Would a 1 percent cash or debit discount be an enormous burden? Some merchants already programmed their terminals to prod debit customers into entering their PIN rather than charging it as credit, so would offering a discount really be that much harder?
One answer is: It's just annoying. I normally use a credit card. Yes, I can use my debit card and enter a PIN. If it's a discount specifically for cash, I may not have any on me and don't want the change anyway. In any case, it's adding mental overhead to just paying.
(It's usually more like 3% delta which I almost get in cashback anyway but still annoying.)
