Kaycee Anderson

What do people think of a cash price for service over product cost? Or does that sound like a hidden surcharge?

How do you encourage clients to pay cash? Huge bottom line diff for me with cash payments.

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1 Answer

Steve Osborne

Steve Osborne , director at Smarthinking

While not necessarily sounding like a hidden surcharge, it does sound a little strange/fishy to offer a discount for cash payment on a B2B service. As a service business, you are perceived to be "above" that sort of thing. Personally, my expectation would be of a somewhat inferior service, altho' I might not be able to resist a bargain!

However, it's perfectly acceptable to offer a discount for volume on B2B services e.g.

Buy Package One and get Package Two at a reduced rate. Or buy all three Packages for 20% off the total.

And to assist cashflow, it's perfectly acceptable to offer a discount for prompt payment e.g.

Take 5% discount off the total shown, if paid by the 15th of the month of invoice.

You would still want me to pay by EFT.

On the other hand, it's quite acceptable to have a cash only price if for a retail product. The reason being, quality of the product is a given. I can compare like with like over two or more suppliers. Of course, such offers attract bargain hunters, who are seldom repeat purchasers.

Do you include EFT as cash equivalent, or are you generally referring to payments by card? If EFT does the job, why not cease to offer credit card terms?

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