What is Lost Cash Discount?

What is Lost Cash Discount?

Wholesale companies will often list their pricing at “discounted” cash prices. When companies or customers pay with a credit card, they will then charge a 3% “lost cash discount” or “cash loss discount”, which is another name for a credit card fee, processing fee, or convenience fee. In order to avoid the 3% charge, customers or companies normally need to pay electronically via an ACH transfer or bank account.

Listing prices as low as possible is important to stay competitive, especially in the wholesale and B2B industry. The cash pricing enables companies to show “discounted” or lower pricing and if customers pay with a credit or debit card, additional fees will be added on.