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3 On Your Side: Some Small Businesses Offering Discounts For Customers Paying With Cash

By Jim Donovan

PHILADELPHIA (CBS) — Paper or plastic? Which is the way you like to pay?

Do you automatically whip out a credit card or pull cash out of your wallet instead?

As 3 On Your Side consumer reporter Jim Donovan finds, one form of payment could save you money, and in many cases, all you have to do is ask.

Everyone knows it will save you money at the gas pump, but it could also help lower your bill at the repair shop and put a smile on your face at the dentist office.

While credit cards are no doubt convenient, now more than ever, cash is king.

“We’re more than willing to give them a discount,” said Tony Dicesare.

At Tony Dicesare’s Auto Service in Westmont, New Jersey, all you have to do is ask.

“If you want to pay by cash, we’ll be more than happy to give you a cash discount for not using a credit card,” said Dicesare.

That discount averages around 3 to 4 percent; the amount businesses have to pay in order to process a credit card transaction.

“I would rather see you have that 3 or 4 percent in your pocket than me giving it to the credit card,” said Dicesare.

“Every time I swipe that card, it’s a cost to me, and at the end of the day and at the end of the year, those charges add up,” said Lynda Kane.

Kane owns Aenigma Jewelry in Collingswood. She is among a growing number of business owners offering a discount to customers paying with cash.

“If they do have an article, and they don’t want to use their credit card and if they do pay by check or cash, then I will give them like, if they ask, a 3 to 4 percent reduction in what they purchased,” said Kane.

“It’s a win-win situation,” said Dr. Barry Dubin.

The Center City dentist says most of his patients take advantage of a five percent discount he offers when they pay cash up front for major dental work.

“We come right out and say that if you pay this upfront, there’s a five percent discount, and go use the money for something else,” said Dubin.

Patients pocket the savings, and Dr. Dubin has less paperwork to deal with.

“Now we have no billing. We can pass that on to other patients because it keeps our overhead down.

While cash discounts are being offered by an increasing number of small businesses, large chain stores aren’t likely to offer them. If you’re in doubt, it might be worth asking.

Also, there are instances where using your credit card may be preferable, such as if your credit card company offers extended warranty protection for purchases made with the card.


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  • Jan

    I love Jim’s recommendations, but I am not sure about this one. So many businesses want customers to pay in cash so they don’t need to report the transaction to IRS. Cash is very easy to hide.

    • jimdonovancbs3

      Jan – this doesn’t have to do anything with hiding transactions. Any business that would do that would be foolish. Instead these businesses are just passing on a savings that they don’t have to pay on to the credit card companies. Jim D.

  • Hy mie Green spin

    Because a deduction might save them 25%. Getting cash saves them 100%.

  • Tom

    However, fees that a business pays for accepting credit card, are deductible as a business expense. So I don’t understand why businesses complain about paying them, if it can help reduce the amount of taxes owed.

    • jimdonovancbs3

      Tom – a tax deduction is not equal to the amount a business will save if they don’t have to pay a credit card transaction fee. No fee, means no cost to them. So that is why many businesses are passing on the savings to customers that ask. The customer saves 3-5%, the business still ends up with the same amount of money in it’s pocket. It’s a win-win for both. Jim Donovan.

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