Cash Discount?... What does that even mean these days?

Posted by Bill Warmoth on

The retail music industry might serve the largest and most diverse universe of consumers in the world. That said, regardless of the type of clientele we serve in our fans of niche brands, we have stories to share that would make your hair stand on end.

So, what about cash? Though the world has evolved to more digital transactions, some people say “I’ll pay right now in cash, if you offer me a discount!”,… Mind you, we were talking by phone and from two different parts of the country. How would that even work?

Well in reality, most of those proposals do not really involve ‘cash’, yet maybe a cashier’s check or bank wire. Though there was this one fellow who actually sent hundred-dollar bills in an envelope via express delivery! (We checked with the bank, they were not forged or reported stolen).

Years ago when interviewing a CPA to work with our business, he asked how much of our store sales were in the form of cash. Very little, though on some occasions clients literally save their bucks for a guitar journey when they come to visit Nashville and prefer to pay in cash. We doubt their spouse knew about their cash stash, especially when they declined the need for a printed receipt.

But the CPA (in vying for our work) suggested we take that cash and stuff a mattress with it, as to avoid paying income taxes. This evokes a “pawn shop” mentality. I have always felt it best to not try to keep up with your lies. Besides which, you couldn’t rely upon any performance data for future forecasting.

With today's low interest rates businesses enjoy competitive (negligible) credit card processing fees. Except the shoppers using “points” cards, where the merchant pays for all the “cash back” offers and card member benefits.

But hey… If you want to pay cash and save us some small change on credit card fees, we certainly would appreciate the kind gesture. Though I don’t understand how that savings should in turn be exchanged for a discount. After all, we never charge any “add-on” fees for credit card processing.

Offering a “cash discount” as a policy legally requires additional bookkeeping, just the same as if a business decides to charge extra for credit card fees. It is only legal if they are itemized. Unless maybe the business owner is stuffing a mattress, then it probably doesn’t matter, except how well you sleep at night.

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