discount for cash?

[Rockabilly Spike]

whats this country's obsession with this phrase?

i hear it every day at work.

i fully accept that everyone the world over is looking for a bargain/good deal.

in the 21st century, why does the method of payment indicate the amount of discount that could be offerred?

i don't see the point of still using this question as a bargaining tool. Surely the only way a cash sale is more preferrable to any other method is if there is something dodgy going on, like the store is cooking its books and not putting all their sales through the tills.

i fully accept that someone might be up for haggling for a better deal because their budget only stretches so far.

but haggling over the payment method?

it makes no difference to large retailers, generally if the payment is via card, cash or finance agreement.

i know with the store i work for, if we take more than a certain amount in cash per day, it doesnt get dropped in a box into the nightsafe at the bank, it has to be taken away by a security firm.
which actually costs more than paying by any other method.

so what is it?

which stores DO discount for cash payment?

ASDA?
McDonalds?
Argos?

I'm not a kid either, i'm 31 and have worked in sales all my working life.
it amazes me that people still throw this phrase around every single day.

[Ramrod]

it makes no difference to large retailers, generally if the payment is via card, cash or finance agreement.Companies like streamline (which facilitate the card payments) charge businesses money to use their facility. For instance, if one of my patients pays with a debit card I don't get charged anything. Credit card charges vary depending on the CC. I refuse to accept American Express as I get charged a couple of pounds per transaction. Cash is a problem (as are cheques) as banks charge me for each £100 deposited and 65p per cheque deposited.
I prefer debit cards......

[Bulky]

being in the building trade this takes a whole new meaning , i work as a joiner in a small manufacturing business which has a timber merchants attached to it , the reason people ask is their any discount for cash is because they are trying to avoid paying VAT , i hate to say it but it i rife in this trade. We always kindly tell them that it doesn't matter how they pay the payment would be the same but you wouldn't believe the amount of people that really try to 'push' the issue :( , really gets on my nerves. The only place imo that does discount for cash are dodgy (definately in the building trade anyway !!)

[kryogenik]

so what is it?


I think you're looking way too literally into the phrase.
A lot of the time, it's just a way of asking for a discount without directly cheekily saying 'will you give me a discount', that's all. The fact that it's cash usually has little or nothing to do with it. I think you'd find anyone turned down will probably walk away, not put their cash away and get the plastic out instead. :) It wouldn't make sense.

But lots of private traders like cash in their pockets. Doesn't mean its a dodgy deal.. Might just mean they don't have to go to the bank for their/their employees wage/buying in/night on the tiles on a Friday so are prepared to knock a few quid off.

[Rockabilly Spike]

thanks, I had no idea there were private and independent traders that still paid wages cash in hand.

Its been a long time since I worked for one.

In the town I live in, South Shields, because its a market town, i think this is generally why i hear it a lot more than some other places may do.

most of the customers who ask for discount for cash will indeed walk away if its declined, mainly cos they're trying to make something outside of their budget, become within in.
Some are just generally trying it on and will still pay the final asking price in paper notes.

[alferret]

Does it hurt to ask?

I have always asked, right from the early 80's when debit\credit cards were availiable but a bit more of a cost to the retailer.
I got a 28" nicam TV in 89 for £450 from a local electrical shop when the ticket price was £595 and I got a free Tv stand as well (another £40 saving) by asking "how much for cash" and haggling.

I still say it and will continue to say it, I dont force the cash issue if they say no discount then thats it i'll pay by CC or debit.

I wouldnt go into a major retailer and ask but some small shops are quite happy to drop 5% or so if asked. As long as they are able to make a profit then a sale is a sale.

[Rockabilly Spike]

it probs doesnt hurt to ask in an independent retailer.

however in large chains and from just about any customer spending more than £100, it can get old really quickly.

[brundles]

If it's a large retailer or franchise of some sort I won't ask - far too many audit trails and processes for it. But if it's an independent doing some work for me then I'll usually ask. Remember that it's easier for a service (i.e. their time and skills) to never hit the books that materials - having them just disappear from stock never looks good. That said, no is no - I won't push it.

I also tend to accept that sometimes this may mean not getting a receipt, but if it's someone I know and expect there to be more work later I don't tend to worry too much about that - and haven't been burnt yet.

[Russ]

It's endemic in some cultures too. When I used to work at the DVLA I was in the department that sold personalised registration marks and whenever a customer who had, shall we say an Asian or Middle-Eastern sounding name, they would ALWAYS demand a discount. They were under the impression we were commission based and had targets to meet and tried to use it against us. It never worked as the prices were set and no-one but no-one ever had a discount, even when they offered to turn up with cash (like they'd drive all the way down to Swansea to get a few quid knocked off).

