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Surcharging vs. Cash Discounting

There are benefits and limitations with both systems. Some businesses will benefit from one program and not the other - that's where AND's industry experience applies.

At their core, Surcharging and Cash Discounts both aim to reduce the impact of processing fees on your company - however, how these two concepts accomplish this is very different. Below we’ll outline the two, and how they differentiate.


Cash Discounting


A Cash Discount is a discount you provide your customers to incentivize them to use cash as a form of payment over credit and debit cards. Cash Discount programs are legal in all 50 states, and have been for quite some time (think gas stations – they’ve historically provided cash-discounts and all consumers are totally comfortable with this). Cash discounts work by applying a service fee on all customer transactions - a fee that is removed if the customer pays with cash. Legally, the merchant must produce a receipt that clearly shows the service fee or discount amount.




Surcharging is a small fee added to a customer’s transaction designed to offset the cost of the credit card processing fee. Surcharging is allowed by card associations but is legally prohibited in 4 states (Colorado, Connecticut, Kansas, and  Massachusetts) and only applies to credit cards (Debit Cards are legally protected from surcharging).


Surcharging has many more guidelines surrounding its implementation than Cash Discounting does. In fact, surcharging restrictions can vary state to state as well as by card brands. It is best to check your state and the card brands you accept guidelines regarding surcharging. In order to surcharge, you must:


  • Properly notify the card brands and customers you'll be surcharging.  Notifying the card brands is an application based process (AND handles that for you!) whereas notifying your customers usually includes displaying  signage at the front door, the POS, and consumer receipt. We also provide signage and receipt configuration, so this is all handled on your behalf when you sign up.

  • Not exceed a 4% Surcharge. Surcharging is capped at 4% of the amount of the transaction. Most merchants opt to charge 3.99% to stay clearly under the limit.


As you can see – surcharging can get a bit more cumbersome to setup, which is why it’s so important to partner with a provider who is intimately familiar with zero-cost processing options. Let AND guide you through the process of reducing your payment processing costs in the easiest possible way!

How much money can you save?

The average small business will save $9,500 annually by switching to the AND zero-cost program. Use our simple comparison tool to see how much you can save you can save with our surcharging and cash discounting programs.

We're serious about saving money.

AND is dedicated to getting your processing rates as close to zero as possible. We utilize membership pricing along with cash discounting and surcharging programs to maximize savings. Let our analysts review your statements and see how much money we can put back in your pockets. 

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