The difference is, merchants are generally required to sign agreements with merchant account providers that forbid charging fees for any payment method.

But giving a discount for a payment method is OK.

The idea is, rather than that TV costing $799 with 3% more for credit card, they'd like it to be be $799 with a potential discount. It's all about the benchmarking of the initial price. So the retailer could price the TV at $823.71, with a 3% cash discount.

And most retailers don't want to be anywhere near the word "discount" unless there's a sale - otherwise it just begs the question: "What other discounts are available?"