Surcharge vs Cash Discount Calculator

How it is calculated

The tool compares what a merchant keeps per sale under two strategies. With a surcharge, the card customer pays price × (1 + surcharge ÷ 100) and the processor takes the fee percentage of that larger total, so surcharge net = total − total × fee ÷ 100. With a cash-discount program, the customer pays cash and takes the discount, so cash-discount net = price × (1 − discount ÷ 100) and no card fee is owed. The difference is the first minus the second.

Price is in dollars; fee, surcharge and discount are percentages. Price must be above zero, the fee at least 0 and below 100, the surcharge not negative and the discount between 0 and 100; otherwise there is no result. If surcharge or discount is left empty, each defaults to the fee. The discount changes only the cash-discount figure and the surcharge only the surcharge figure. The tool does not check whether a surcharge is legal or capped where you operate; rules vary by state, country and card network.

Common mistakes

• Treating the two nets as the same customer experience. The surcharge customer pays $103.00 by card, while the cash-discount customer pays $97.00 in cash, so the nets belong to different customers.
• Setting the surcharge equal to the fee and expecting a full cost recovery. The processor also charges its fee on the surcharge amount, so a 3% surcharge returns slightly less than 3% net ($99.91 rather than $100).
• Leaving the discount empty and assuming it is zero. An empty discount defaults to the fee percentage, not to 0; enter 0 if you offer none.
• Entering the fee in dollars. The fee is a percentage of the sale, such as 3, not 3.00 dollars.
• Assuming a surcharge is allowed at any rate. Limits and bans differ by state and card network, and the tool does not check them.