Zhumangarin addresses public concerns about the new Tax Code: Will individuals carry bags filled with cash?
Retail outlets have been observed to post signs advertising discounts for cash transactions, an effort to entice customers to use cash instead of credit or debit cards. This practice aims to mitigate credit card processing fees, which typically range from 1.5% to 3.5% per transaction. By advocating cash payments, businesses can enhance their cash flow, hasten the collection of funds, and lower expenses incurred with electronic payment methods [1][5].
Reducing the days sales outstanding (DSO) is another benefit, as the business receives its money more expeditiously, which supports operational funding and business advancement. Behavioral research reveals that even modest cash discounts can affect customer payment behavior, making them more likely to settle their bills promptly in the future [1].
Although not widespread across all sectors, this practice is common among small businesses, restaurants, and retailers who are particularly affected by processing fees and cash flow challenges [1][3]. The prevalence may vary depending on the region and industry. Merchants must ensure their cash discount programs follow local financial regulations and card brand rules to avoid financial penalties or customer discontent [2][3].
When asked about the current situation, he acknowledged that while progress is being made, complete resolution may not be achieved yet and improvements will be further addressed next year. He added that innovations are rarely popular initially [4]. The, aforementioned, cash discount strategy is a recognized and growing technique in many small and medium-sized businesses [1][3][5].
I, as a small business owner, am considering implementing a cash discount strategy to lower expenses incurred with electronic payment methods and enhance cash flow. With this strategy, I hope to reduce days sales outstanding (DSO) and improve operational funding and business advancement.
