Although customers love larger Cash Discounts, we typically do not recommend a cash discount greater than 4 cents on the dollar for most retailers; however, 5 cents on the dollar for tipped businesses i.e. restaurants and salons maybe prudent because for tipped merchants, the math is not always perfect because you don’t know ahead of time what percentage each client will tip you; however, 5 cents on the dollar will usually get you very close to achieving the goal of ‘dual pricing’ which is to remain with the same dollar amount in your bank account at the end of the day as if everyone paid you in cash.
Therefore, you simply, determine how much money you want left in your bank account from the sale of each item or SKU on your menu or price list after all payment processing costs are covered. That will be your Cash Price. Multiply the cash price by 1.04 for retailers or 1.05 for tipped businesses and that will be your Regular Price. The POS software can do the math for you. Pretty simple!
Example: If a Brewery wants $5.00 at the end of the day for a given pint of beer, they would determine the cash price at $5.00. And since $5.00 x 1.04 = $5.20, they could list the Regular Price at $5.20; however, if they expected tips on many of their transactions they would list the Regular Price at $5.00 x 1.05 or $5.25