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I will be putting this to a test personally with a cash only July, to see if I really will save 12-18%.
What I don't like about it is that I love pay at the pump - no lines, no hassles. :(
I guess that is another way to drive customers into the stores and get them to buy more snacks, cigarettes, etc.
Fascinating. I thought advertising like this was illegal because it was deceptive. I am also surprised that gas stations are still allowed to charge two prices. My parents don't and I highly doubt they will. (Prices are back below $3 in PA, DE, MD, and VA anyway.)
I received a server error so I am resubmitting this comment.
I think as long as they advertise the higher price and charge a lower price for a cash transaction they are in the clear. Seems reasonable to me.
I've been known to skip stations that advertise their price on the main sign being a discounted price if you purchase a car wash. When I pull into a station, I would expect to pay the price that was displayed on the main sign.
I'll have to keep my eyes open here at our gas stations to see if there is any difference in the sign/pump prices.
J: It's not a price advantage for cash -- cash prices are in line with the station's historical trend -- it's the credit card prices that jumped. I guess it's just semantics, but it's important to note that there is *not* suddenly a "new discount" at these pumps.
But this might not hold true for gas stations that don't necessarily have long lines anyway.
I don't mind gas stations doing this, but it should be made clear to the customer rather than using deceptive advertising. In defense of the gas station they did have the credit price on the main board as well, but the cash/credit part was tiny and in odd placement and I just assumed the prices were the usual regular/plus/premium prices.
LOL -- one place anyway -- it's called "New Jersey"
I haven't passed my regular station yet -- and I probably won't again as I am moving.
Might that be overreacting to the sign placement?
I consult for the Merchants Payments Coalition on the issue, and they've got a lot more information about this up at their website, UnfairCreditCardFees.com.
Long story short: Merchants aren't the bad guys here. They're just trying to keep their heads above water, and while they watch profit margins narrow, the banks' profit margins thanks to the interchange fee keep going up and up.
http://usa.visa.com/download/merchants/rules_fo...
Surcharge rules are on page 15.
I believe that what this particular station is doing violates these rules, as it is stated that the cash discount offer must be clearly disclosed.
Also: If credit card interchange fees are eating up so much of the merchant's profit, switch to debit only! It's a flat fee instead of the fee-plus-percentage of a credit card.
This means 90%+ of Americans couldn't use this option ;-)
If this type of advertising was truly allowed, gas stations could offer gas at $1 a gallon with a $30 car wash, and list the price on the sign as $1.00 for regular unleaded.
I like 1 penny per gallon with a $3 per gallon pump rental. If the total was competitive, I would buy that guy's gas for his creativity.
NJ Officials certainly did not to a good job informing consumers that this was coming.
Finally, with cash, there is almost never a receipt. It is easier to hide cash sales and cheat the Government.
Never again will I go to Valero....
I am so glad you raised this issue. I have had this happened at a Valero gas station. They do not display the price for using a credit card and you find out only if you look at figures when the guy is pumping which is how I caught this.
So how do I beat this, well simple, avoid Valero!
Once people stop coming they will stop deceiving the customer.
And for all of you who aren't from New Jersey, we DO have one of the lowest gas price averages in the US. On average, we're $0.10 cheaper than PA alone.
Remember though, it costs now about 9 cents a gallon to process your credit card, by which point the station makes maybe a nickel GROSS per gallon sold.
The minority of sales and majority of profits are from non-gas sales.
Personally, I now usually fill up at one of the Arco's (BP). Cash or debit only, 45 cent charge for debit.
I drove past the original gas station this past weekend and noticed their large sign was changed to include the cash price for regular unleaded in the top position and the credit price for regular unleaded in the second position where the "plus" price used to be. It's hard to see that one price is cash and the other is credit until you pull into the station. Also, I still maintain that charging more for a credit card transaction is a violation of the credit cards' terms of service, even if you call it a "cash discount." On the signs, it is the top price that is compared when choosing a station. You don't know that you're comparing apples and oranges until you pull into the station.
