Should I Offer A Cash Discount?

Whilst you might be wondering if you should offer a cash discount or not, the answer is yes, but only if you are in the right place at the right time and have the right product to offer it on.

Cash discounts are offered when a customer purchases an item for less than the current price. The discount can be anything from 5% to 50%, depending on how much of a deal you want to give your customers.

Cash discounts can be used by any business that offers products or services that can be paid for with cash. For example: A car repair shop may offer a $50 discount if you want your vehicle fixed today.

Or, a restaurant may offer a $1 discount per person if you order lunch now instead of waiting until dinnertime.

So, let’s take a look at cash discounts in more detail. 

Why Do Businesses Offer Cash Discounts?

A cash discount is usually offered because the business wants to encourage people to buy their products or services before they go out of stock. This way, they get as many sales as possible.

It also makes sense to offer them a discount, because it means the consumer has already shown interest in buying their product/service.

If there is no need to sell the product/service before going out of stock, then why would you offer a discount?

Well, maybe you’re offering a promotion where you will give away free gifts if you purchase something else. Or perhaps you’re selling a limited edition product.

How Can You Use Cash Discounts Effectively?

The best thing about cash discounts is that they are very easy to use. All you have to do is add a line to your website saying “Get 10% off this week” or whatever you decide to call it.

You don’t even need to mention what the discount is for – just make sure it’s clear enough so that anyone who visits your site knows exactly what they are getting.

You could also include some sort of coupon code that you send to your email list. It doesn’t matter whether you send the code via email or post it on your website, as long as everyone gets it.

When Should You Offer Cash Discounts?

There are two main times when you should offer cash discounts. These are:

 

• • Before a Sale Starts

• • After a Sale Ends

Let’s talk about each one separately.

Before A Sale Starts

This is probably the most common reason businesses offer cash discounts. If you’ve got a sale coming up, you’ll want to start promoting it early.

For example, say you’ve got a new range of shoes that you are launching next month. You’d want to promote them well before they launch, so that you get as many sales as you can.

One way to do this is to offer a cash discount. So, if someone buys a pair of shoes from you today for $100, you could offer them a $10 discount within a certain amount of time. 

Of course, you’ll need to make sure that the cash discount isn’t too big. But, if you set the discount low enough, and you advertise it well, you’ll see a lot of sales.

After A Sale Ends

Sometimes, a customer might not know when a sale ends. But, you might still want to offer a cash discount after a sale has ended.

For example, if you were selling a certain type of phone case, you might offer a 20% discount on all cases purchased between January 1st and March 31st.

This way, you can keep customers happy by giving them a good deal while they wait for their phones to be delivered.

When Not To Offer A Cash Discount?

Cash discounts aren’t always effective. In fact, they can actually hurt your business. Here are three reasons why:

They Make Your Customers Feel Like Scammers

Cash discounts are often used by businesses to trick potential customers into thinking they are getting a great deal.

But, if you really think about it, how does offering a discount make you look like a legitimate business?

If you are going to be offering cash discounts, make sure it isn’t all the time.

This way, customers are more likely to take advantage of the discount, and understand that it is a genuine way for them to save money on a product or service. 

They Are Too Easy to Get Away With

Another problem with cash discounts is that they can easily be abused. After all, if people can buy something at half price, then why would they bother paying more than that?

So, if you are planning to offer a cash discount, make sure that you have a system in place to ensure that only real customers receive the discount.

Otherwise, you risk having lots of fake accounts being created to abuse the system.

They Don’t Work For Everyone

Some people may feel uncomfortable with the idea of receiving a discount without paying anything upfront.

And, there are other types of customers who will never take advantage of a discount unless they pay in full first.

So, if you’re going to offer a cash discount, make sure you understand what kind of person you are targeting.

Final Thoughts

Offering a cash discount is a great way to boost profits for your business, however, there are a few things to consider first. 

One of the things to consider first is to decide how much you want to discount, but without overdoing it – you don’t want to discount the product or service so much that you do not receive any profit. 

You also want to make sure that scammers are not taking advantage of the discount. You should be mindful of how many products are being bought by a similar address and credit card. 

Finally, make sure that you don’t make your customers feel bad about getting a discount. Not everyone loves a discount, as strange as that sounds.

This means you will want to be mindful of the type of customer that you are discounting. Make sure to also visit our full payment processing toolkit.