A discount for cash is a reduction in price offered to customers who pay using cash instead of a credit or debit card. It allows businesses to avoid credit card processing fees and pass those savings on to the customer. The advertised price includes the cost of card fees, and the discount is applied only when the customer pays with cash.
Instead of risking fines and card network violations associated with surcharges, businesses can legally and safely offer a discount for cash. This method is:
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Keeps pricing transparent by offering a discount for cash rather than adding a fee.
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Avoids negative customer perception of being 'penalized' for using cards.
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Legal and compliant in all 50 US states and all countries.
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Makes marketing easier: 'Save with cash!' sounds better than 'Pay extra with a card.'
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Allowed on both credit and debit card transactions
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Free from registration with Visa and MasterCard
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No in-store signage required.
To do this, businesses should first increase the prices of all services, classes, memberships, packages, and inventory items. This ensures the cost of processing is factored into every sale. Once the new pricing is set, businesses can then offer a discount, typically the same percentage as the price increase, to customers who choose to pay with cash. This setup enables businesses to offset processing fees without penalizing customers who pay with cash.
After the price increase, the next step is to create a preset discount in Vagaro, such as “Discount for Cash,” and apply it across all relevant items. Separate discounts may need to be created for products, memberships, and packages. When a customer pays with cash, staff can apply this preset discount.
Note
We recommend following the instructions below on a computer or tablet because creating a preset discount is not available on the phone.
To cover credit card processing fees, you’ll need to increase your prices, then offer a discount to customers who pay with cash. This requires updating the prices in your inventory, service and class menu, memberships, and packages.
To update your pricing, check out the following articles on how to edit each item:
After increasing your business's prices, you'll need to create a discount that applies to all items at your business. A discount can only be created on the computer, tablet, PayPro, or Pay Desk version of Vagaro.
To create a preset discount:
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Select Settings
→ .
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Select New Discount.
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From the New Discount screen, enter a Discount Name, like "Discount for Cash", then enter a Description.
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Scroll down to the bottom of the screen, then select Add.
All your services, classes, and add-ons will appear in the popup.
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In the popup, select → .
All your services and classes will be grouped together so you can enter a single discount for all of them.
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In the table with all your services and classes grouped together, enter a percentage-based discount based on the amount you increased your services by.
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Optionally, if you sell products at your business, select the Products tab and repeat steps three to five.
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Save Save
Note
The steps above covered how to create a discount for cash for services and classes. If you sell memberships and packages, see Create a Discount for Things You Sell to learn more.
After creating the preset discount, you can then apply the discount whenever a customer comes in and pays with cash.
To apply a preset discount:
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Go to the Checkout
screen, or check out the customer directly from the Calendar.
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Select a customer and add items to their shopping cart.
Note
For existing appointments or classes, the customer is already selected and ready for checkout.
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Next to Discount, select Add, and then select the "Discount for Cash" preset discount
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Select Done to return to checkout.
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Complete the checkout.
To apply a preset discount:
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Go to the Checkout
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Select a customer and add items to their shopping cart.
Note
For existing appointments or classes, the customer is already selected and ready for checkout.
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In the Apply a Discount or Fee list, select the "Discount for Cash" discount.
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Complete the checkout.
Comments
5 comments
I have considered offering a discount for cash. However, if I raise prices by 3% and offer a 3% discount to the customer for cash, doesn't my commissioned employee lose out by the 3% being deducted from the service cost? in order for them to break even, would I need to raise my prices by 6% and offer the 3% cash discount?
Hi Suzi,
This depends on how your commission structure is set up. There's actually a setting in Payroll Configuration that deducts discounts from commission. If you don't want to do this, you can just turn that setting off.
Thanks, Jamie
Hi Jamie, but can you tailor it to a specific discount? That would be the only one I’d want to turn off the setting for.
Hi Suzi, no, there isn't a way to do that currently. However, you actually don't need to raise prices by 6% — a raise of roughly 3.09% is enough for your employee to break even on cash transactions. Here's why: if you raise prices by 3% and apply a 3% cash discount, the cash price works out to about $99.91 on a $100 service, so the employee only loses about $0.09 in commission — essentially nothing. Raising to 3.09% makes cash a perfect wash, while card-paying customers generate a small commission gain for the employee. The 6% figure would actually overcompensate, leaving the employee ahead on both cash and card transactions.
Thanks,
Jamie
Thank you for this explanation!
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