As a business owner, you’re always seeking more innovative ways to reduce operational costs without sacrificing customer satisfaction. One significant expense is credit card processing fees, and if you’re in a high-risk industry like cannabis, vape, or e-commerce, those fees can be even higher.
To offset these costs, many merchants are exploring creative pricing strategies. Among the most popular (and most debated) are:
- Dual Pricing
- Surcharging
- Cash Discounting
At first glance, they all seem to achieve the same goal: passing the cost of card processing onto the customer. But each method has unique rules, legal implications, and customer experiences—and not all are legal in every state.
In this guide, we break down each pricing model, compare them side by side, and explain how Spectrum ePay can help you implement a fully compliant solution that works.
Understanding the Basics: Definitions First
Dual Pricing
Dual pricing displays two separate prices for each product or service:
- A lower price for customers paying with cash
- A higher price for those using a credit or debit card
The key here is transparency; both prices are clearly displayed before the transaction, allowing customers to make an informed choice. This strategy is legal in all 50 states and is often the most compliant and consumer-friendly option.
Surcharging
Surcharging involves adding a fee or percentage to a transaction only when a customer pays with a credit card. For example, a $100 transaction might incur a 3% surcharge, resulting in a total of $103.
Surcharging is regulated at both the state and card brand level. As of 2025, ten states still restrict or prohibit surcharges, and merchants must adhere to strict disclosure and signage requirements to remain compliant. Also, note that debit and prepaid card surcharges are never allowed, even if processed as a credit.
Cash Discounting
In a cash discount program, the business sets a higher standard price (similar to the credit card price) and offers a discount only when the customer pays with cash. Unlike dual pricing, the discount is typically applied at checkout, rather than being shown on product labels.
This model is legal in most states, but customer perception can vary—especially if the signage or receipt doesn’t clearly show the standard vs. discounted pricing.
Comparison Table: Which Strategy Fits Best?
To help you better understand the differences, here’s a table comparing the three pricing strategies:
| Feature | Dual Pricing | Surcharging | Cash Discount |
|---|---|---|---|
| How it Works | Displays two prices (card and cash) | Adds a fee for credit card payments | Offers a discount for cash payments |
| Legality | Legal in all 50 states | Prohibited or restricted in some states | Generally legal in all 50 states |
| Transparency | Highly Transparent – both prices shown upfront | Medium – fee added at checkout | Medium – can be confusing, discount at checkout |
| Customer Perception | Generally Positive | Often seen as a penalty by customers | Mixed, may be unclear |
| Best Use Case | Businesses seeking Full compliance | Where legally permitted and disclosed | Businesses with lower cash transaction volume |
Which Pricing Strategy is Right for Your Business?
The best pricing strategy for your business will depend on your specific needs and goals. Here are some factors to consider:
- Your Location: If you operate in a state where surcharging is prohibited, then dual pricing or a cash discount program are your only options.
- Your Customer Base: Consider how your customers will react to each pricing strategy. Dual pricing is often seen as the most transparent and fair option.
- Your Business Goals: If your primary goal is to eliminate processing fees, then dual pricing is the most effective solution.
Pro Tip: Regardless of the strategy, customer education and proper signage are key to avoiding confusion, chargebacks, or compliance issues.
The Problem with Workarounds
Over the last two decades, many “creative” solutions have emerged to solve the problem of credit card fees—especially in cannabis and other high-risk industries. You may have heard of options like:
- mTrac
- LedgerGreen
- Green Solutions
- Crypto swaps or point redemptions
- Voucher programs
While innovative, these models often skirt regulatory gray areas—and most haven’t lasted. Some rely on unstable third-party ecosystems or require customers to complete complex steps (e.g., converting funds into crypto or “buying rewards” before redeeming). These are not sustainable, scalable, or compliant in the long term.
The SpectrumePay Advantage
At SpectrumePay, we specialize in providing compliant and effective dual pricing solutions for businesses of all sizes, including those in high-risk industries. We can help you navigate the complexities of payment processing and choose the pricing strategy that is right for you. Our team of experts will work closely with you to develop a program tailored to your specific needs and goals.
Ready to take control of your credit card processing fees? Contact SpectrumePay today to learn more about our dual pricing program and how we can help your business succeed.
