Debit cards won't get you the "cash only" prices at the gas pump

[Bozita]

http://www.freep.com/apps/pbcs.dll/article?AID=/20080719/COL07/807190365

Debit cards don't equal deals at the pump

BY SUSAN TOMPOR • FREE PRESS COLUMNIST • JULY 19, 2008

Pumping gas awhile back, one man standing next to me asked: "Do you get the cash price if you use a debit card?"

At first, I thought he sounded a little silly. Cash is cash. And a debit card, well, it is plastic.

But if you think about it, a debit card is simply electronic access to the money in your checking account. So, why not?

Pulling up to the pump is painful in so many ways these days. We're paying more than $4 a gallon, spending $60 or more to fill up a tank and on top of that, we're stuck studying signs at the corner station as seriously as fine print to figure out how much we pay for gas if we use credit cards, debit cards or cash. The best price could be the cash-discount price.

Most gas retailers, though, aren't giving the cash discount if you use a debit card. I even tried a mini-test earlier this month and pulled out my debit card at the BP Lathrup Village at 12 Mile and Southfield roads.

I was charged $4.219 a gallon with the debit card. I would have paid the same price if I used a credit card.

Bring the Benjamins and you'd get that super-low price -- OK, low by today's standards -- of $4.099 for regular gas at the same station.

more...

[Rabrrrrrr]

1. Because the stores still have to pay for the transaction, even if it's debit

The reason they give the discount for cash is because they don't have to pay the 3% or so transaction fee that plastic requires.

[FarCenter]

2. Debit transaction fees vary

If the transaction stays in the ATM networks, like Plus or Star, it is a relatively cheap, fixed transaction fee. If it goes through Visa or Mastercard, then the fees are higher and probably percentage based.

Since the store doesn't know how much it is going to be dinged, they treat all plastic alike.

[mrreowwr_kittty]

3. I you let the credit card companies know they're doing it, they come down on those stations

Credit cards don't like it when merchants charge lower prices for cash and will often threaten to pull their charging agreement with the store. Which would put a big dent in the business, if it became cash only.

[Warpy]

4. Be old fashioned, pay cash at the pump

Gas stations are barely hanging on right now. Their sales are down because people are starting to conserve. Since they make a fixed profit per gallon no matter what the price does, they can no longer afford to take the ding the credit/debit card companies charge them for our convenience.

Gas stations are only the first. I think we can expect a lot of places to start charging a percentage on plastic purchases.

[dbonds]

5. The idea is to get you in the store so you might buy something else.

Any pay at the pump option will not get the discount.

[itsrobert]

6. I use a credit card that give me 3 Percent back

With gas being over $4.00 a gallon, that give me over 12 cents back a gallon. I pay my credit card off every month. Some credit cards will give you 5 percent back. So in the debit/cash scenario above, my gas purchase with cc would be below $4.099 a gallon cash price.

[FarCenter]

8. Due to the high fees they charge, the issuers can give cash back to their better customers

The other reason they can give back to better customers, is that some customers run a balance on their card and pay up to around 30% interest.

Note that one of the reasons they charge high interest is that about 5% of balances are written off annually by the banks as uncollectable. So the customers that are paying interest on a revolving balance are subsidizing the deadbeats.

[elocs]

7. Gas stations are not making a big profit because the price of gas is so high.

They are still making the same amount per gallon when gas was half the price and credit card fees only cut in further to their profits. They make more profit selling the goodies or services.

My supermarket does not accept credit cards, but it does accept debit cards and you must punch in your PIN. Why is this important? Because my debit card is also a MasterCard and if I do not punch in my PIN, or choose to use the card that way (specifically as a "debit"), then the transaction is processed as a credit purchase and the merchant is assessed the fee even though either way the money is coming out of my checking account.

Paying at the pump is convenient, but if you swipe your debit card and do not use your PIN you are making a credit transaction and the gas station will be charged a fee for it. If you use a debit card at the pump and use your PIN, it should be treated as a cash purchase because the merchant is not being charged a fee (which is why my supermarket allows debit cards, but not credit cards).

[FarCenter]

11. PIN debit transactions are charged a fee

It's just that it is small and not a percentage of the transaction.

They welcome PIN debit transactions because they are less risky than taking checks and the costs of handling and depositing cash are comparable to PIN debit transactions fees.

The besides the in-store costs of handling checks and cash the banks charge deposit fees.

[suston96]

9. Yeah, carry lots of Benjamins around with you....very smart......nt

[FarCenter]

12. With inflation, they need to print more

The $20 just isn't worth much anymore.

I think that they should also kill the nickle and the penney. Everything should be priced in dimes. A dime is worth what a penney was in the '60s. Round the quarter up to a 30 cent piece and be done with it.

Remember when gas was 29.9 cents a gallon.

[aikoaiko]

10. I used to care about the 3 cents, until I realized it saved me only 10 bucks per year

[TheFarseer]

13. Because they want you to go in and

buy a candy bar and a coke, right?