Updated: An inside view of Gas Stations Charging Credit Users More Than Cash Users.
I noticed something disturbing last night. I pulled into my favorite gas station last night, which happens to be Valero. It’s my favorite simply because it’s the least expensive in the area and it’s right on my route home from work. Apparently they have begun charging 6 to 8 cents more per gallon for payments with credit card than they are charging for payments with cash. This is a very new development, as the last time I filled up a few days ago, this was definitely not the case.
I didn’t look at the pump until I gave the attendant my credit card and he began pumping. (New Jersey is still a full-service-only state.) There was nothing on the large sign that indicated that there was now a price difference between credit and cash.
The price difference practically wipes out the cash back bonus I’d receive by using my credit card, so it will now be more difficult to determine which method of payment will actually cost less in the long run and which gas station to use, as prices vary daily.
I thought it was against the terms of service of a merchant account — and possibly against the law — to charge different prices for cash and credit or to add a surcharge for credit card purchases, all else being equal. Here’s how the stations apparently get around this issue:
Now we all face dual pricing, and as was the case when the practice first popped up, to comply with the law, the pump price has to be the credit price from which the cash discount comes.
But the price advertised on the big signs that draw people to the stations is the cash price. That is misleading.
According to North Jersey Media Group, gas stations are “forced” to adopt this policy because merchant fees eat into their profits. I understand that individual stations are put in a squeeze when prices are increasing. Understandably they want to pass that cost onto the consumer without pricing themselves out of competition.
As I’ve been following prices practically day to day, it’s clear that when this was initiated at the stations within the last few days, the cash price is the one that followed the trending line and an extra surcharge was added to the credit card prices. Nevertheless, they can still consider it a “discount” for cash purchases. The regular credit card price should be the one advertised on the large signs, not the discounted price.
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Check out this situation:
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.
Low pay, no benefits, bad working conditions, safety violations..If you don’t mind these things then come work at WaWa…It’s time to unionize the Gas Associates..Employees need to organize so that WaWa will be required to follow the Law..Help us Organize at WaWa..Have the Teamsters or other unions contact us..thank you
This is a deceptive practice at best, and one I ran into for the first time today. The price posted on the board was evidently the cash price, but noted only in very small print. I did not notice the price at the pump was 5 cents higher than was posted on the board until after I had filled up. Only then did I see the additional small wording on the pump that said a 5 cent discount applied to cash transactions only.
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!
I just turned in a gas station just south of New Braunfels, Texas for advertising two different prices. Here is where you complain to MasterCard:
http://www.mastercard.com/us/personal/en/contactus/merchantviolations.html
(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?
I just got off the phone with Discover Card 1-888-DISCOVER (1-888-347-2683) and apparently they don’t care if there is a difference in cash vs. credit card prices. At least according to the lady I talked to.
Nobody is charging more for credit cards, rather it is a discount for cash. Nothing the credit card companies can do about it. Not even something Obama could do about it. I started this 10 years ago, fought off the credit card companies and the state department of weights and measures and consumer afairs, and I won at every stop. If the credit card companies were fair to the retailers, we wouldnt even have this blog going.
In my observations, it’s the cash price that is the price competitive with the other stations that do not discriminate. You can call it a “cash discount” if you want, if that keeps Visa and Mastercard from revoking your merchant agreement, but you’re not offering a break to those who pay cash, you’re charging a premium to those who use credit cards to make up for the high merchant fees. I do feel bad that Visa and Mastercard have backed merchants into a corner… but that’s not the customers’ problem. Group together and fight the merchants for a fee system you believe is more fair, lobby the government for more oversight, or find a different business with a better profit margin.
In my case, my cash price is cheaper than anybody elses credit price, so i cannot speak for others. Visa and Mastercard haven’t backed me in a corner, I have backed them in a corner. I am keeping them from getting away with robbing from merchants like myself, by encouraging there customers to put away the cards and pay cash. It IS the customers problem. Consumers are constantly looking to everybody else for solutions, but themselves. With your philosophy, how is General Motots, Chrysler, Bank of America, Citigroup, AIG and others my problem? The answer is that it isn’t, but their problems have become our problems–so why shouldn’t the high credit card fees I pay not become everybody else’s problem? The last thing that I want is for the Government to get involved in my business. Can you imagine Nancy Pelosi and Barach Obama regulating gas stations and merchant fees??? By charging more for credit cards (which I don’t deny doing), I, along with many others, are solving a problem for ourselves, without asking the Government for help. How can we ask for a more fair system from the credit card companies if they have a monopoly? They are the ones in control, and the ones who can make a system more fair. As far as profit margin, mine is healthy. I am a millionaire, and I want to make and keep as much money as possible, which is why I live in a capitalist country and society.
Since you’re probably not a natural born citizen, you don’t mind the government getting involved to provide you with tax breaks.
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.
Actually I am a natural born citizen (4th generation by the way). I don’t want tax breaks from the government-I want capitalism to flourish. I want welfare done away with as well as all of the other government social waste (and I dont want to hear about the 3% of people that get welfare who actually deserve it). And FYI, I’ve never seen any person at a speedway without a turban on. The beauty of being in a free democratic country is that you can go anywhere you want for gas. By the way, I am the highest volume gas station in the area, and the main reason is that I have a large sign that says “AMERICAN OWNED AND OPERATED”. If Americans stopped using credit cards, it would dump TRILLIONS of dollars each year back into our economy. If you look at China, you will see that people there seldom use credit cards, which is why individuals are not in nearly as much trouble in this recession as Americans are.
Yeah this is now happening in Michigan also, I’ve noticed it at Bp and Mobil. Now here is the kicker, Mobil was charging 10cents more per gallon if you used a credit card, Bp was charging 20CENTS A GALLON MORE if you used a credit card. Now how the $*&# is that legit, I’m sorry its not. Bp go to hell! Something needs to be done about this. Oh and a comment on the signs they put reg cash, reg credit, then premium listed out so it looks like reg-mid-premium, VERY unclear. Just one more way they make the consumer bend over, how will they change the economy if they just charge us more for everything, don’t they realize that in doing that we CAN’T buy stuff? Stop bailing out corporations and bail out the consumers, DUH….. am I the only person who sees this? lol? For example: The Big 3. I NEED a car but cant afford one, ironic?
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