We have a combined 50 years of experience in the automotive industry ranging from roles as the chief financial officer, finance manager, and principal owner. These roles led to the constant dissection of financial statements and methods to maximize revenue and reduce expenses in the industry. This uncovered the cash discount program.
A Cash Discount Program is a method of implementing a service fee to all customers who pay with a card while providing a discount to those who pay with cash. Cash Discount Programs are legal in all 50 states per the Durbin Amendment (part of the 2010 Dodd-Frank Law), which states that businesses are permitted to offer a discount to customers as an incentive for paying with cash. While this type of program has been used by gas stations for years now (displaying cash prices), there is still confusion on how to implement a Cash Discount Program the right way.
The Cash Discount Program allows the merchant processor to pass on the increasing expense of credit card processing to the consumer. Essentially it is a price increase that is not passed on to the customers paying cash. This process when implemented correctly is legal in all 50 states.