Getting a Discount When You Pay Cash…..
Andover, Massachusetts January 5th, 2011 – With the use of credit cards becoming less appealing by the day, many business owners are turning to cash as a way to attract new customers. Since any credit card transaction costs the store owner a certain percentage of the sale price, businesses have an incentive to increase the number of cash only transactions that take place each day. As such, many companies in a variety of industries are offering discounts when consumers put away their credit cards and pay for the good or service in cash. Check out some of the most common in the following list…
- Gas. The popularity of a cash discount at gas stations has really boomed over the past 3 years. I remember when I first started driving about a decade ago that cash discounts were non existent here in the Northeast. Since the recession however, I have seen multiple independently owned stations turn towards a cash discount business model. Typically consumers can expect to save between 3 and 5 cents per gallon, which ads up to savings of around a dollar per fill up. While this may not seem like much, every little penny helps!
- Property Taxes. Most local governments still do not accept credit cards as a form of payment for city taxes and fees so the discount here is a little different than the previous example. Here the discount is based on when you make the payment. For example, a county in Florida gives you a 4% discount for paying your taxes 4 months early, which then goes down to 3% for 3 months early and so on. This could be some significant savings, especially if you know you can not get a better rate of return during those 4 months with some other investment.
- Gym Memberships. Many gyms nationwide including larger chains offer a discounted price if you pay for a year long membership up front. While this is a great idea if you are a gym rat, it could mean wasted money if by month 6 you have stopped going to the gym.
- Cars. This is a strategy that has been true for a long time now. If you can walk onto a dealer lot with enough cash to pay in full that day, the salesman will probably be more than willing to discount the price by a few percent. If not, maybe you can have him include some oil changes or free tire rotations as part of the final price.
- Insurance. This applies primarily to car insurance but could be true for home insurance as well. Typically the insurance provider will provide you a set of different quotes, all based on how often you want to make payments throughout the year. One payment would have the lowest final price, followed by quarterly, and then monthly. Do the math, it could be a sizeable chunk of change ($200+) that you could be using to pay down some of your outstanding debts.
Readers, have you seen a rise in Cash only prices in your neighborhood? If so, do you take advantage of them or do you continue to rely on the convenience of credit cards?
