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>Companies now discount all customers 3% which gets them an additional 1% from cash back.

What's the incentive for a company to discount their prices? Why not just keep them where they are, and pocket the higher profits?




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.




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