The Evolution of Pricing: Part 2 - Understanding Cash Discount
![Valor The evolution of Pricing Part-2 Cash Discount](https://valorpaytech.com/wp-content/uploads/2023/06/Valor-Evolution-of-pricing-part-2-cash-discount-052023_1200x628-FEATURED-IMAGE-100.jpg?x47985)
As discussed in part 1 of our series on the evolution of pricing, Cash Discount is a pricing model for businesses to recoup costs.
A cash discount is a widely used term in business. As the name suggests, it refers to a business offering an incentive as a discount for cash transactions. This discount is usually a percentage of the total price of the product or service. In this blog post, we will discuss the origin of cash discounts and the difference between non-cash adjustments and cash discounts.
The Problem with Non-Cash Adjustments
In its early stages, a popular product called “Cash Discount” applied a charge to non-cash transactions and waived it if cash was used. This program lacked clarity and has since been defined. Today, a “Non-Cash Charge” is considered a surcharge and must follow the rules associated with surcharging programs.
![Old terminal with cash discount](https://valorpaytech.com/wp-content/uploads/2023/06/Old-Terminal-with-Receipt-Image-PNG-223x300.png?x47985)
Cash Discount
As previously explained, a cash discount refers to a business offering an incentive in the form of a discount for cash transactions. A business with a cash discount will always list the non-discounted price on its shelves, signifying a true discount for using cash.