How to Recoup Credit Card Processing Fees


Lightning Online POS provides two ways to recoup credit card processing fees - the Cash Discounting Method and the Convenience Fee/Surcharge Method.
This is not legal advice, and the regulations governing your industry, state/county/city/town/village, and credit card bureau apply.

Cash Discounting
Usually, this is the method of least resistance. A Cash Discount reduces the purchase price, if the customer pays with cash. As a rule of thumb, if the price on the shelf/sign/item has the standard price, then if you elect to reduce the price of the item at the time of sale, this would be ideal.

This method will work best if you raise your prices on the shelf, then reduce the price, if their payment method is cash. 

Example
Enable Cash Discounting – (Check this box)
Label:  Cash Dis.  This will appear throughout Lightning, your enhanced pole display, all receipts,
Today's Sales, Close the Day/Shift, Sales Summary, Sales Journal, etc.
Percentage:  - 2.49% (This must be a negative number)

Sale
Item One $ 100.00
Item Two $ 25.00

Sub-Total:  $ 125.00
Sales Tax:   $ 6.25 (Assuming 5.00% Sales Tax)
Total:  $ 131.25

When you select 'End Transaction' and 'Cash,' the calculations will automatically update:

Sub-Total:  $ 125.00
Sales Tax: $ 6.25 
Cash Dis.  $ - 3.11 (A 2.49% discount was applied to the sub-total) 
Total:  $ 128.14

Let's review the same sale with a credit card:

When you select 'End Transaction' and 'Credit Card,' no adjustments are needed.

Sub-Total:  $ 125.00
Sales Tax:  $ 6.25 
Total:  $ 131.25

Please note, the price of each item would have to be increased to offset the cash discount.
In this example, you can increase an item by 2.49% from $ 24.99 to $ 25.61. Since this is an odd price point, $ 25.99 might be better or something similar. It may be best to raise some items to $ 25.49 (slightly lowering the 2.49 percentage), then submit other items such as $ 5.99 up 2.49% = $ 6.14, so $ 6.19, or similar, may work. 

If you are in a competitive market, your price increases may put you at a competitive disadvantage, as a few customers will notice.  i.e., the price of $ 26.74 when it was $ 24.99 yesterday.

The logic benefits the consumer as the price on the shelf reflects the higher price; the consumer is not misled. When they get to the register, Lightning automatically reduces the price if they are paying cash; the customer will immediately see the benefit.


 This does not increase or decrease the profitability of the items within the sale. 


When using the Cash Discount Method there is a benefit to the store to accept a pin-based Debit Card, as the marked-up shelf price will be processed. However, when using the Convenience Fee/Surcharge Method, there is no advantage in using a pin-based Debit Card as the store will not benefit from the higher price nor can it add the Convenience Fee which is meant for credit card transactions.


Convenience Fee
A Convenience Fee/Surcharge will increase the customer's price by X.XX% if they use a credit card. Purchases made with debit cards and cash will not be subject to the surcharge. However, there is an option to enable the convenience fee for debit transactions, which we don't recommend due to regulatory restrictions. As always, check with your trusted sources before implementing this.

Example
Enable Convenience Fee – (Check this box)
Label:  Conv. Fee This will appear throughout Lightning, your enhanced pole display, all receipts,
Today's Sales, Close the Day/Shift, Sales Summary, Sales Journal, etc.
Percentage:  3.49%

Sale
Item One $ 100.00
Item Two $ 25.00

Sub-Total:  $ 125.00
Sales Tax:  $ 6.25 (Assuming 5.00% Sales Tax)
Conv. Fee    $ 4.36 (Lightning added 3.49% to the sub-total.)
Total:  $ 135.61

Also, if you select 'End Transaction' and 'Cash,' the sale will remain:

Sub-Total:  $ 125.00
Sales Tax:  $ 6.25 (Assuming 5.00% Sales Tax)
Total:  $ 131.25

Either method also flows through our Enhanced Pole Display which shows the customer the Cash Discount or Convenience Fee.