Can I Give a Discount to a Parent who Pays in Cash?

As a family child care provider you may receive payments in the form of cash, credit card, electronic bank transfers or payments from a subsidy program for low income families.

Since cash has the advantage of being immediately available, you can give parents a discount if they pay you in cash.

Can you give a discount for parents who pay you a week or month in advance? Yes.

This is not illegal discrimination. It does treat parents differently, but it's legal to do so for these reasons.

If you are just starting out and want to offer discounts, set your rate and then give a discount. So, if your rate is $200 a week, you could offer a 3% discount ($6) and charge $194 for those who pay cash or two weeks in advance.

If you have already set your rates at $200 a week and want to offer a discount, raise your rates by $6 a week and give a $6 discount for those who pay cash or in advance.

You don't have to offer any discounts. It's up to you.

Discounts for cash payments or payments in advance may run afoul of your state's subsidy program.

If a worker from the subsidy program tells you you can't offer such discounts, ask to see the rule that prohibits this. Sometimes a subsidy worker might conclude that your discounted rate is your actual rate, and try to reduce your subsidy payment. In the second example above, you would say that your rate is $206, not $200.

Do you offer discounts, and if so, what for?

Tom Copeland - www.tomcopelandblog.com

Image credit: https://pix4free.org/photo/11752/discount.html

For more information about discounts, see my book Family Child Care Contracts & Policies.