Regulators confirmed that this practice is okay -- so as consumers, it's something we'll have to look out for.
Full serve (best called mini-serve) is consumer-friendly, fast, safe, secure, compfortable convenience mandated and VERY popular ... certainly not "crazy" when you consider New Jersey consistently ranks among the states with the LOWEST average price for regular gasoline, and is often the second or third lowest. That "attendant-only pumps the gas" law promotes greater competition. The law is good for the local and state economies (payroll taxes, employment, etc.), and gas statin attendants do nopt belong to a union. This is a law with overwhelming bi-partisan support in the state. Get your facts straight.
Can you mention any commercial that is not deceptive. The credit card companies T&Cs (terms of services) that you defend so much have the most deceptive ads possible by mentioning low transfer fees, low introductory APRs, then in very little character fonts all the penalties and fees for the following years. Were these clearly visible at first ? No.
I guess you do not yet a merchant business, otherwise you would even "love" more these credit card companies. Most of you here want to boycott gas station merchants but none want to boycott legal racketers and rippers off namely credit card companies. Of course you cannot understand that point of view as long as you are just comsumers and not retailers.
I've simply stopped going to Valero because of this. They've changed their signs since then, but I want to pay by credit card to earn rewards and to keep my wallet free of dollar bills, and whether or not they're advertising deceptively still -- most of the stations I've seen have changed their signs to show "cash" and "credit," though it still looks as if the two prices are "regular" and "plus" -- there's no reason for me to pay more than I can at other stations.
In other words, the price is the assumed "regular" price for everyone, therefore it should be the advertised price. If there is a discount on that price, the regular price should still be advertised for everyone, though you could also advertise a cash discount along with it.
Advertising only a "discount" price IS deceitful, and is not in accordance with Truth in Advertising laws. Unfortunately, too many consumers are ignorant to this fact, so it goes unreported more often than not.
http://www.mastercard.com/us/personal/en/contac...
One of their complaint categories is: "The merchant/retailer is adding a charge for using your MasterCard card."
I was just at a gas station in State College PA (the Shell at 1282 N Atherton) which advertised 3.15 on the big roadside sign, but charged 3.23 at the pump for credit, with a sign saying "8 cent discount inside for cash or shell card payments"
BTW...It's illegal and it's called "Full Disclosure":
June 7, 2007
Contact: Senate Republican Office / 609-292-5199
Senator Diane Allen (R-7) Allen Legislation to Protect Consumers Against Inflated Gas PricesSenator Diane Allen (R-7) introduced legislation today to protect consumers from price gouging and false advertising by gas stations. The two bills would establish new penalties for violating the law.
The first bill provides that if a gas station charges two different prices for cash or credit card they must advertise both prices on their signs. The second bill would clarify the existing law that does not allow gas stations to change their prices more than once in a 24 hour period. This legislation will allow a gas station to lower their gasoline prices at any time in a 24 hour period without penalty.
“Some of my constituents have complained that they’ve seen one price advertised on a sign, and when they paid with a credit card and got their receipt they discovered they paid a lot more for using a credit card,” said Allen. “This practice violates customer trust and should be against the law in New Jersey.”
A gas station that violates the price clarification would be liable for a penalty of $5,000 for each violation, and could also face other penalties.
“We to want make sure that when customers go to fill up their cars and trucks that gasoline stations are providing full disclosure,” added Allen. “Furthermore, if gas station owners feel they can lower their price and be more competitive, why should we stop them? It just makes sense to encourage lower gas prices.”
Personally I think this is a despicable practice!!!!
Let's put another spin on this...the amount that gas stations pay for their gas is based on market posted prices. They all basically pay the same and must then set a price to compete for your business. Margins are slim and competition is tough. Eating into the amount that customers like you and I pay for gas includes credit card fees. Offering discounts for those paying with cash helps these merchants stay in business.
Visa/MC/Amex/Discover, etc all make money two-fold on these deals: the fees charged to the merchants and the fees that you pay when you run a balance month to month. Chew on that for awhile. It's a win-win for them.
