Random contractor payment question

[ghostrunner]

Has anyone ever heard of a contractor offering a 5% discount for cash payment? Does that seem sketchy? Asking bc it was a big exterior renovation, work is done and we're happy with it, and the discount would be a pretty significant amount. About $1K.

I'm not even sure how to go about withdrawing the amount I'd need beyond going to the ATM and maxing out withdrawals few days in a row, which leaves me with an exorbitant amount of cash on hand for a few days.

[New Pagodi]

Living in an older part of St. Louis, my friends have a lot of work done on their places. Cash discounts are a somewhat common thing. But it probably is for sketchy reasons though.

[haltz]

Has anyone ever heard of a contractor offering a 5% discount for cash payment? Does that seem sketchy? Asking bc it was a big exterior renovation, work is done and we're happy with it, and the discount would be a pretty significant amount. About $1K.

I'm not even sure how to go about withdrawing the amount I'd need beyond going to the ATM and maxing out withdrawals few days in a row, which leaves me with an exorbitant amount of cash on hand for a few days.

Yes I've been doing this kind of work for a while now and this is fairly common. Not really sketchy as far as it concerns you. Between him and the government, yes. It's just reported income tax shenanigans. Maybe one of the accountants or lawyers can weigh in here.

Do you bank online? If not you could just walk in and withdraw it over the counter.

I would want a receipt or invoice on your end just so you have proof that you paid.

[BottenFieldofDreams]

Sounds like tax dodging to me, but here’s a stupid question, would a contractor have to pay VISA 1.8% or whatever?

[Leroy]

I love it. I'll give you a break if you help me cheat on my taxes.

Anyway, I would do what I could to take them up on it. That is significant money. And yeah, get a receipt and staple something about the cash proposal to it.

[G. Keenan]

My guess is the contractor wants to avoid paying a 3% - 4% credit card processing fee on what they are charging you. Unless this is a big company doing thousands of charges per month, they are not getting a 1% - 2% fee from their credit card processor. And if anyone out there knows a reputable payments processor who will give a small business 2%, hit up your boy with a recommendation.

P.S. can you pay him with Zelle? You can send up $6500 per transaction with Zelle, I believe, and there is a limit of like $16k you can send through Zelle in a 30 day period.

[ghostrunner]

My guess is the contractor wants to avoid paying a 3% - 4% credit card processing fee on what they are charging you. Unless this is a big company doing thousands of charges per month, they are not getting a 1% - 2% fee from their credit card processor. And if anyone out there knows a reputable payments processor who will give a small business 2%, hit up your boy with a recommendation.

P.S. can you pay him with Zelle? You can send up $6500 per transaction with Zelle, I believe, and there is a limit of like $16k you can send through Zelle in a 30 day period.

I had thought this might be it, but does that still work better for them? It's a 5% discount to me vs paying 4% max to the CC processor. Of course if it's also a tax dodge, then maybe that's enough to make it worthwhile.

I did ask if a check would qualify for the discount and they said no, so I figure a dodge must be part of it.

It's a seemingly reputable contractor otherwise. Certifications, BBB accredited, etc... And I think we're pretty small potatoes for them, as far as home renovations go.

[haltz]

PayPal's commercial fee is 3.49%, but this is cash vs check not cash vs card. In my experience, 95% of the time something like this is paid with a check. Venmo is common for smaller stuff.

[Joe Shlabotnik]

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[ghostrunner]

I just chatted my bank and it sounds like the only way to do it is multiple atm withdrawals. There's a lobby cash advance option, but the other bank might charge 4%, even though mine doesn't. They didn't seem to have an issue with it, and I can up my atm limit temporarily. Still it would take me 5 days of withdrawals.

We don't use a local bank, otherwise this would be easier.