Calculator
Cash discount vs surcharge calculator
Estimates only. Educational only; not legal, tax or financial advice. No guarantee of savings or approval.
Monthly gross profit after card fees
Highest estimate: Cash discount / dual pricing
$1,689 / month vs absorbing
Estimates only. Results vary. No guarantee of approval, rates or savings.
Talk with a payments specialistBefore you start any surcharge or cash discount program
- Rules vary by state, and card-network rules change.
- Customer reaction and competitor pricing matter as much as the math.
- Verify current rules with the card networks, your state and your provider before starting.
- This is not legal advice. Talk with your own attorney or advisor.
The formulas
Absorb: profit = sales × margin − card sales × effective rate
Surcharge: profit = kept sales × margin + surcharged credit × % − fees on (surcharged credit × (1 + %) + debit)
Cash discount: profit = kept sales × margin + card sales kept × % − fees on (card sales kept × (1 + %))
Worked example (illustrative numbers)
- Monthly sales $100,000; 80% by card; 70% of card sales are credit; effective rate 2.90%; program 3.00%; margin 40% (illustrative)
- Absorb: $40,000 − $2,320 in fees = $37,680
- Surcharge applies to credit only, so debit fees stay with you
- Cash discount applies to all card sales, but more customers may notice the higher card price
- The calculator shows which program leaves the most profit under your assumptions
Key takeaways
Common questions
What's the difference between a cash discount and a surcharge?
A surcharge adds a fee for credit card payers. A cash discount posts the card price and gives a lower price to customers who pay cash or by other non-card methods.
What is dual pricing?
Showing two prices, one for cash and one for card, so customers see both before paying. It's modeled here the same way as a cash discount.
Why might absorbing the fee win?
If customers react strongly or your margins are high, lost sales can cost more than the fees you recover.
Are these programs allowed everywhere?
No. Rules vary by state and card-network rules change. Verify current rules with the networks, your state and your own advisor.
Does this include one-time costs?
No. Signage, software changes and staff training are not included.
Keep learning
Estimates only. Results vary. No guarantee of approval, rates or savings.
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