Dual Pricing FAQs

General Questions

Q. Who typically uses dual pricing?

A. Who typically uses dual pricing?

Common business types:

  • Retail stores (gas stations, convenience stores, boutiques)
  • Restaurants (from quick-service to fine dining)
  • Professional services (lawyers, accountants, consultants)
  • Contractors and tradespeople
  • Medical and dental practices
  • Any business operating on thin margins

Why it’s popular: Works for any business type, any size, anywhere in the U.S.

Questions? Talk to one of our experts.

Q. What's a real-world example of dual pricing?

A. Gas Station Example:

  • Sign shows: “Regular $3.49/gal (Cash: $3.39/gal)”
  • Customer pumps gas and chooses payment method
  • Pay with card: $3.49/gallon
  • Pay with cash: $3.39/gallon
  • No surprise – customer knew both prices before pumping
Q. Why would customers choose to pay more with a card?

A. Why would customers choose to pay more with a card?

Common reasons:

  • Convenience (don’t have to carry/get cash)
  • Rewards points on their credit card
  • Better purchase tracking for budgeting
  • Building credit history
  • Buyer protections
  • Prefer not to visit ATM

About 70-75% of customers still choose cards even with dual pricing because the benefits outweigh the small cost difference

To learn more or get your questions answered, talk to one of our experts.

Q. How do I explain dual pricing to customers who ask?

A. Use a simple, consistent script across all staff:

Script: “We offer two prices to give you a choice. Our card price includes the cost of processing cards, which has gotten really expensive. If you pay with cash or ACH, you save [X%]. Either way works for us – whatever is most convenient for you.”

Focus on:

  • Customer choice and savings opportunity
  • Transparency (prices shown upfront)
  • Their convenience

Avoid:

  • Complaining about card companies
  • Making customers feel bad for card use
  • Over-explaining your business costs

Be prepared for:

  • Follow-up questions (“Why not just lower prices?” “Is this legal?”)
  • Some customer dissatisfaction despite clear explanation
  • Need for manager involvement with upset customers

Critical: All staff must use consistent messaging. Train everyone thoroughly before launch.

To learn more or get your questions answered, talk to one of our experts.

Q. What if I have both online and in-person sales?

A. Dual pricing works for both, but requirements and complexity differ:

In-person:

  • Option 1: Show both prices on items ($10 card / $9.70 cash)
  • Option 2: Show card price only with signage explaining discount
  • Display both at POS terminal
  • Automatic discount calculation

Online:

  • “Cash” = ACH/bank transfer/eCheck (not physical cash)
  • Display both prices before checkout
  • Payment gateway must support ACH and automatic pricing
  • May require additional customer verification for ACH

Challenges:

  • Different state requirements for online vs in-person
  • More complex technical setup for online
  • Customer service complexity managing two channels
  • Consistency is ideal but state laws may require variations

Reality: Omnichannel dual pricing requires separate implementation planning for each channel and potentially different approaches based on state requirements.

To learn more or get your questions answered, talk to one of our experts.

Q. How does dual pricing affect my profit margins?

A. The math is more complex than simple “fee savings.”

What actually happens: You raise all prices by ~3%, then discount for cash. The financial impact comes from two sources:

  1. Fee elimination on transactions that switch to cash
  2. Price increases paid by customers who continue using cards

Example (100 transactions, 25% switch to cash):

Before: 100 @ $100 = $10,000 revenue, $300 fees, $9,700 net

After: 75 @ $103 + 25 @ $100 = $10,225 revenue, $232 fees, $9,993 net

Benefit breakdown:

  • Fee savings: $68
  • Additional revenue from card users: $225

Reality: This is primarily a price increase program that shifts costs to card-using customers. Your margins improve, but largely because you’ve raised prices on 70-75% of customers.

To learn more or get your questions answered, talk to one of our experts.

Q. Do I need different equipment for cash vs. card sales?

A. You don’t need separate equipment, but your existing system must support dual pricing.

Your POS system must:

  • Display both prices at checkout
  • Automatically apply discounts by payment method
  • Generate compliant receipts
  • Handle both card and cash processing

What you may need:

  • Software/firmware updates to existing equipment
  • Compatible payment terminal (verify your model supports it)
  • New signage throughout business
  • Potentially hardware upgrades if system is outdated

Compatibility varies: Not all POS systems support dual pricing. Verify with your payment processor that your specific system can be configured for dual pricing before committing.

