The Cash Discount Program, explained

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Step by step in writing: Cash Discount Program

Transcript

Run a card for a four hundred dollar pump-out, and about twelve dollars of it never reaches your bank. Do that all month, every month, and it adds up to real money. The Cash Discount Program stops that fee from coming out of your margin. Here's how it works. Every quote and invoice lists one price, and that price already covers card processing. Right under the total, a green box offers the cash price. Pay by cash, check, or bank transfer, and the processing cost comes back off. So the card payer covers the fee, the check payer pays your normal price, and you take home the same amount either way. It lives under Settings, Finance, Cash Discount. One switch turns it on. From then on, every new quote and invoice carries both prices. Program configuration holds the rest. The pencil opens it for editing. The first question is about the prices you charge today. For most companies, the answer is Raise my prices to cover card processing. You keep typing the prices you're used to, and PortaPro lists them at the card price for you. The other choice says your prices already include the card fee. Pick it only if that's true. If it isn't, every cash customer gets a discount straight out of your margin. Next is the discount rate, and you'll notice you can't type it. It's locked to what a card payment really costs on your account. On PortaPro's flat rate that's two point nine percent. On Stripe's standard pricing it's two point nine percent plus thirty cents. If your processing ever changes, the rate follows on its own. And the math is exact. Raising a price three percent and then taking three percent back never lands where you started. So the card price is worked out backwards from your price, and the fee comes out to the penny. Now choose which payments earn the cash price. Cash, check, and bank transfer are right there. You can add your own, too, like Zelle or Venmo. Debit cards are left off on purpose. Nothing can tell a debit card from a credit card at the moment it's charged, so that discount could never really be earned. Last is the disclosure. This sentence prints on every quote and invoice, and it updates itself as you add payment methods, until you write your own. The question everyone asks is whether this is legal. How It Works covers it. Cash discounts are allowed by federal law, through the Cash Discount Act of 1981, and the Durbin Amendment stops the card networks from interfering with them. They're legal in all fifty states, and there's nothing to register with the card brands. A surcharge works the other way around: a lower price, with a card fee added at checkout. Surcharges are banned in some states, capped by Visa, and never allowed on debit. Here, the listed price is the regular price, and paying another way earns a discount off it. Because the rate is tied to your actual cost, a card payer never pays more than the card costs you. The one rule everywhere is showing both prices before the sale, and your disclosure takes care of that. For anything specific to your state, check with your accountant or attorney. Sales tax follows the price that was actually paid. A cash payer's discount works like a store coupon, so it lowers the taxable amount, and PortaPro figures each side for you. If your customers aren't taxed, the numbers simply stay whole. Back on the invoice, the green box names exactly how much they save, and which ways of paying earn it. Each document keeps the cash price it was created with. Change a setting next month, and nothing you've already sent moves. And on your online payment link, the customer picks card at the listed price, or bank account at the cash price, before they pay. When a check shows up in the mail, record it with Collect Payment. Both prices are right there. Choose Check, and the cash price is filled in for you. The discount is applied once the payment settles the invoice. A partial check counts at face value, and the payment that finishes it earns the discount. If someone mails the full card price, PortaPro asks whether to take it as payment in full or hold the difference as credit. Credit remembers how it was paid for. A season prepaid by check earns the cash price on every invoice it covers, while credit from a card pays the listed price. Some customers are on a negotiated contract. Exclude them from their own profile, and their invoices go back to a single price with no discount shown. To see whether the program is paying for itself, open Reports and the Cash Discount Program Summary. Month by month, it shows what the card price brought in, what processing really cost, and the discounts you gave. Ready to start? Turn it on, glance at your rate, and send customers a short note: prices now include card processing, so pay by cash or check and it comes right back off. Invoices you've already sent stay exactly as they were.

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