Cash discount programs have emerged as an excellent way to control credit card processing costs across a variety of industries, but there are some rules about how they have to be structured. The federal law authorizing them lays out requirements for signage and communication that are a little confusing to some businesses without traditional retail storefronts. Auto repair shops especially have to adapt the advice in the guidelines to fit a very different environment, one that has many avenues for authorizing and invoicing services. Even when parts sales are a major piece of your business, they’re not typically lined up on shelves for browsing like they are in an auto parts store. Here are three steps to setting up your POS automotive system for cash discount programs.
1. Make Sure You Have the Equipment
Before you can set up a merchant cash discount program, you need a POS platform that supports them. The good news? Many credit card processors have outreach programs for establishing cash discount processing, which means they sell the equipment you need to get started. If your current POS does not allow you to set up easy cash discount shortcuts, you’ll need an upgrade. Signing a new service deal with your processor or switching services to one that has an incentive offer are both great ways to negotiate a discount, and with the right timing, you might even get a POS like the Clover Flex free to use as part of the bargain. Once you have the equipment, you just need to set up the cash discount rate based on your credit card processing costs.
2. Establish Clear Signage
The guidelines say that prices have to reflect the cost when charged to an electronic payment method, but you also need to have clear signage about the cash discount that explicitly states how much your customers save by paying with cash. Many repair shops accept checks from customers as well as cash, and most include them in the cash discount because they do not have the fees associated with processing that credit cards do when they are deposited manually. If your business uses ACH processing or other forms of instant check processing, you may have charges that are similar to credit card processing charges. If so, your signage should make it clear where you stand on personal checks.
It’s as easy as putting your labor rate up front on a sign and including and extra sentence about the cash discount rate and the personal check policy. Just make sure it is clearly visible to customers on site.
3. Train Your Staff
After setting up a Clover credit card machine or similar device to automatically calculate and apply cash discounts based on payment method, your next step is to make sure your staff knows how to communicate with customers about the cash discount. This is especially important when getting verbal confirmation for work orders after estimates, because the customer is often remote and incapable of seeing signage communicating the policy. Using electronic estimate invoicing you can email is a great way to put the discount in writing, but your staff should also be ready to briefly state it without pulling focus from the rest of the communication to help customers plan for payment when they authorize work. Once you have the equipment, signage, and staff training done, you’re ready to run your new cash discount program!