What Is Dual Pricing? A Simple Guide for Small Businesses

What is dual pricing? Well, ever seen a sign at the checkout that says, “Cash Price: $10 / Card Price: $10.40”? Yes. That’s what it is!

More and more businesses are turning to this model. Why? Because of rising card processing fees. Every time a customer pays with a credit or debit card, your POS system processes the transaction—but each swipe cuts into your margins.

Now, of course, you could just raise your prices. But that would also push away customers who still use cash. In today’s economy, every customer counts.

Here’s where dual pricing comes in. It’s not a brand-new idea, but tech-enabled POS systems are making it easier and more compliant.

So, should you use it in your store? Is it even legal everywhere? What happens if customers push back? Let’s break the query “what is dual pricing” all down.

What Is Dual Pricing?

Dual pricing is exactly what it sounds like. You offer two prices at checkout:

1. One for customers who pay with cash
2. Another (slightly higher) for those who pay with a card

For example:

1. Cash price: $20.00
2. Card price: $20.60

That small difference helps you recover the cost of card processing fees. Most importantly, with modern restaurant POS or retail POS systems, this is handled automatically. The software knows how your pricing is set up and applies the correct amount based on the payment method the customer chooses.

Important distinction: dual pricing is not the same as surcharging and cash discounting.

• Surcharging = Adding a percentage on top of your listed price when someone pays with a card. This can feel like a penalty.
• Cash discounting = Listing the card price as the base price and applying a discount if someone pays cash.
• Dual pricing = Listing both prices upfront. No surprises.

You’re simply showing your customers their two options and letting them choose.

Why Do POS Systems Offer Dual Pricing?

Card processing fees are costly. For small businesses, those 2-4% fees can add up fast. Besides recording transactions, small business POS systems today are cost-control tools. With dual pricing, you can:

• Keep margins intact: You don’t have to bear the cost of processing fees every time someone swipes a card.
• Give customers options: Especially those who still prefer using cash.
• Keep pricing competitive: You don’t have to raise prices for everyone, only for card users.
• Reduce friction: Modern systems like OneHubPOS make it smooth and hassle-free.
• Comply with regulations: POS providers now build in tools that help you stay on the right side of state and federal rules.

How Dual Pricing Affects Customers & Businesses

Here’s how dual pricing impacts your daily operations.

Pros for Businesses

• You save on card transaction fees. That’s money you keep.
• You control your margins better without alienating loyal cash buyers.
• Your POS does the work, from showing both prices to applying the right one at checkout.

Pros for Customers

• Transparent pricing. There’s no “surprise” extra fee at the register.
• Choice. Customers can decide based on their own preference or what’s in their wallet.
• Some even appreciate knowing the “true cost” of paying with a contactless method.

Cons or Challenges

• Some customers might push back. “Why am I being charged more for using my card?”
  • Solution: Clear signage and simple staff explanations. “We offer a discount for cash payments. It helps us keep prices lower.”

• This could feel like a penalty to card users.
  
  • Solution: Frame it as a reward for cash, not a penalty for card. Language matters.

• Potential confusion.
  
  • Solution: Use a POS that shows both prices clearly on-screen, on receipts, and in signage.

• Legal compliance can vary.
  
  • Solution: Work with a POS provider that understands your state’s laws and helps you stay compliant. OneHubPOS is built with that in mind.

5 Things to Consider Before Choosing Dual Pricing

Now that you understand dual pricing, you might be wondering if it’s the right fit. Let’s walk through a few things to think about before flipping the switch.

Customer Profile

Do your customers tend to pay with cash? If you’re running a business setup in an area where people are used to paying cash, great. But if you’re in a high-income neighborhood where everyone uses Apple Pay or credit cards to order and pay, the model may need tweaking.

Transaction Size

Dual pricing works really well for smaller, repeat purchases. Think snacks, home essentials, convenience items. If you're selling high-ticket items, like electronics or furniture, a $20 price difference might trigger more resistance than a 40-cent one.

