Comment by bluGill
16 days ago
You shouldn't get a cash discount - cash costs the merchant MORE than credit card fees. You have to count all the costs of cash that credit cards don't have: counting, and recounting the cash and change. Then the manager counts and recounts everything in the back room at the end of the shift. Then the manager counts everything twice again to write up the deposit forms. Plus you need a cash register with the extra cash drawer that acts like a safe. Plus other security systems just to prevent robbery (this can get elaborate in areas where robbery is common). Those all add up.
That's like a 4-5 seconds of low paid work for each transaction, though. 10 seconds, if I'm being generous. Counting a lot of cash is a long process, but each separate banknote is counted in a fraction of a second.
So, about 4-8 cents, for 30$/hour if we talk about grocery store.
Restaurant might take more time to process cash, but pays lower salary.
I do not think it's a higher cost than current credit card fees
> You shouldn't get a cash discount
Maybe, but "should" has nothing to do with it. Either I get one or I use my credit card.
> cash costs the merchant MORE than credit card fees
That's not my problem.
None of this is your problem: you are not a merchant. What is wrong is the analysis of various people who think cash is cheaper and thus get mad at not getting a cash discount. It is also wrong that a number of merchants are bad at accounting: they think that cash is cheaper by enough to be worth a discount - but this is not your problem either.
Just pay with a credit card, it's the optimal way by far (float, flexibility, rewards). No need to overthink it.
It's worth to think about it a bit, especially in larger purchases. Significant discounts on the order of 5% to 10% can easily beat all credit card benefits, and not taking advantage of it leaves lots of money on the table.
I have a little lookup table for this. Interest free installments mapped to cash discount necessary to beat the credit card. I just look it up.
These numbers are actually conservative. There's a lot of credit card benefits that weren't priced in. I add a couple percent to the required discount numbers and round it up to compensate.
1 reply →