Setup costs: Factor in configuration fees, signage, training time, and potential equipment upgrades.

To learn more or get your questions answered, talk to one of our experts.

Legal & Card Brand Considerations

Q. Is dual pricing legal everywhere?

A. Dual pricing programs are generally permitted in all 50 states when properly implemented.

Dual pricing is a compliant pricing strategy because it is structured as a discount for paying with cash, not a fee for using a credit card.

  • The Key Difference: The legal price you advertise must be the higher (card) price, and the lower (cash) price is presented as a savings or discount.
  • Surcharges vs. Dual Pricing: This method avoids the issues of surcharges (an extra percentage fee added at checkout), which are banned in a few states (e.g., California, Connecticut, Maine, Massachusetts) and heavily restricted in others (e.g., New York).
  • Compliance: To stay legal, you must clearly and conspicuously display both the card and cash prices upfront.

However, compliance requires careful attention to state price transparency laws, card network rules, proper signage, and accurate fee calculations. We recommend consulting with legal counsel familiar with your state’s specific requirements before implementation.

Want to know more about how dual pricing differs from surcharging? Visit intellipay.com/surcharging-vs-cash-discounting

Q. What about states with new pricing disclosure laws?

A. Several states have recently enacted “junk fee” or price transparency laws that require businesses to display the full price customers must pay, including all mandatory fees. These laws create additional compliance considerations for dual pricing programs.

Key States with New Requirements:

  • Virginia (SB 1212/HB 2515) – Effective July 1, 2025: Requires businesses to clearly and conspicuously display the total price including all mandatory fees or surcharges in advertised prices.
  • California (SB 478) – Effective July 1, 2024: The “Honest Pricing Law” mandates that businesses include all mandatory fees in the advertised price of products or services.

How Dual Pricing May Interact with These Laws:

When properly implemented, dual pricing can potentially comply with these laws because:

  • The advertised price is the card price (the higher, full price)
  • The cash discount is presented as optional savings, not a mandatory fee
  • Both prices are displayed transparently before purchase

Critical Compliance Considerations:

However, there is legal complexity and ambiguity here:

  • These laws were designed to eliminate surprise fees added at checkout
  • It’s unclear whether regulators view the credit card processing markup built into the “card price” as a “mandatory fee”
  • Requirements for signage, disclosure language, and price display vary significantly by jurisdiction
  • Enforcement and interpretation of these new laws is still evolving

Our Strong Recommendation:

Do not implement dual pricing in states with new price transparency laws without first consulting with legal counsel who is familiar with your specific state and local requirements. 

Q. Is dual pricing the same as cash discounting?

A. Yes, these terms are used interchangeably in the payment processing industry. Both refer to the same pricing model where:

  • The advertised/posted price is the card price (includes processing costs)
  • Customers paying with cash receive a discount from that price
  • The goal is to offset credit card processing fees

Whether you display both prices upfront (e.g., “$21 cash / $21.65 card”) or display one price with signage explaining the cash discount, it’s still the same compliant program as long as the posted price reflects the card price and the cash payment is treated as receiving a discount.

Q. Are there any geographic restrictions?

A. Dual pricing is generally permitted in all 50 states, including states where surcharging is banned or restricted (Connecticut, Maine, Massachusetts, California, and New York).

States with new price transparency or “junk fee” laws—particularly California (SB 478) and Virginia (SB 1212/HB 2515)—have created additional compliance complexity for dual pricing programs. These laws require that all mandatory fees be included in advertised prices, and it’s unclear how regulators will interpret the card processing markup built into dual pricing.

Key differences from surcharging:

  • Dual pricing structures the higher price as the standard price with a cash discount, rather than adding a surcharge fee
  • This approach is legally distinct from surcharging and avoids those specific state bans

Important: While dual pricing is technically legal nationwide, implementing it in compliance with state and local price transparency requirements requires careful planning and legal review. 

