Cash payments

[growler]

This subject keeps comming up in different threads. So I though I would just ask the question out right. How many of you legitimate contractors out there actually give a discount for cash payments. Maybe there is some advantage I haven't figured out as of yet.

The question is this.

First: Do you offer a discount for cash payments?
Second: Would you be willing to give a discount for cash payments?
Third: Why or why not?

The reason I ask is that certain people seem to think there should be a discount for cash paid services.

 

[whillis]

Answers in order:
Sometimes
Yes
No merchant fees on cash

 

[growler]

No merchant fees on cash

What is a merchant fee?

I just looked it up. Processing fee. I should have asked also the amount of discount that contractors are willing to give.

 

[charlie b]

Just a guess, but I suspect that a "merchant fee" would be a charge by the credit card company. They take a percentage of the fee that you collect from your customer, when you are paid by credit card.

 

[growler]

Just a guess, but I suspect that a "merchant fee" would be a charge by the credit card company. They take a percentage of the fee that you collect from your customer, when you are paid by credit card.

You are right but that only comes to something like $30 on a thousand and is not that much of a discount. I doubt if the customer would be real impressed. Most of the customers that I have dealt with are looking for something in the range of 10-20-30%.

 

[cowboyjwc]

Come on you know the real reason that everyone thinks that they should get a cash discount is because you are not going to report it to the IRS, so no taxes.

I always told them that I have to do the same amount of work whether you pay me by check or cash, the only difference is that cash doesn't bounce.:smile:

 

[petey_c]

Discount for cash?

Discount for cash?

I don't normally give a discount for cash. Occasionally, it's good to be paid in cash. This way I can skim a little off the top before I hand it over to the accountant (wife).

 

[480sparky]

The only money I save by accepting cash is I don't have to make a trip to the bank.

 

[Sparky555]

On rare occasions someone will want a 10% discount for cash. It's not worth 10%. I'd discount the equivalent of a credit card fee, but no more. When they can't get a 10% discount, the credit card or checkbook comes out for payment.

Dave

 

[active1]

No discount for cash payments.

I never receivd cash from a customer and my books prove it.

 

[JohnJ0906]

The company I work for now charges 5% extra for using a credit card - to offset the merchant fee.

I was paid in cash for a job today - in a rather bad neighborhood - I was wondering if the customer was setting me up. She was very unhappy we were charging her to replace a stolen service drop. I was wondering if some of her friends would accost me on my way to the truck for an involuntary refund....

 

[MagnoliaElec]

Active1 and Petec I'm onboard with you two. How else am I going to fund man activities, golf, 4 wheelin' or any other non accountant/wife sanctioned activities.

 

[growler]

I was paid in cash for a job today - in a rather bad neighborhood - I was wondering if the customer was setting me up. She was very unhappy we were charging her to replace a stolen service drop. I was wondering if some of her friends would accost me on my way to the truck for an involuntary refund....

That's a very good point. It's not a good idea to let people think that you keep lots of cash on your person, in your home or even at your place of business.

The IRS are not the only people that would like to rob you.

 

[ultramegabob]

That's a very good point. It's not a good idea to let people think that you keep lots of cash on your person, in your home or even at your place of business.

The IRS are not the only people that would like to rob you.

Although it is a possibility, I doubt it. In my experiance when I have done work in the rougher end of town, people tend to pay cash. I think its just how they tend to do business, I also tend to carry a pistol.

 

[growler]

I also tend to carry a pistol.

So do I and so did General Custer but when you give up the home field adavantage and you are out numbered about a 100 to 1 it can make you think. :grin:

 

[romexking]

The company I work for now charges 5% extra for using a credit card - to offset the merchant fee. QUOTE]

Although I don't have the specific law in front of me, I think you will find that it is illegal to charge extra for credit card purchases. I am also 100% confident that it is a violation of the merchant agreements your company has with the CC companies.
Beside that, the reason for accepting CC is to be convenient to your customers, receive payment quickly, also that your customers will tend to spend more money. The cost of processing the payments should be included in the budget, and the overall hourly rate your company charges should be adjusted to account for this overhead.

How would you feel if you had to pay extra when you go out to dinner, or buying merchandise at a store? I wouldn't like it one bit!

 

[peter d]

[
How would you feel if you had to pay extra when you go out to dinner, or buying merchandise at a store? I wouldn't like it one bit!

Very true, credit cards are accepted virtually everywhere now. No doubt the fast food chains have increased their prices to account for it.

 

[JohnJ0906]

Cash, check, charge. I really don't care. Pay.
I don't set the policy.
I would be surprised if this was illegal - I'm sure it would have been brought up a long time ago. However, I will mention this possibility.

edit to add - Hey! Post 2000!

 

[peter d]

edit to add - Hey! Post 2000!

Congratulations. Your prize is a hug from Iwire.

 

[JohnJ0906]

Congratulations. Your prize is a hug from Iwire.

I figure I will catch up to him in about 2035...... :grin:

I'll pass on that hug though - nothing personal Bob.