It does seem to be a "discount" for the moment as these stations are cheaper for "cash" than the local one-price Wawa and Sunoco, but the credit price is about 2 cents higher than the local average.
My son just got a Wawa credit card. He gets 10% rebate on gaspurchases for the first 90 days and 4% after that. It is given to you in the form of a wawa gift card. Great deal and he is just 18. (tiny credit limit). I go there a lot for gas and might consider it.
They can't tack on a surcharge to the final price because you are using a credit card (that part is law). But they can give a discount off the final price if you use cash, They can swing it as a coupon, the same way you have coupons like Lowes 10 of 25 which is only valid if you use a VISA card. As a business owner I am glad that this is starting to happen. As for America Express our business outright refuse to accept it. Our profit isn't that big, the CC don't pay rent, don't contribute to my local community like I do, don't have the expense of consumables like I do so why give them my profit?
I guess these days are coming back all over the east coast. The question is, is this a national trend?
Perhaps Valero and the Citgo have different merchant agreements which allow the price discrimination between payment types?
Even when buying with cash I usually go out of my way to find companies that have the same price for cash or credit. It only seems fair. (Wawa happens to be my favorite)
As I was leaving, Valero had a sign advertising a Valero credit card that will save you .10/gal.
LOL - The jacked up price is .14/gal. higher for credit!
I rarely carry cash any more, I've always thought electronic transactions were the preferred method of payment these days. 1 step forward, 2 steps back.
Gas stations do not offer a discounts for cash, they charge a higher price for credit cards. In some states this practice is against the law.
But dont expect any of these useless lawmakers/enforcers to do anything about it , unless it actually affects them.
Discount my foot! It's a way to pass along the costs...or a way to maintain current profit levels...or a way to ripoff consumers. And yes, everyone but an employee can 'pass along the high cost of gasoline. grrrrrrrrrr.
Wait!
Maybe I can tell my employer that I have to increase my salary to cover the higher cost of gasoline which has increased my transportation costs! (Sheeeee-eeeeet.)
I do own a small automotive service business and we have been reeling from the increases in credit card processing fees in the past couple of years. We spend on average, between $500-$900 every month, in credit card fees.
Now, from our perspective, the 45% of our customers who pay with cash or check, or even low cost debit cards, are going to have to pay higher prices, just as those paying with credit cards will, because we need to raise our labor rates to cover the ever increasing costs of doing business, specifically the costs associated with increases in credit card usage. Is that fair?
If I were a customer who pays my bills with cash or check, should I have to pay more because other customers use a payment form that actually costs the business a significant amount of overhead? (Keep in mind that it takes many repair bills to cover that expense every month. Considering that every sale must also cover other costs too: cost of parts, labor, taxes, building mortgage & property maintenance, tools, training, large equipment (like hoists), etc., and finally, a small fraction for owner profit.)
I only came across this article/discussion as I was looking for information on the legalities of offering a discount to customers who pay with cash (that means actual cash or check), or a little less of discount if you pay with debit card.
It's unfortunate that when ever we feel wronged on an issue, we rarely get to the see the flip side of the argument.
What's really going on with the retail gas price situation is that people are paying with credit cards, buying less in the convenience store (where the only real profits are), and the only ones getting rich are the fuel companies providing the gasoline (certainly not the retail sellers - check it out) and the credit card companies.
PLEASE stop bashing your local merchants, they are only trying to make a living - just like you. Look around at how many businesses cannot survive in the current business climate we have. Our only options are soon going to be large retailers and service companies, where you might have to park a mile from the door, stand in the snow and slush to fill your tank and wipe your windows, eat out of styrofoam containers, etc.
Really. They are the only ones who will be left - once you take the profit out of the small local businesses, and give it to the conglomerates who can save pennies but cuting your wages and insurance.
Take a real hard look at the credit card industry. The are making great profits, and even though people are filing bankruptcy at an alarming rate (we just had an employee go through it), the credit card companies keep giving cards to young adults without financial sense or experience, especially to struggling college students, and to mature adults that are already too far in debt to be able to pay them off each month. Not to mention the rates Visa, MC, Discover, etc. are charging to retailers to cover the extra costs associated with all the perks and programs promoted to those end card users. Often times the card users never really even benefit from those programs, but the credit card companies sure do!
Our economy is faltering, credit card companies lobby for laws that only protect them and their profits, AND the government will bail them out when they get into trouble. (Like the insurance companies that got bailed out after Katrina - even though they had lots of real estate they could have sold, and were making great profits!) (Golf anyone?)
Oil companies are posting record profits too! (Profits are from pumping & refining gas to sell, and from gas credit card fees.) Yet, our government still subsidizes this industry. Why?
Who is going to bailout the little guy, your corner market, local barber, or your auto repair shop when the expenses to their bottom line put them out of business because they can no longer compete with the big retail bullies (like Wal-Mart)? Just look at what happened to many of the little family farms - gone.
their own gas tank without mayhem ensuing. Living in Texas and
California for years, I can't even *remember* the last time I
saw a full service station. How can you be trusted to vote
intelligently if you can't even fill up a gas tank?
You don't know how bad it is. In NJ we actually got it on the ballot (after *lots* of hard work) ...but the blue state sheeple are so used to having the government (and now apparently the gas station attendents) take care of them from cradle to grave that they voted it down! I often heard "I wouldn't know how to operate the pump" as an excuse. ...especially from the women. Like government programs, once they were used to having someone else do the work, the cost no longer mattered to them... never mind that they would still have the full service lanes available to them. They screwed the rest of us good and locked us into this unnecessary/unwanted service forever. NJ is a state where the people truly do have the government that they deserve. It's so frusterating to me to pull into a station & have to wait for some slow @$$ed lame third world illegal attendent when I could be in, filled, and gone before they can get the cap loose. What a bunch of LIB losers we have in this state... and you know what? The're going to ensure higher taxes by electing Obama(nation) in Nov. Meanwhile they'll all lament the mass migration of businesses out of here & mass migration of illegal parasites into the state. Their problem is that they compare everything to Utopia instead of Reality. 11 Million people and apparently at least 5.6 Million don't have the brains to:
1) Insert Nozzle in tank
2) Select Grade and payment method
3) Begin Pumping
4) Replace Nozzle
5) Vote Republican or lose the above options
I never carry cash. Everything is about convenience.
How you like them apples???
I leave a softball game and I'm thirsty and low on gas. I stop at a gas station, I pay at the pump with my credit card, no qualms. I go into the station to buy a drink with my credit card and they say I can't pay for that with a credit card. I left the drink on the counter and walked out as the attendant asked me to put the drink back if I'm not going to buy it :)
So I can spend 30 bucks on gas, but then they don't allow me to buy a drink, poor customer service. Here's my question:
Does it hurt the gas station if I swipe my credit card and pump in $.50 worth or less of gas and then end the transaction. May even do that over a few times over???? If so, this may be a good way to fight back ;) Especially a good way to get back gas stations that charge extra for credit purchases.
I plan to pump exactly 1 gallon of gas from this station a few times a week from now on. Let's see how they like a taste of their own medicine. I can't wait to see if they try to slap minimum charge requirements on to discourage me. I'll take great pleasure in turning them over to Visa/MC at that point.
Be honest and upfront with your pricing merchants! If you are advertising a cash price for your product, make sure the customer can read it before they purchase!
http://www.mastercard.com/us/personal/en/contac...
(Thank you Matt!) Sadly, they want the full name and address of the offending (and offensive) retailer, so make notes. Check mark the "The merchant/retailer is adding a charge for using your MasterCard card."
OK, guys and gals, where do I complain to Visa Card and Discover Card?
Don't worry, you and others charging extra to use credit is not a problem for me as long as I can go to a Speedway, Meijer or other non-credit charging station.