An Aussie supermarket is offering customers discounts on their groceries if they pay in cash. Paying by card has become the norm for many Aussies but some businesses are encouraging customers to buck the trend.

The IGA in Richmond, Tasmania is giving a 5 per cent discount to customers who choose to pay with cash. Owner Kosta Tzortzis told Yahoo Finance he hoped the small discount would encourage customers to keep using cash, as well as help elderly customers and those who don’t use bank cards.

“When you take into account all the bank fees and the transaction fees, small businesses don’t get to see much of the cash,” Tzortzis said.

“You pay $50 by card by the time you do 10, 15 transactions there’s not much of it left with all the fees and surcharges. Whereas cash is cash and 10, 15 transactions later it is still $50.”

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Tzortzis, whose father bought the shop in 1980, said digital payments had overtaken cash as the primary payment method for customers. Overall, the Reserve Bank of Australia (RBA) found cash payments accounted for 13 per cent of consumer payments in 2022.

Before the IGA introduced the discount nearly two years ago, Tzortzis said around 80 per cent of customers were paying by EFTPOS and 20 per cent by cash. Now, the discount has “pushed it back a little bit” to be 70 per cent card and 30 per cent cash.

"People are still coming in and paying with their phone or their watch. It's scary the way things are going," he said.

Many Aussies have praised IGA Richmond for offering the discount, with one calling the owner a “legend” and others online saying they wished their local IGA introduced the same policy.

Along with fees for merchants, the costs associated with paying by card can be passed on to customers. Aussies collectively spent $1 billion on surcharges last year, with recent analysis by Canstar finding the average Aussie was paying an average of $140 a year.

“I get slugged with the surcharges and if I have to accept cards, I pass on the surcharge that I get charged back to the customer,” Tzortzis said.

“I’ve managed to get my surcharges down to 0.35 per cent for credit cards like Visa or Mastercard. If it is a pure bank card there is no surcharge.”

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More businesses offer discounts for cash

There are a growing number of Aussie businesses giving discounts to customers who want to pay with cash. Yahoo Finance has found offers of up to 50 per cent off, while others give away a free drink or item.