Some Gas Stations Banning Use of Credit Cards at the Pump

[marmar]

from AP, via Yahoo!:



Credit card fees: Some gas stations say 'no more'
By TOM BREEN, Associated Press Writer
Wed Jun 18, 1:28 PM ET



CHARLESTON, W.Va. - When gas station manager Roger Randolph realized it was costing him money each time someone filled up with $4-a-gallon gas, he hung a sign on his pumps: "No more credit cards."

He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.

"The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."

His complaints target the so-called interchange fee — a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed — usually at just under 2 percent — but the dollar amount of the fee rises with the price of the goods or services.

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.

In a good month, Randolph's small operation would yield a $60 profit on gasoline sales. But that's been buried as soaring prices forced the station to pay about $500 a month in interchange fees.

"At these prices, people aren't making any money," said Jeff Lenard, spokesman for the Alexandria, Va.-based National Association of Convenience Stores. "It's brutal." .....(more)

The complete piece is at: http://news.yahoo.com/s/ap/20080618/ap_on_bi_ge/gas_prices_credit_cards

[customerserviceguy]

1. In New Jersey

there are stations that have a prominent price posted, but those are cash-only prices. Get to the pump, and the smaller print on the signs charge a dime more per gallon. Since they do the same thing on debit cards, I try like crazy to avoid those places.

[babylonsister]

2. How many people carry cash vs. a debit/credit card for gas?

I guess I'll have to consider that eventuality again. I used to write checks; guess they won't work either. x(

[A HERETIC I AM]

18. If I am not mistaken, the merchant is not charged a fee on Debit Card usage....

only on Credit Cards.

As I understand it, if there is a fee to be paid on Debit Cards, it is paid by the cardholder.

[soothsayer]

28. or the originating bank. They pay a fee.

[alarimer]

3. It's not enough that they are gouging us, they want to make it harder to pay.

I will find a station that WILL take my credit card and to hell with the others.

[elocs]

12. We really need to find out exactly who this "they" are because

"they" are responsible for a lot of things.

Anybody who believes gas stations are making a killing on the high prices is mistaken. In western Wisconsin we have Kwik Trips (our version of 7-11s) and they are not making their profit on selling gas, but on selling all of the other goodies people purchase when they are there to buy gas. If some independent station is desperate enough to make gas purchases a cash transaction, then it must be tough to make a living just selling gas. These people are not the "they" who are gouging us.

[pt22]

4. Something very bogus about that story. The fees are a percentage of gross sales

and have nothing whatsoever to do with the price -per gallon-.
:eyes:

[marmar]

5. Not really. I've noticed separate credit and cash charges for gas at quite a few stations of late...

n/t

[pt22]

7. Sure, merchants have offered cash discounts ever since credit cards were invented.

They make a little more profit if somebody pays with cash but the percentage is the same no matter how much the gas is. 1.8% of 5 gallons at a dollar a gallon is the same as 1.8% of one gallon at 5 bucks. :shrug:

[Sinistrous]

17. Yeah, but the dealer has only 1/5 th as much profit to cover the cost

of the credit card transaction.

[pt22]

21. Deleted

I didn't know they based their profit markup on each gallon. What kind of idiot would do that?

[Theres-a]

9. CT, too

There was a big story on our local news about a guy getting in trouble for charging less per gallon for cash. I believe he won,and other stations are doing it now,too.

Also, i noticed a local family owned Citgo selling alot of extra things,plants and such. I'm guessing they aren't making much profit on gas,and they're trying to pick up the slack.

[bigwillq]

10. I've gone to a few

of the stations in CT that had lower prices if you paid cash.

[Thor_MN]

6. I think they are saying that their markup is pegged to gallons

while the interchange fess are pegged to dollars. As the dollars per gallon goes up, their markup falls behind. My guess, for what it's worth ($0.02 is about half a ounce of gas)

[pt22]

8. They may be saying that but it doesn't work that way. Unless they were dumb enough

to contract it which I seriously doubt; never heard of such a thing. Would a merchant agree to pay a percentage of the price of a gallon of milk no matter how much it cost? :eyes:

[Sinistrous]

15. Yes it does work that way.

The credit card companies are concerned with the dollars involved in each sale. They don't give a damn how that total number of dollars was determined.

[pt22]

20. Which is precisely what I said.

...

