash discounting programs. It also discusses the step-by-step guide for setting up the program for wine stores. Let’s get right to it!
Cash Discount Programs: What Are They?
As a business owner, you always hear about cash discount programs here and there. Business owners are increasingly offering discounts to customers who pay with cash due to the rising cost of accepting credit cards. Previously, cash discounts were only offered at gas stations, but today, these long-term solutions are accessible to everyone.
Basically, in a cash discount program, credit card processing fees are added to the customers’ bills. So, the customer pays the processing fees instead of the shop owner. At the same time, those who pay with cash receive immense discounts. This helps business owners save money and simultaneously increase their profit.
Furthermore, cash discount programs are easy to start. All you need to do is find a payment processing provider and get a proper cash discount signage. This program is ideal for small businesses and allows them to focus on their growth without constantly stressing about money.
The Benefits of the Cash Discount Program
No one can deny the benefits of cash discount programs. They are easy to implement and much easier to run. The most common benefits a wine store owner can get from this program are given below.
No Need to Worry About Debit and Credit Card Processing Fees
With this program, you do not need to worry about any transaction fees. Even when the price increases in the near future, it will not affect your savings in any way, as the debit and credit card processing fees are added to the customers’ bills. Even if they pay through cards like Amex, etc., you don’t have to worry about the extra expense because the system will cut the fees from their account instead of yours.
Save Money by Not Paying Extra Fee
Since you are not paying the credit card processing fees, you get to save tons of money. And this was the sole purpose of cash discount programs. This will allow you to grow your business, and you might as well rent a place in the main market. With the cash discounts, more and more customers are encouraged to pay in cash which helps you make more profit.
Cash Discounting Brings More Customers
Many times, customers order wine from a third-party delivery company and do not physically visit the shop. Because of this, they are not aware of what you have to offer in the store and can’t check the condition of the wine. In contrast, a cash discount program will encourage more customers to visit your store in order to take advantage of the discount and learn more about your store. If more people buy, the wine store will become more well-known and profitable.
Chargebacks? No Longer an Issue
Oftentimes a customer comes back after a few days to return a product. And being a small business owner, there is nothing more frustrating than dealing with chargebacks. But with the cash discount program, more customers pay with cash instead of a card. This reduces the percentage of chargebacks and helps you retain more money.
Receive Full Amount
Having to wait for days for your funds to be transferred to your bank account has to be the most annoying thing. When there are no hiccups in the system, it may take up to 24 hours for the money to show up in your account. However, you may have to wait longer than a day if the system is sluggish.
Furthermore, if the weekend arrives, you can go on a holiday and return because that is when you will be receiving your funds. But with the cash discount program, the customer pays with cash which comes straight to your hands. This cuts out the waiting part and makes the business a lot easier.
Easy Setup
The most crucial part of a program is the setup because if something goes wrong at this stage, the whole program might fail. But with the cash discount program, you do not have to worry about the setup. Setting up this program is very easy and can be done within a frame of a week. With just a few steps, the program is all set for you to use.
Furthermore, the equipment is also easy to use. Even if you do not understand anything, you can contact your program provider, and he will come and give you a brief explanation of the details of the equipment. That said, the cash discount program is the most reliable method of saving your business from increasing credit card processing fees.
Challenges Facing Wine Businesses
Running a business is not at all easy. And if you are running a wine store, it can get really hectic and tiresome. There are many problems owners have to face while trying to run their businesses at a smooth pace. A list of some common drawbacks liquor store owners face is as follows:
Finding Trustworthy Employees
Employees are the spinal cord of a shop/business. If you take them out, the structure won’t stand long enough. And finding trustworthy employees is a big task. Everyone is in need of money, but there are a few who actually work hard for it. Over the years, our lifestyles have changed, and so has our mindset. The new generation often looks for quick ways to earn money.
Working in a store requires a lot of patience and strength. But there are people who are willing to work hard for even a small amount of money. It is difficult for the owner of a small business to pay out large salaries to their employees. Thus, it is a major problem to find competent workers.
Cost-Push Inflation
In the last few years, dynamic changes have occurred around the whole world. Among these changes, inflation stands on top. With the surge in prices, it is impossible to buy wine from manufacturers at the old price. And the public does not approve of the current rate. It’s like the businesses are trapped from all sides, and there’s no way out.