[frogstamper]

In my case this was something I used to ask a builder, plumber or tradesman in the 80s, knowing full well the guy would then avoid paying the VAT, I used to think it was a win win for both of us.
Its not until you have a problem with the guys work that you realize its just not worth it, nowadays if a tradesman were to offer me discount for cash I wouldn't hire him.

[Rockabilly Spike]

So far I'm still quite confused as to why people still do it.

though the net is filled with sites telling you how to haggle in stores like Comet and Currys, Fenwick and John Lewis.

no haggling to be done in Argos?
Tesco?

I know whats actually meant "What discount are you gonna give me off the ticket price so i can walk outta here with my product feeling like I'm some kinda hard bargainer & I can go laud it over my friends and you won't earn as much commission from me"

Everyone wants a 'deal sweetener', but I often think when the deal is already pretty darn sweet, whats the point of pushing it?

I had a lady customer a few days ago who wanted to buy a package of 3 certain products and she had a set budget in mind, which to be brutally honest, just want enough, not even close.
She kept telling me i wasnt doing her a good deal and I kept telling her in the nicest possible way that she was being unrealistic to think she could get these products within her budget and I knew that any of our competition would be exactly the same.

She told me "We're talking cash here ya knaaaa!"
she also told me how the items werent for her but for her 'bairns'.

My manager has a strict policy on discount-only if its price matching another store or if the customer is spending over a certain amount and complains about the delivery charge set by the company as a whole on all items.

[Chris]

I think for some people it's a habitual phrase when bargaining. Words and phrases don't necessarily drop out of the language as soon as they become obsolete (my grandmother referred to the 'wireless' until the day she died. And plenty of people still refer to the national speed limit sign as a 'derestricted' sign, even though there have been no derestricted speed limit roads in this country for decades).

Doubtless there was a time when cash was more convenient for a retailer than a card, because the fees and processing time for card payments were higher than for cash. However these days it can easily be the opposite in many cases.

Many large retailers are now employing an apparently perfectly legal VAT dodge whereby they divert part of your card payment (about 2.5% IIRC) to a 'card handling subsidiary company', thereby forcing you to 'pay' for a service that is not VATable, while at the same time not altering the face value of your bill in any way. They make a few extra pennies on each card sale this way, which when you have a turnover the size of Tesco's, adds up to a fairly hefty extra whack on their bottom line.

[Russ]

I have a mate who loves to haggle for things like carpets or electrical goods. I was with him once when he wanted to buy a carpet and he showed me what he calls his 'foolproof' trick.

The carpet came to £590 and he only wanted to pay £540. The salesman didn't want to budge so my mate handed over the discounted amount in cash before telling the sales guy how much it was - then he said "There you go, there's £540, I'll take the carpet" - and he had it for that price.

The trick there is to physically give them the cash - very few salespeople will want to give back the cash once it's been in their hands.

[Watching You]

whats this country's obsession with this
I'm not a kid either, i'm 31 and have worked in sales all my working life.
it amazes me that people still throw this phrase around every single day.

That’s my favourite phrase.

Because we are a nation of traders (OK shop keepers) but there is nothing wrong with haggling for a discount.

When I brought, my laptop was prepared to pay with a credit card but the store offered me a discount of £70 for cash, in the end did a part credit card cash deal. In this day and age the majority of stores like CASH because when people pay by credit cards there is a sixty day wait to get their money, shops have to pay bills, typically due in 30 days.

On top of this credit cards charge for the privilege of using their network, so they raise millions to sponsor the World Cup and Olympics.

There is nothing wrong with a discount – only never buy an airline ticket with cash.

[AndyCambs]

Companies like streamline (which facilitate the card payments) charge businesses money to use their facility. For instance, if one of my patients pays with a debit card I don't get charged anything. Credit card charges vary depending on the CC. I refuse to accept American Express as I get charged a couple of pounds per transaction. Cash is a problem (as are cheques) as banks charge me for each £100 deposited and 65p per cheque deposited.
I prefer debit cards......
Funny you should mention that but when I go to my dentist, they charge 35p to use either credit or debit cards, and nothing for cheque..

[Rockabilly Spike]

the store i work for pays the credit card fee for you.
no extra charge at all.

no extra charge for cash even tho it costs is more to bank it.
hence no discount unless its a price match.

[Nikesh]

Funny you should mention that but when I go to my dentist, they charge 35p to use either credit or debit cards, and nothing for cheque..

Same at my dentist. :)

I don't use the phrase 'discount for cash'... I'm a student, so I always ask for student discount. ;)

[Damien]

That’s my favourite phrase.

Because we are a nation of traders (OK shop keepers) but there is nothing wrong with haggling for a discount.

When I brought, my laptop was prepared to pay with a credit card but the store offered me a discount of £70 for cash, in the end did a part credit card cash deal. In this day and age the majority of stores like CASH because when people pay by credit cards there is a sixty day wait to get their money, shops have to pay bills, typically due in 30 days.

On top of this credit cards charge for the privilege of using their network, so they raise millions to sponsor the World Cup and Olympics.

There is nothing wrong with a discount – only never buy an airline ticket with cash.

Buying with a card offers some protection though, cash offers none.

[SMHarman]

Many large retailers are now employing an apparently perfectly legal VAT dodge whereby they divert part of your card payment (about 2.5% IIRC) to a 'card handling subsidiary company', thereby forcing you to 'pay' for a service that is not VATable, while at the same time not altering the face value of your bill in any way. They make a few extra pennies on each card sale this way, which when you have a turnover the size of Tesco's, adds up to a fairly hefty extra whack on their bottom line.http://www.accountancyage.com/accountancyage/news/2146396/debenhams-loses-lords-appeal
Not anymore...
Retailers – the Debenhams decision
The House of Lords has refused leave for the retailer Debenhams to appeal against the Court of
Appeal’s decision in what has become known as the ‘merchant charges’ VAT case. The issue in
Debenhams was the lawfulness of a tax avoidance scheme implemented by Debenhams and over 80
other well known High Street retailers to reduce the amount of VAT they paid to HMRC. The
arrangement attempted to exempt from VAT a separate charge made for payment by credit card
when a customer paid for goods. The House of Lords decision concludes the litigation on this
matter in the UK and now means that as things stand a retailer makes a single taxable supply to its
customer at the full retail price and that there is no separate exempt supply of services to the
customer by the retailer’s card handling company.
Retailers who have implemented the merchant charges arrangement should now seek advice on
how to unwind the scheme as efficiently as possible.
http://www.tenongroup.com/Services/Tax/_Downloads/VAT_Matters_December_2005.pdf
---------- Post added at 16:55 ---------- Previous post was at 16:39 ----------

When I brought, my laptop was prepared to pay with a credit card but the store offered me a discount of £70 for cash, in the end did a part credit card cash deal. In this day and age the majority of stores like CASH because when people pay by credit cards there is a sixty day wait to get their money, shops have to pay bills, typically due in 30 days.Not true - most credit card recievables are paid over to the merchant promptly. I bank with HSBC and use HSBC merchant services, credit card recievables are deposited overnight.
Now, if you have a record of chargebacks or fraud or are in a financially shakey industry with large pre sales (say airlines where people book flights months in advance) then monies will be held back but the average merchant gets their money promptly.
Now, discount for cash. Well if I need to bank that cash then I will be charged for the deposit and then per the hundred of the cash, similarly for cheques I will be charged for the deposit and then a per check amount.
Sounds similar to being charged a processing fee and a % for taking the credit card right - I also need to get those checks / cash to the bank.

Historically the cash discount has been a means of VAT /PAYE avoidance. Say you have a building job for 1,000 or 1175 with vat and 200 of parts you offer to do it for say 1100 you have to eat the vat on the 200 you are buying in and then pay your team cash and keep the balance yourself. The wonders of the black economy.

---------- Post added at 16:58 ---------- Previous post was at 16:55 ----------

the store i work for pays the credit card fee for you.
no extra charge at all.

no extra charge for cash even tho it costs is more to bank it.
hence no discount unless its a price match.Yes but nowdays they do have the option to recover the card processing fee from the customer, as is being shown in examples here, the 35p for paying by debit / credit card. In all cases you have to offer one payment method with no additional fee. Ryanair uses Visa Electron - probably because nobody has one!

[Chris]

http://www.accountancyage.com/accountancyage/news/2146396/debenhams-loses-lords-appeal
Not anymore...


2005? There are loads of retailers still advertising this scheme at their checkouts! Has anything happened since that ruling?

[SMHarman]

2005? There are loads of retailers still advertising this scheme at their checkouts! Has anything happened since that ruling?I'm not sure - I did see the date and the Tenon article clearly states the retailers are out of appeals having taken it all the way up the chain. Personally I think this was the right decision as it benefitted large retailers to the detriment of the smaller retailer who could put such a scheme in place but the costs of running it would outweigh the income uplift.
Perhaps the orderly unwind, changing system coding, closing down legal entities etc is more awkward than leaving it in place and paying vat on both parts.