Credit card processing fees continue to put pressure on golf course profitability. To help recover these costs, many operators turn to one of two strategies: surcharging or cash discounting. While both methods aim to offset processing fees, they operate differently, come with distinct customer experiences, and must be implemented carefully to remain compliant.
Below, we break down each approach, along with the pros, cons, legal considerations, and technology recommendations.
What’s the Goal?
Both surcharging and cash discounting are designed to do the same thing:
Offset the cost of credit card acceptance by passing that cost to the customer, either by charging a fee for credit card usage or offering a discount for paying with cash.
Option 1: Surcharge
A surcharge is a fee applied only when a customer pays with a credit card. The base price remains the same, and the fee, usually up to 3%, is added at checkout to cover processing costs.
Legal and Compliance Requirements:
- Credit Cards Only: Surcharges can only be applied to credit card transactions, not to debit or prepaid cards, even if they’re run as credit.
- Fee Limits: The surcharge cannot exceed the merchant’s actual processing cost or 3%, whichever is lower.
- Required Disclosures: Merchants must display signage at the point of entry and point of sale, and show the surcharge clearly on the receipt.
- State Restrictions: Some states prohibit or restrict surcharges (e.g., Connecticut, Massachusetts, Maine). Be sure to check current laws in your state.
Pros:
- Offsets most or all credit card processing fees
- Pricing transparency is preserved – no need to raise posted prices
- Easier to implement without adjusting all listed prices
- Legal in most states when executed properly
Cons:
- May cause friction with customers if not explained clearly
- Cannot be applied to debit cards – doing so may result in fines
- Compliance requirements can be complex
- Not permitted in all states
Important Note: Use BIN Check Technology
To surcharge legally and protect your business, it is critical to work with a payment processor that offers BIN check technology. This system automatically detects whether a card is credit or debit in real time and ensures that surcharges are only applied to eligible transactions.
Teesnap’s preferred payment processor, Global Payments, utilizes BIN check technology. With Global Payments, merchants are protected from accidental surcharges on debit cards and are always kept compliant with card brand rules and federal law.
Option 2: Cash Discount
A cash discount program offers customers a lower price when they pay with cash. The prices displayed on menus, websites, or signage include the card processing cost, and a discount – usually 3–4% – is applied at checkout if the customer pays with cash.
Pros:
- Legal in all 50 states
- Viewed more positively by customers than surcharging in many cases
- Encourages more cash payments, which reduces processing volume
- No restrictions on debit vs. credit use
Cons:
- May require changes to pricing display and signage
- Customers may be confused if not communicated clearly
- Cash handling introduces risks of theft, counting errors, and longer transaction times
- Can increase back-office complexity if managed manually
Recommendation: Use a Point of Sale with Built-in Cash Discounting
Manually applying cash discounts is prone to error and creates unnecessary complexity at checkout. To do this right, you should use a POS that supports automated cash discounting.
Teesnap has a built-in Cash Discount feature that:
- Automatically detects the payment method
- Applies the appropriate discount for eligible cash payments
- Allows you to designate which products or services are eligible for a discount and which are not (e.g., memberships or alcohol sales)
- Keeps reporting clean and consistent for staff and accounting
This removes guesswork and ensures the program runs smoothly with minimal staff training.
Choosing the Right Fit for Your Course
When deciding between surcharge and cash discounting, consider the following:
- What does your customer base prefer or tolerate?
- Are you operating in a state where surcharging is allowed?
- Do you have the right technology and support to stay compliant?
- How do you currently handle cash? Are you prepared for the risks?
- Which option is easier for your staff to explain and manage consistently?
Also, consider your long-term brand positioning. Some operators prefer to keep pricing flat and recover fees behind the scenes, while others find cash incentives align well with customer behavior.
Final Thoughts
Both surcharge and cash discount programs offer legitimate ways to offset credit card fees, but each comes with important operational and compliance considerations.
If you choose to implement a surcharge, make sure you work with a processor like Global Payments, which uses BIN check technology to ensure you never apply a surcharge to a debit card by mistake, keeping you compliant and protected from fines.
If you prefer a cash discount model, use a Point of Sale like Teesnap that automates the discount process, reduces the risk of error, and gives you full control over which items are eligible.
The right choice depends on your local laws, customer preferences, and operational structure. Whichever model you choose, transparency, consistency, and compliance are key.
Want help deciding which path is right for your course? Teesnap works with hundreds of operators to implement secure, compliant payment strategies that align with your goals and protect your business.
Let’s build the right solution for you.
Click here to schedule a demo with a member of our team.
