Can I do Cash Discounting in Massachusetts?
Yes, please see below.
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Massachusetts specifically bans surcharging per Mass. Gen. Laws Ann. ch. 140D §28A:
Mass. Gen. Laws Ann. ch. 140D, §28A
(a)(2) No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means.
Massachusetts revenue statutes specifically allow a properly structured discount program:
Mass. Gen. Laws Ann. ch. 140D, §28A
(a)(1) With respect to a credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay cash, check or similar means rather than use a credit card.(b) With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, check or other means not involving the use of an open-end-credit plan or a credit card shall not constitute a finance charge under section four if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously.
Notes:
The language regarding how a discount is viewed and what qualifies is not specific, and it is important to understand that in a state like Massachusetts, it is critical to utilize best practices. For a cash discount program to work in Massachusetts, you must ensure that the following are in place:
- the ability for a customer to view “full-price” or “non-cash” prices prior to the checkout experience (See our QR program).
- a service fee, credit card fee, or other fee is not itemized on the customer receipt
- program language should not reference a “cash discount” unless the customer receives a bonafide and itemized discount on their receipt
- the customer receipt must disclose that the credit paying customer did not receive a cash discount