Other Requirements

Q. What do I need to display?

A. Price display is one part of compliance. You need:

Price Display (choose one):

  • Show both: “$10.00 (card) / $9.70 (cash)”
  • Show card price + notice: “$10.00 – Save 3% with cash”

Critical Rule: Card price = advertised price. Cash = discount.

Other Required Elements:

  • Signage: At entrance, throughout store, and at checkout explaining the program
  • POS System: Must display both prices and auto-calculate based on payment method
  • Receipts: Must show the discount amount for cash payments
  • Staff Training: Employees must be able to explain the program
  • Debit Card Policy: Decide how debit transactions are treated and disclose clearly

State and local requirements may add specific signage, language, or display rules. Consult legal counsel before implementation.

Q. Where do I need to show prices?

A. You need SIGNAGE explaining the program in multiple locations, but you don’t necessarily need both prices on every item.

Required Signage Locations:

  • Business entrance
  • Throughout the business
  • Point of sale/checkout

Price Display Requirements:

Individual Items (tags/menus):

  • Option 1: Show card price only ($10.00) – program explained via signage
  • Option 2: Show both prices ($10.00 card / $9.70 cash)

Must Show Both Prices:

  • Checkout/payment terminal screens
  • Receipts (with discount clearly itemized)
  • Website (if accepting online payments)

Key Rule: If showing only one price on merchandise, it must be the card price. The dual pricing program must be clearly explained through signage so customers understand the cash discount is available.

Q. How much can the difference be between prices?

A. The difference should reflect your actual credit card processing costs:

  • Typical range: 2.5-4%
  • Should be reasonable and based on your actual average processing costs
  • Some providers structure programs with up to 3.99% discounts

Note: Unlike surcharging (which has a Visa 3% cap), dual pricing doesn’t have the same percentage restrictions because it’s structured as a discount from the posted card price, not a fee added at checkout.

However, the amount should still reasonably reflect actual processing costs to maintain compliance and customer goodwill.

Q. Can I use dual pricing online?

A. Yes, but implementation requires careful setup:

How it works:

  • Display both prices clearly BEFORE checkout (e.g., “$10.00 card / $9.70 ACH”)
  • At checkout, show both final totals before payment
  • System automatically charges based on payment method selected
  • “Cash” online means ACH/bank transfer/eCheck

Requirements:

  • Compatible payment gateway
  • Clear display of both prices throughout the shopping experience
  • Compliant with state-specific online pricing disclosure laws
  • Proper receipt generation showing discount when applicable

Note: Online implementation can be more complex than in-person due to shopping cart flows and state e-commerce regulations. Work with IntelliPay to ensure proper configuration.

Q. Do I need to train my staff?

A. Yes. Staff training is essential for compliance and customer satisfaction.

Customer-Facing Script: “We offer two prices—you save [amount] by paying with cash or ACH, or you can use your card at the listed price. Either way works!”

Staff Must Also Know:

  • How to process both payment types in your POS system
  • How debit cards are treated in your program
  • How to answer common questions (Why two prices? Is this legal?)
  • What to do if technical issues arise
  • Basic compliance requirements (this is a legal pricing program)

Key Message: Keep it positive and focused on customer choice and savings, not on your processing costs.

Practical Questions

Q. Will customers understand dual pricing?

A. Customer understanding depends on clear communication:

When presented well, customers typically grasp:

  • Two prices are displayed
  • Paying with cash/ACH saves money
  • They choose their preferred payment method

Customer Reception: Research shows customers respond better to dual pricing (framed as receiving a discount) than to surcharges (framed as paying a fee). However, any pricing program that differs from standard single-price models requires clear signage, staff training, and patience during the initial rollout period.

Best practices: Use simple language, prominent signage, and ensure staff can answer questions confidently.

Questions? Please reach out to one of our consultants.

Q. Won't card users feel penalized?

A. Customer perception depends on implementation.

Why dual pricing may work better than surcharges:

  • Card price is the advertised price (no surprise fees added)
  • Framing matters: cash users “save” vs. card users “pay extra”
  • Customers see pricing before choosing payment method

However:

  • Some customers will still feel they’re paying more for card convenience
  • Customer dissatisfaction is a documented risk
  • Clear communication and staff training are essential

Reality: While dual pricing is generally better received than surcharging, any program that differentiates pricing by payment method will create some customer friction. Prepare for questions and occasional complain

Q, How much will my business actually save?

