The logic would be companies are already paying 3% in processing fees that is expensed, and used by the consumer to spend those 'rewards' at other merchants. H

The logic would be companies are already paying 3% in processing fees that is expensed, and used by the consumer to spend those 'rewards' at other merchants. However, by 'discounting' at the POS, consumers walk into the store prepared knowing they have a 3% off coupon and are more likely to spend more money. If the amount spent on average increases sales by even 3%, their fees net out.