POS Support

Not all POS systems can handle dual pricing legally or clearly. Make sure yours can:

• Display both prices upfront
• Show them on receipts
• Apply the right one automatically
• Keep POS reporting clean for accounting

Legal Compliance

Dual pricing is legal in most U.S. states. But states like Connecticut and Massachusetts prohibit it. In states where it’s allowed, you must follow clear disclosure rules:

• Prices must be posted visibly.
• The difference between cash and card pricing should be obvious to customers.

Always check with your state’s attorney general or a compliance expert before implementing, as laws can vary or change over time.

Brand Tone

Ask yourself: “Will my customers see this as smart business or shady business?” If your brand vibe is relaxed, transparent, and community-focused, customers are more likely to trust that you’re just keeping things fair and sustainable.

If You Choose Dual Pricing: How to Introduce It to Your Business

You’ve decided to go for it. Now the question is how do you actually roll it out? Here’s a simple playbook:

Start with Clear In-Store Signage

Put it at the entrance and on every receipt. Keep the wording friendly:

“Paying with cash? You’ll pay less!”

Not:

“We charge more for card payments.”

Big difference in tone!

Train Your Staff

Make sure every team member can explain the model in 1–2 sentences. Just enough to make customers feel informed, not ambushed. For example:

“We use dual pricing so we can avoid raising prices across the board. If you pay with cash, you save a bit.”

Update Your POS System

If your current POS doesn’t support dual pricing out of the box, consider switching to one that does. Before buying the POS system, make sure it:

• Displays both prices clearly
• Applies the correct one automatically
• Keeps you compliant
• Doesn’t require custom workarounds

Pilot Test It

Don’t apply dual pricing across every business location in one go. Try it at one location or with one category of products/services. Then, see how customers respond. Finally, tweak your messaging at every location using a cloud-based POS system as needed.

Communicate Benefits

Focus your messaging on benefits, not fees. Use language like:

• “You can save by paying with cash.”
• “Cash price available.”
• “We're rewarding our cash-paying customers.”

If You Don’t Choose Dual Pricing: What Are Your Alternatives?

But what if dual pricing is not for you? No worries! There are still ways to tackle rising fees.

Absorb the Fees

Stick with a single price for everyone and simply factor card fees into your overall costs. It keeps checkout super simple and friction-free. But the con? You’ll be covering the fee yourself, which can add up over time.

Raise Prices Across the Board

Simple move. But not fair to cash payers. It’s like punishing everyone for the few who use cards.

Loyalty or Rewards Instead

Instead of tweaking prices, offer loyalty points or discounts for behaviors you want to encourage.

Cash payment = extra stamp on their loyalty card or a discount coupon for the next purchase.

This feels more like a bonus than a fine.

Negotiate Lower Processing Rates

If you're doing decent volume, talk to your payment processor. You might be able to lower your fees just by asking. OneHubPOS offers low processing fees of 2.3% + 10 cents. It can save you a ton in the long run.

Consider Cash Discount Programs

When comparing dual pricing vs cash discount, you’ll see that the two models are similar but not identical. With a cash discount, you list the card price as the default and offer a discount for cash. Different mechanisms. But similar goals. Worth exploring if dual pricing feels too direct.

Should You Use It?

POS dual pricing is one of the most transparent, tech-supported, and customer-conscious ways to fight back against rising transaction fees. It helps you stay profitable without punishing everyone equally.

But like any pricing change, it needs to be done thoughtfully.

• Do you know your customer base?
• Do you have a POS system that makes it seamless and compliant?
• Are you prepared to communicate it clearly?

If your answer is yes, then it’s time to implement.

Thinking about trying dual pricing? OneHubPOS makes it super easy, from pricing logic to reporting. It can:

• Automatically applies the right price
• Displays both options on-screen and on receipts
• Keeps you legally compliant
• Gives you tools to explain it clearly to customers

Book a demo today to see how OneHubPOS handles dual pricing and how much you could save just by offering two options at checkout.