A. The financial impact depends on payment method shifts:

On cash transactions: You save the full processing fee (2-4%)

On card transactions: You still pay processing fees, but customers now pay 3-4% higher prices, effectively covering your costs

Net result:

  • If many customers switch to cash = significant fee savings
  • If most stay with cards = you’ve shifted costs to customers via price increases
  • Overall impact varies by customer payment behavior in your specific business
Q. Do customers really switch to cash?

A. Some do, but actual switching rates vary significantly by business.

What influences switching:

  • Purchase size (larger amounts = more noticeable savings)
  • Customer demographics and payment preferences
  • Business type and location
  • Clarity of communication about the discount

Reality: Customer switching behavior is highly variable. Some businesses may see significant shifts to cash; others may see minimal change. The often-cited “20-30%” figure is not from verified public research.

Before implementing: Ask your payment processor for case studies from businesses similar to yours, and be prepared for the possibility that most customers may continue using cards.

Q. How quickly can I implement dual pricing?

A. 

Timeline: Typically 3-4 weeks

What happens:

  • Week 1-2: System setup and configuration
  • Week 2-3: Signage creation and staff training
  • Week 3-4: Testing and soft launch
  • Ongoing: Optimization based on results

Some businesses start with one location or product line to test before full rollout.

Q. Can I use dual pricing for online subscriptions?

A. Technically possible but more complex than one-time transactions.

What it would look like:

  • $10/month via card OR $9.70/month via ACH
  • Same billing frequency, different price by payment method
  • Customer chooses at signup

Complications:

  • Recurring ACH setup is more complex than one-time ACH
  • Failed payment handling differs significantly by method
  • Card network rules for recurring billing may have additional requirements
  • Customer service complexity when payment methods fail or need updating

Note: Consult your payment processor about support for dual pricing for recurring subscriptions and what compliance requirements apply.

Q. What if I operate in multiple states?

A. Multi-state operations significantly increase compliance complexity.

Reality: While dual pricing is generally permitted in all 50 states, implementation requirements vary considerably:

  • State-specific laws: California, Virginia, and others have different price transparency requirements
  • Signage variations: Requirements for size, language, and placement differ
  • Local ordinances: Cities and counties may have additional rules
  • Enforcement differences: How regulators interpret dual pricing varies by jurisdiction

What you need:

  • State-by-state compliance review
  • Different signage for different locations (potentially)
  • Staff training on location-specific rules
  • Legal counsel familiar with multi-state operations

Bottom line: This is NOT a “no problem” situation. Multi-state dual pricing requires careful legal planning and ongoing compliance monitoring.

 
 
 
 
 
 
Q. How do refunds work with dual pricing?

A. Basic principle: Refund the amount actually paid, but execution has complications.

Standard process:

  • Card payment ($10.00) → Card refund ($10.00)
  • Cash payment ($9.70) → Cash refund ($9.70)

Practical complications:

  • Cash refunds: Require physical cash on hand; not automated
  • ACH refunds: Take 3-5 business days to process
  • Receipt required: Staff need proof of original payment amount
  • Mixed scenarios: Customer may request different refund method than original payment

What you need:

  • Clear refund policy posted
  • Staff training on handling both refund types
  • Adequate cash on hand for cash refunds
  • POS system that tracks original payment method and amount

Reality: While conceptually simple, refunds with dual pricing require more staff attention and clear procedures than single-price refunds.

Q. Will this hurt my competitive position?

A. Impact varies and carries real risks.

Potential advantages:

  • If competitors don’t use dual pricing, your cash prices may be competitive
  • Some customers may appreciate payment flexibility

Potential disadvantages:

  • You’ve effectively raised prices 3-4% – customers may shop elsewhere
  • Customer dissatisfaction is a documented risk
  • Competitors can advertise simpler, single-price models
  • If competitors also adopt dual pricing, no competitive advantage remains

Advertising limitation: You must typically advertise the card price (the higher price), not the cash discount price, which limits competitive messaging.

Reality: This is a business risk decision, not a guaranteed competitive advantage. Consider your market, customer base, and competitor behavior before implementing.