2 ms·

Often a contractor/landscaper will give a nice discount (like 10%) if you pay them in cash. I assume they’re avoiding taxes but it’s none of my business.

traceroute66 4y ago
> Often a contractor/landscaper will give a nice discount (like 10%) if you pay them in cash. I assume they’re avoiding taxes but it’s none of my business. In comparison to what ? In comparison to bank transfer, then yes, maybe there's "funny business" going on. In comparison to card payment, then probably not. The "problem" with card payments from a small business perspective is three-fold: 1. You take a cashflow hit. Card companies typically sit on the cash for 5–7 days before allowing you to withdraw. 2. You take a fees hit, typically 1–2%, but AMEX are famous about charging more ! And that's just the transaction fee, if you are dealing with currency conversion then add a few percent extra... 3. The fraud risk (you do the job, someone pays on a card ... few weeks later, the card company claws the money back from you because either it wasn't their card or they did a fraudulent chargeback) Which is why small businesses tend to prefer the irrevocable nature of bank transfers. Yes you could say cash is technically irrevocable too, but it comes with other risks for the small business (counterfeit notes, employees taking from the till etc.etc.)
- nemo44x 4y ago
  Almost none of the contractors near me take credit cards. If it was a 3% discount then yes, I'd agree they are discounting that off. They generally want personal checks. Where I live there isn't an assumed risk of fraud or lack of funds so a personal check is a guarantee. I should be careful about saying "often". In my experience it has been something that contractors I've done work with numerous times might throw my way as a way for me to pay less and for them to accomplish whatever goal they have. For all I know they want cash so they can run to the casino.
balderdash 4y ago
I ask for cash discounts all the time and it’s crazy how often you’ll get one, my doctor even gave me one! Not sure it’s always tax avoidance, in my doctors case I just assume some portion covered the credit card fee, and some portion covered some reduced paperwork burden.
- nemo44x 4y ago
  If it's like a 3% discount it's probably a credit card fee they are discounting. 10% though is well more.

traceroute66 4y ago

> Often a contractor/landscaper will give a nice discount (like 10%) if you pay them in cash. I assume they’re avoiding taxes but it’s none of my business. In comparison to what ? In comparison to bank transfer, then yes, maybe there's "funny business" going on. In comparison to card payment, then probably not. The "problem" with card payments from a small business perspective is three-fold: 1. You take a cashflow hit. Card companies typically sit on the cash for 5–7 days before allowing you to withdraw. 2. You take a fees hit, typically 1–2%, but AMEX are famous about charging more ! And that's just the transaction fee, if you are dealing with currency conversion then add a few percent extra... 3. The fraud risk (you do the job, someone pays on a card ... few weeks later, the card company claws the money back from you because either it wasn't their card or they did a fraudulent chargeback) Which is why small businesses tend to prefer the irrevocable nature of bank transfers. Yes you could say cash is technically irrevocable too, but it comes with other risks for the small business (counterfeit notes, employees taking from the till etc.etc.)

nemo44x 4y ago
Almost none of the contractors near me take credit cards. If it was a 3% discount then yes, I'd agree they are discounting that off. They generally want personal checks. Where I live there isn't an assumed risk of fraud or lack of funds so a personal check is a guarantee. I should be careful about saying "often". In my experience it has been something that contractors I've done work with numerous times might throw my way as a way for me to pay less and for them to accomplish whatever goal they have. For all I know they want cash so they can run to the casino.

balderdash 4y ago

I ask for cash discounts all the time and it’s crazy how often you’ll get one, my doctor even gave me one! Not sure it’s always tax avoidance, in my doctors case I just assume some portion covered the credit card fee, and some portion covered some reduced paperwork burden.

nemo44x 4y ago
If it's like a 3% discount it's probably a credit card fee they are discounting. 10% though is well more.