Washington Federal Savings and Loan Association is introducing a cash rebate program, the first system of its kind in the Washington metropolitan area.

The customer service, called Save-System, lets depositors place money in their savings accounts by paying with cash at participating stores and restaurants. A card issued to Washington Federal depositors entitles the cash consumer to a discount averaging 7 percent. The merchant pays the rebate , which automatically is credited monthly to the depositor's savings account.

Persons paying with personal checks, money orders and traveler's checks also qualify for the same rebate at the merchant's discretion.

The idea for the system was started in 1977 by attorney John M. Wilson in his hometown of Sikeston, Mo. Following the program's success in the St. Louis area, SaveSystem was marketed across the country through regional franchises from Wilson's corporation, American Business Enterprises.

Last May, Washington Federal purchased a franchise of SaveSystem for $250,000 from American Business Enterprises.The S&L's president, James L. Harris, estimates Washington Federal also has spent another $250,000 hiring salesmen to line up prospective merchants to honor SaveSystem SaveSystem.

As of Sept. 15, more than 2,000 stores honored SaveSystem cards. Harris plans to issue a pocket-size directory of participating merchants quarterly.

"Based on a 7 percent rebate and cash purchases of $8,000 annually by an average consumer, a SaveSystem card could mean a saving of $560 a year to a Washington Federal SaveSystem cardholder," Harris said.