Pay in cash, get a discount

Thanks to the results of a lawsuit, consumers who use cash will be reaping better discounts at more retailers.

By Smart Spending Editor Jul 9, 2013 11:01AM
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MSN Money PartnerAmericans who prefer paying with cash, rather than credit cards, are likely to see a larger amount of discounts coming their way in the near future thanks to new rules that allow for greater flexibility among businesses in this regard. Already, many companies have started putting the new allowances to use.

Money clip with cash © NULL, Brand X Pictures, Getty ImagesA settlement between Visa and MasterCard and a number of major retailers and industry groups allowed participants in that agreement to begin allowing consumers to receive discounts of as much as 4% when paying with cash, rather than credit or debit, according to a report from the Washington Post. This was already very popular among gas stations, but has now branched out to a larger number of other types of stores as well.

However, the practice is more popular in some states than others, especially because 10 states across the country simply do not allow companies to charge more for credit card use, by law.

Other companies may be a little wary of the practice simply because of the large amount of credit and debit purchases they process; even with the added fees they have to pay to processing companies, it might be worth it to continue accepting all transactions at the same price.

“Retailers offer cash discounts because they want to reward customers for taking [transaction] costs out of the system,” Jeff Lenard, a spokesman for the National Association of Convenience Stores, told the newspaper. “But the challenge is, do people even carry cash anymore? It’s uncommon that they do.”
In addition, there may be other headaches as well, because the settlement is with Visa and MasterCard only, meaning that their branded cards would be the only ones to which the higher prices could be applied, the report said. This means American Express and Discover cards must be treated the same way, and that could lead to difficulties in determining how these pricing structures would work.

Many major chains, including Target, McDonald’s and Home Depot say they will not apply these surcharges for these reasons.

This settlement has been at the center of controversy more or less since it was agreed to, as many major retail industry participants say that it will allow Visa and MasterCard to once again engage in practices that are unfair to businesses once a period of reduced payment processing fee rates expires.

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Jul 9, 2013 2:16PM
I carry, almost, only cash. I own a business and we have started giving a 10% discount for cash purchases. With all the transaction fees, billing fees, statement fees, and just the 2.00% that the credit cards take it works out better for our small business. I am seeing more and more of this among small businesses.
Jul 9, 2013 2:04PM
uncommon to carry cash?  This guy needs to widen his circles
Jul 9, 2013 1:27PM
I got rid of all credit cards, only have my debit card or pay cash. Credit cards are a rip off for both the retailer and the consumer. high fees, hidden fees and they do not care if you can't manage your money as long as they get their cut. even entice in-experienced consumers with low intro rates that sky-rocket and if you manage to pay on time they give you a larger noose to hang yourselve with. Don't count on good will or great payment history when times get tough they just don't care.
Jul 9, 2013 1:40PM
Got 20 dollars off my box of fireworks this year and the same last year.
Jul 9, 2013 1:39PM
I always ask for a discount first then I ask how much if I pay cash. Almost always get a discount at a minimum get it tax free.

Jul 9, 2013 4:23PM
The credit card companies basically had a scam going regarding their contracts with business owners.  As a business owner, when you agree to take visa/mc, you have to agree to their terms.  One of their terms was that you could not charge an 'upcharge' for using visa/mc.  (You could do the opposite, though, and offer a 3% cash discount.)

This basically forced business owners to build the 3% upcharge into all of their prices, thus making the wasted money invisible to the consumer.  I bet, without this misdirection, credit cards wouldn't be as widely-used as they are today.

I personally welcome this, as I pay cash for everything locally.
Jul 9, 2013 2:11PM
A buddy of mine knows how to play the credit card game good. But its not for me.
Jul 9, 2013 4:10PM
target gives a 5% discount when you use there credit card. I get the bill and pay it in full every time it is a win for me.
Jul 9, 2013 4:08PM
Jul 9, 2013 3:56PM
Doesn't always work.  Some companies make more money if they finance.  They don't want cash in full.  But, here is an idea.  If you don't have to have it, don't buy it!  You'll save money every time!!!
Jul 9, 2013 6:17PM
this guy must be from NYC or LA....don't carry is KING....I bought a suit two weeks ago. told the company I would pay cash what discount would i get....they looked at me like i had a 3rd eye. The manage came up and gave me a 8% discount on a 700 dollar purchase. I paid cash. beats the 2% cash back.....
Jul 9, 2013 4:11PM
It's only right to charge at least 3%  less to a cash customer as they do not cause the retailer to incur the 3% fee ( some are more) charged by credit card companies. I always ask for the discount on larger purchases and nearly always get it. I use the 3% figure because my credit card company charges 3%. The trick is you have to ask and to let them know you'll cancel the purchase unless the card service fee savings is extended to your cash sale. 
Jul 9, 2013 3:22PM
We don't have dental insurance, but our dentist gives us a discount by paying by check.
Jul 9, 2013 6:19PM
I get a five finger discount everywhere I go. Cant beat that anywhere else.
Jul 9, 2013 1:41PM
I don't want to ruin it but thier is a way to get good deals at the Kmart legally but maybe not ethically.
Jul 9, 2013 3:53PM
Backwards thinking. There's just as much cost in handling money that cards (e.g., bank fees for coin rolls & bundles of currency), and the risk of storing/transporting it.
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