Dual Pricing | FAQ
WHAT IS THE DUAL PRICING PROGRAM?
This program is a way for merchants to offset most of the costs associated with card processing fees. Offer your customers a credit card price and a cash price to complete the transaction at the point of sale. This program rewards customers that pay with cash.
IS THE PROGRAM LEGAL?
Yes, cash and credit prices are legal in all 50 states. The Dodd-Frank Act prohibits payment card networks “from inhibiting the ability of anyone to provide a discount for payment by cash, check, debit card or credit card”.
WILL THIS PROGRAM COMPLETELY ELIMINATE MY BILL?
Almost. Some merchants will still see some small ancillary fees on their bill depending on the type of transactions they process. For example, if you process EBT (SNAP) benefits cards you will still have to pay authorization fees for those cards. In addition there will be a small monthly service fee shown on your monthly bill.
HOW IS THIS DIFFERENT FROM A SURCHARGE?
The Surcharge carries with it several stipulations:
» Only credit cards may be surcharged – no debit cards
» Signage must be posted for at least 30 days prior to implementing a surcharge alerting your clientele
» There is a 4% maximum that can be imposed
» Surcharging is only allowed in states where the program has not been excluded
With the Dual Pricing program, these limitations are not in place, as you are not implementing an additional fee for accepting a credit card, you are providing a discount for those who pay with cash. This is a clear distinction, and one that Visa, MasterCard, and the courts have agreed upon:
In a Dual Pricing program, all prices in your store consist or a cash price and a credit price. The posted prices are your cash price.
As Mitchell Katz, spokesman for the Federal Trade Commission, said in May of 2011: The Dodd-Frank law prohibits a payment card network such as Visa “from inhibiting the ability of anyone to provide a discount for payment by cash, checks, debit cards, or credit cards,” said Katz.
WILL CUSTOMERS DISLIKE THE IDEA OF A PRICE FOR CASH AND A PRICE FOR CREDIT?
If you explain that the DUAL PRICING program is a way for you to keep providing quality goods and services without increasing your overall prices, most consumers have indicated they understand and are fine with it. While nobody wants to pay extra, more and more consumers are starting to realize just how expensive it’s been for merchants to accept credit cards. Dual Pricing allows you to stay in business and keep your overall costs lower, it’s a small price to pay.
WHY DID CARD ISSUERS CHANGE THEIR RULES FOR CASH DISCOUNTS?
As a result of a court approved settlement with merchants, Card Issuers agreed to modify their rules to permit U.S. merchants to discount goods and services for customers paying in cash.
WHAT ARE THE POINT-OF-SALE DISCLOSURE REQUIREMENTS FOR MERCHANTS?
A merchant must prominently display a clear disclosure of the Merchant’s pricing policy at the point of sale. The disclosure must include a statement that products and services have been discounted for cash and if paying by credit or debit card the regular price will be displayed on the receipt.
CAN I REVERT BACK TO TRADITIONAL PROCESSING?
Absolutely! If you feel the dual pricing program is not a fit for your business we can easily switch you back to traditional credit card processing. We will even beat the rates you were paying with your old processor by putting you on an interchange pass-through program.