Despite various methods, it has become impossible for businesses not to increase their costs. This creates a conflict between the owners and customers. But in order to ease things, methods like the cash discount program are of great help.
Gaining Popularity
In order for a store to run successfully, gaining popularity is important. And that can’t happen without social media. Increasing your reach and engagement through social media is never easy. It requires a lot of ideas, creativity, effort, and time.
For instance, if any customer does not like your product and leaves a negative review, it will influence your reputation on the platform putting your business at great risk. Apart from that, you have to pay for the promotions and giveaways, all of which are cut from your profit. So it is not easy to do marketing.
Nevertheless, the cash discount program is your best buddy in such crucial times. Having a smart manager will help you with the discounts you offer. You can grow your business at great speed with this program. All you need is a trustworthy merchant account provider and employees.
Are Cash Discounting Programs Worth It for Wine Stores?
It all depends on how well you use the program. The benefits of the program are listed above, and anyone can know from them that the cash discount programs are worth it.
They allow the owners as well as the customers to benefit from the program. And with a small fee, you can open your merchant account and receive your pos system and all the equipment you need.
The provider will also train your staff and guide them whenever needed. The program also helps in gaining popularity as customers visit your store personally, and then the word spreads like a forest fire. So it is a long-term commitment and can help your business grow immensely.
With that said, you need to consider a few things before implementing cash discount programs:
The Necessity for Cash
You can put off introducing a cash discount program for your store if business is brisk and you are unconcerned about credit card processing costs. However, the cash discount program can be what you need if you’re a small business owner trying to save money or want to regularly have cash on hand to handle the day-to-day costs in your wine store.
Type of Customers
You must assess the types of people who frequent your wine business. Do you already have more clients who pay with cash, or do most of them use credit or debit cards? With this knowledge, you can choose the best course of action.
Step-By-Step Guide for Setting Up a Cash Discount Program for Wine Stores
The most difficult part of any program is the setup. It sets the basis of a task, and everything you do in the future will rest on that foundation. Similarly, the setup for the cash discount program is a crucial part. Nonetheless, it is surprisingly simple to set up.
The following is a step-by-step guide for setting up a cash discount program.
- Locate a trustworthy merchant processor who is an expert in the program
- Get in touch with them and ask for the details of the program
- Apply for the program which suits you and wait for the approval
- Decide all the POS systems your business requires
- Wait for the equipment to arrive at your location
- Allow the merchant processor to come to your location and set up all the equipment
- Start saving money
Make sure that your representative briefs your employees regarding the basics of the program. Also, double-check the equipment to ensure it has no issues. This will save you from many complications in the future. After the program has been successfully installed, the customers can choose their payment method.
The transaction fee will be added to their bill if they choose to pay with a credit card. On the other hand, if they choose to pay with cash, they can enjoy several cash discounts. This helps the wine stores to make enough profit to keep their business growing.
What Do Wine Stores Need to Set Up a Cash Discount Program?
When setting up this program for your wine shop, you must make sure you are in compliance with all applicable state and federal laws. In addition, make sure you are not violating the rules that credit card companies have established. The cash discount program has few restrictions and is simple to set up. Just make sure to display signs informing your clients of the launch of this program.
Alternatives to the Cash Discount Program for Wine Stores
While cash discount schemes can increase your revenues and help you save money, your wine business can also benefit from other strategies. To reduce your transaction expenses, you can consider contacting a service provider with reduced processing rates. Setting a limit on credit card purchases is an alternative if this is not an option for you. In the same vein, you may raise the costs of the drinks you offer, but tread carefully, as doing so could irritate some clients.
Conclusion
The cash discount program is the doorway to success for small businesses. It allows the owners to save money by not having to pay several kinds of fees and duties related to credit and debit cards. Furthermore, as the customer pays with cash, they most probably visit your store, and this way, one more milestone is achieved. The number of customers that pass through your door makes a big difference, and the cash discount program helps make this difference.
With this, our article comes to an end. We hope this article helped answer all your questions regarding wine stores. Make sure to follow the steps mentioned carefully. Happy Shopping!
As always, don’t forget to read our other articles on payment processing here.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.