[Sinistrous]

32. Partial Apology. 'Partial' because that is also what Thor_Mn said, and

you seemed to disagree with him.

[Sinistrous]

14. And just what do you think drives the total amount of gross sales?

The stations' markup is on each gallon, and is usually a fixed amount per gallon. If the number of gallons stays the same, the amount of the dealers dealer's profit stays constant. But, if the gross dollar amount of the sale is inflated by a higher price per gallon, the cost of the credit card transaction increases, thus reducing the dealer's profit.

Nothing "bogus" here.

[MiniMe]

19. It does indirectly

If Gas is $2 a gallon, they pay 4 cents per gallon of gas at a 2% interchange fee. Assuming that they are marking the gas up at 12 cents per gallon, that means that they would get an 8 cent per gallon profit on credit card sales.

If Gas is $4 a gallon, they pay 8 cents per gallon of gas at a 2% interchange fee. If they are marking the gas up the same 12 cents per gallon, that means that they would get an 4 cent per gallon profit on credit card sales. In other words, if they mark the gas up the same amount no matter how much gas costs, they are getting less per gallon as a profit.

The gas station owner is caught between marking up the gas as a percentage of sales which may price them out of the market, and making half the profit on credit card sales. The gas station owners have a right to make a reasonable profit on the sales, they can't control what the oil companies charge them for the gas. They are being gouged too.

I always thought that you couldn't charge more for using a credit card, but you could give a discount for paying cash. Its all semantics, but I think that they would be better off doing it that way, just my opinion. Accept the credit cards but give a discount for cash.

[bigwillq]

11. I always pay cash for gas.

I think it's cool that they are doing this; lower prices if you pay cash.

[pokerfan]

13. I've paid cash for years

since I learned how dangerous it is to pay-at-the-pump. They suck all the info off of your card, negating the need for your PIN. That information is left on servers where it is incredibly vulnerable to theft. Plus they overcharge as a matter of practice (because the pump doesn't know how much gas you are going to remove) and it takes days before your account is credited.

Pay-at-the-pump is evil.

[pimpbot]

24. huh?

Not sure what gas stations you're visiting but every pump I use my credit card in bills exactly the same amount to the card. I have one credit card that I solely use for gas, because of the rebates. If I ever saw a non gas purchase on there, I'd know something is fishy. Yea, I guess the evil gas man can track what stations I fill up at, but all he'd see is that I fill up at the cheapest one around :)

[pokerfan]

26. It's standard practice

The fact that it's usually reconciled by the time that you get your bill doesn't make it right.

http://articles.moneycentral.msn.com/Banking/BetterBanking/HosedAtTheGasPumpByYourDebitCard.aspx

http://www.volunteertv.com/home/headlines/19514254.html

http://www.creditcards.com/credit-card-news/buyers-fume-at-gas-credit-cards-1267.php

http://www.schneier.com/blog/archives/2007/06/credit_card_gas.html

[malaise]

16. It's been like that for over two years here in Jamaica

at many gas stations. Some don't even take debit cards - strictly cash or cheques for regular customers.

[Ilsa]

22. We didn't like standing in line waiting behind lottery ticket buyers. That is

the main reason we switched to using credit cards to gas up. It all goes so much faster if we can use a card.

[Codeine]

27. You can still use debit.

This is just for credit.

[Fox Mulder]

23. If I see a gas station that doesn't allow credit cards...

I'll drive to another gas station. I don't feel like waiting in line for ten minutes while some asshole decides to do his/her scratchoffs right away.

[Initech]

25. Sorry but I dont want to carry $80 every time I need to fill up.

[Ilsa]

31. No-effing-kidding! I remember we all chipped in 50 cents to buy enough

gas to haul us around town when I was in high school.

It's sad that the culture of high school kids socializing by driving around will meet its demise.

[soothsayer]

29. It used to be that way in virginia. back in the gas crisis I guess.

[dysfunctional press]

30. if enough stations do this, the card companies could decide to renegotiate the interchange fee...

and how it's applied at gas stations.

[ProfessorGAC]

34. I Read Somewhere. . .

. . .(might be in the Credit Union magazine), that this discussion is already talking place. They make HUGE money on interchange fees and something is better than nothing.
The Professor

[poppysgal]

33. need a trailer to haul the cash

to pay for the gas. Then again, that would take more gas, what to do? Oh yeah, walk.:scared: