Recently, there has been an upsurge of gas stations around the country advertising prices on their signs with a tiny little note typed in 8-point font attached to the actual fuel pump stating that the quoted prices on the signs are for cash only and an additional nine to ten cents more expensive for credit card purchases. Gas station owners have resorted to this measure to stay afloat as the inflated prices gouge into their store-level profits because people are reducing their gas consumption and also spending less in the convenience stores attached to some stations.
This has caused some confusion with drivers (especially at self-serve gas stations) who typically pay with credit or debit cards rather than walking inside to pay cash. Gas station owners are claiming that they are trying to recoup the approximate 3% fees they have to pay to the credit card companies for every credit card purchase of gasoline. This may make sense at first blush, but upon further investigation this party line doesn’t hold water.
I personally fell victim to this ploy the other day. There I am, driving along the highway when I spy an unusually low price of $4.09 for regular. I promptly cut off at least three people while crossing several lanes of traffic to make sure I didn’t miss this deal. I swiped my card, selected debit (because it always asks if you want credit or debit!!!) and entered my pin. When I went to select my fuel grade, the price on the pump was nine cents higher than the sign. I then saw the tiny little note scotch-taped to the pump explaining the credit card situation. Wait a minute…I didn’t pay with a credit card!! I paid via debit card, and gas station owners DO NOT incur this 3% fee on debit card purchases. Debit cards act as cash or check, and therefore the 3% fee does not apply.
This is how I was taken advantage of at the pump. Then it dawned on me that the credit card fees are not the only thing that gas station owners are concerned about in this situation. The margins have always been low on gasoline for station owners, but with people being more budget-conscious and strapped with heavy fuel prices, they are less likely to buy the Pepsi, Snickers bar, and whatever else from the convenience store. The convenience store items are where the station owners make the highest margins. By forcing you to walk into the store to pay cash for cheaper gas, they are increasing foot-traffic in the store in hopes to garner more convenience store sales.
Either way, if you see this type of situation, do not attempt to thwart the pricing scheme by using your debit card. It will not work – they charge you the credit card fee anyway. Walk into the store and pay with cash (your choice on the Snickers bar) or accept the higher per gallon cost. The price difference between cash and credit payment methods at the gas station will probably continue, so being aware of your options and the outcomes is important.
11 Comments
This is a shame, I guess paying cash for about 12 gallons of gasoline makes the purchase of a snickers bar essentially free.
$4.09? Sheesh, I feel lucky that I pay $3.97.
Wawa was $3.87 today.
In Jersey, we do not have to pay cash inside. However, I have seen signs that read $3.83 Cash, $3.93 Credit of equal font size. I believe it was the Shell station in the center of Browns Mills, NJ.
I just won’t buy gas if I have to use cash. Cash cost money to get out of the machine and slows everything down at the register.
The reason credit card companies charge a convenience fee to store owners is because they can. People want to use their cards and if they can’t, they won’t go to that store.
I doubt this practice will do anything more than further anger a customer base already annoyed by high prices.
Who isn’t annoyed at the high prices? I mean c’mon the price of gas is out of control. We don’t experience it as bad here in NJ, as do other parts of the country. If you can save an extra $.10 to the gallon by using cash instead of a card, then why not?
As was pointed out in the WaWa post, it doesn’t necessarily cost money to get money out of the ATM. At the gas station, my experience is that paying with cash is a lot quicker because you don’t have to wait for the one guy thats running four pumps to process your card. He fills you up, you give him cash, and your out. In states where you pump your own gas and HAVE to go inside to pay, I guess it really doesn’t matter how you pay because you still have to waste your time going in to the store.
It does matter, though, because I can swipe my card right at the pump without going inside at all. I am just saying I think it’s bogus that you still get charged the 3% higher price even if you use a debit card, which is the same as cash.
and we all know that cash is just as good as money.
Thanks Yogi
I just saw gas under $4 in PA yesterday for the first time in like three months. It was glorious.
I just saw Blue. He was glorious.
Jason,
I don’t know where you had done your due diligence about the credit/debit card fees, but its misleading. It is true that there is a processing fee for credit/debit cards but there is also a swipe fee ($0.20 per swipe in my situation). I am a gas station owner in Florida and I know for a fact that there are transaction fees + swipe fee for both credit and debit cards. However the debit card fees are a .02% (not 2.0%) cheaper than credit compared to VISA and MASTERCARD. American Express and Discover just are too expensive. So its normal for the stations to charge a different price for cash/credit/debit (although 10 cents more is a bit high).
Thank You.
-Bruce