A few days after taking our eleven lambs to the butcher shop, I got an interesting phone call from the owner. He’d nearly finished processing them, and said they’d be ready for pickup in two days. The call came fairly late in the evening, after the shop’s closing time, and I could hear plenty of activity in the background. It sounded like they were indeed swamped with work, and I was thankful they’d been able to work our eleven lambs into their schedule.
He then told me what the total price was going to be. The standard charge would be $55 per lamb, or $605 altogether. (I usually put that on a credit card.) However, he continued, if I wanted to pay cash…he would drop the total to $500.
Needless to say, that’s a pretty substantial discount. Some readers may suspect that cash payments are merely a way for a shopkeeper to evade taxes; I can’t speak to that…what I do know is that the guy who runs this shop strikes me as a very honest and upstanding person. And I will say this: credit card companies can charge some fairly steep transaction fees, especially for merchants with relatively lower sales volume. For the savings he was offering, I was perfectly happy to go to the ATM and withdraw what was needed (though, being a hard core Casablanca fan, I must confess that I couldn’t stop thinking about this classic scene the whole time I was doing it — the key clip comes at about 1:15 on the linked video).
Given current economic conditions, and that all of us are looking for ways to save some money, I wonder if we will see “cash discounts” become more widespread. I like using credit cards for the convenience, the “float” on the use of the money, and the rewards benefits. (We pay in full each month, so there are no finance charges.) But if merchants are willing to offer a lower price for the use of cash, so they can avoid the CC fees, I’ll leave the credit card in my wallet and pay with cash.
Is anyone else out there starting to see more “cash discounts” being offered? I’m starting to think it might even be worth asking merchants straight out, especially smaller shops and tradespeople, what kind of discount they would be willing to offer if we pay in cash.