The idea of restaurants implementing Non-Cash Payment Programs is not new, but it has left restaurant owners wondering if it would be the best decision based on potentially negative customer perception. Before thinking “absolutely not, I would not do that”, have a better look into what these programs are, what they offer and how it can help you reduce expenses.
Businesses that accept credit cards have several options to help offset credit card processing expenses; which are similar to how pricing works at gas stations with a cash or credit price. These options enable the guest to choose their preferred payment method and associated pricing. The available program options are Cash Discount, Non-Cash Adjustment & Surcharging. New Rules and Laws allow businesses to legally share these processing fees with customers, as long as they do not exceed 4% of the cost of the guest check.
To determine if one of these programs would fit into your business model, below is more in-depth information on each program.
Cash Discounts
A cash discount is when a business offers a discount off the posted price to customers who pay by cash, check, store-branded gift card or PIN debit card. The price posted would be the credit card price and a customer paying in cash would receive a discount from the posted price. With this program, the business cannot charge a customer a Non-Cash Adjustment or Surcharge for using a credit card – the posted price is the credit card price. The receipt must show a discount being removed for customers paying with a cash payment type.
Surcharge
A surcharge is when a business applies a fee to a customer who pays with a credit card, excluding signature and PIN debit cards. Signage must be posted at the entrance of the business and near the POS system. The posted prices are cash prices and the surcharge will be applied at the register. For NY businesses, you must post cash and credit prices for each item. The receipt must show a “Surcharge Fee”, which cannot exceed 4% of the cost of the guest check (of course, it can be a lower % or a set amount).
Non-Cash Adjustment
A Non-Cash Adjustment is very similar to a surcharge program, and a business’ list prices have a built-in cash discount incentive – meaning the posted prices are the cash prices. Additionally, like a surcharge program, signage must be posted at the entrance of the business and near the POS system. In all states which allow non-cash adjustments, the cash and credit card prices must be posted for each item. Customers who pay with credit and signature debit cards will see the cash price on their receipt, along with a Non-Cash Adjustment “Fee”, which again, cannot exceed 4% of the cost of the guest check (also can be a lower % or a set amount).
The options and rules regarding Cash Discounting, Non-Cash Adjustment and Surcharging are complex and change frequently. They are impacted by both the rules set by the card brands (Visa, MC, etc), as well as state laws. At Cervion we focus on providing the best technology, and partner closely with our preferred processors to provide our customers with the best processing program options.
So, before you take these options off the table, you should also consider that recently several of our customers have successfully implemented these programs and are saving thousands of dollars annually. Since they have the proper signage, customers were not blindsided by these fees on their receipts and generally customers have become very understanding, especially due to the current environment.
For a better understanding of what each of these programs has to offer, how you can reduce some of your processing expenses and determine if they are a good fit for your business, schedule time to speak with one of our team members by emailing us at sales@cervion.com, calling 877.476.7246, or clicking the link below.
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Cervion Systems is a Point of Sale provider with offices in New York, Pennsylvania, and South Florida. Founded in 1996, with over 20 years of professional POS service experience, Cervion is the leading value-added reseller (VAR) offering restaurant Point of Sale (POS) systems. Cervion provides restaurants and bars with local sales and service, modern Apple iPad point of sale systems and affordable programs for new and existing restaurants. Please contact Cervion Systems at (877) 476-7246 or sales@cervion.com.
