Cash Discount Agent Program | How to Sell Cash Discounting
First Let’s See How the Traditional Selling is Done?
Imagine a 7 Eleven kind of store getting $10k via credit cards and paying $300 in fee on it. Now in order to sell your program to the merchant, you will have to reduce your profit and offer him to pay $250 in fee using your program and save $50.
However, with this approach, you are losing 50% of your profit and only getting $50 out of the total profit of $100. This approach might win you “salesman of the year” award, but it won’t let you buy that Mercedes you’ve been eyeing for some time.
Here’s What We Will Do:
You go to the merchant and tell him that you will reduce his credit card payment processing fee from $300 to zero or almost zero. And you will do that by telling customers that they will get a discount if they pay via cash, but if they pay via credit card, they will have to pay full price.
But what they don’t know is that the full price is actually the original price of product + processing fee. So, in the end, the merchant just deducts the fee from the original price and use it to pay for the credit card processing.
Let’s Make Things Easier With an Example:
A store sells baseball gloves at the price of $10 each. There’s a signage on the door that says, ‘We have a discount on cash payment while all credit card payments will be made on full price”. Now, if the payment is made via credit card, you will charge $10.5, which the customer will assume is the actual non-discounted cost of the gloves.
Now let’s put this example in our previous 7 Eleven kind of store scenario. Here, we will have a 4% surcharge on credit card payment instead of $0.50 from the example because we are allowed to have a 4% charge max. So if the baseball gloves seller is doing $10k a month in credit card payments, we will tell him that instead of paying a $300 fee from your pocket, you put a 4% fee on credit card payments.
So this way, he will get $400 in cash, which is not coming out of his pocket. Now, do you think the merchant will deny this kind of deal? He is basically just putting the fee on the customer and not paying a single penny out of his pocket.
Selling the Terminal on Lease:
Now that your merchant is hooked on your offer, this is the time you sell him the terminal on lease and get a monthly rental income. You can tell the merchant to automate his cash discounting process with this terminal and make life easier.
However, these payment processors are tough to program for specific functions like deduction of a set fee. So you can ask him to pay you a monthly fee for the terminal and justify this fee by telling the part about handling programming of the terminal.
This can be just $29.95, which the merchant will gladly accept as you just saved him from paying $300 a month so he can at least pay 10% of it for the added benefit of terminal. So this is how selling cash discounting program works and how you can get that Mercedes you want.
Some Final Tips:
If you want to crush your sales, you need to study the cash discount agent program and how this whole process works. If you know it from inside out, you can sell it with confidence.
You need to decide the model of business you will choose for cash discounting. Places, where there is addition of tips like sit-down restaurants, can make the cash discounting difficult. Also, a pizza place having a huge line outside won’t be a good candidate either.
Don’t let the last tip discourage you; there are many other businesses out there that are perfect candidates for the program. Make a list, approach them and tell them how you can take down their credit card payment processing fee to zero dollars, they’ll be hooked from the start.
Selling a cash discount program is challenging for those who don’t know how to approach businesses; however, with the selling process mentioned above, you should do just fine.