You've found out something that many people don't know about - the " - X%" for a cash transaction. Many businesses do this, or a similar deal - ie. ' pay this bill in full within 10 days and reduce the amt. due by 2%' (2% net 10). It's not hard to imagine a slightly larger % for cash (cash doesn't have to clear the bank and can't bounce). This helps keep the company in question 'liquid', they have suppliers and payroll to meet and being sure that they have enough money to do so is key.

To save someone the need to respond: I'm sure some (many, most) that do this do it to avoid a portion of thier taxes (ie don't declair the income). This isn't such a bad thing (even to the Feds), the underground economy helps keep us prosperous - the Feds don't mind a small % of anyones' income not being reported (as when it's a cash transaction) as it keeps the economy chugging along (goods bought for taxable $s) - it's only when the cash folks hide a substantial amt of their income that they sick the auditors on them. (Note the change 10 - 15 yrs ago requiring waitrons to declair 10% of their table checks as tips, if the contractors, et al, are discovered 'as a group' to be consistantly and substantially under reporting their income - you can bet the IRS will find a way to eliminate cash transactions)

Hope I explained/ described this correctly - it's been a LONG time since I took Econ 101 -102 and accounting 101 - 102 ---