| Buckwheat |
87 Octane
Pay with a credit card: $4:46
Pay with cash: $4:34
This price is in New York
:3: |
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| N_Jay |
Why?
It cost the station 1% to 3% to run the card.
The station needs to maintain the credit equipment and I believe pay network connection fees.
The station runs some (minimal) risk of charges being refuted.
The station does not have access to the money for up to 30 days.
All these are costs. |
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| mikey159 |
quote:
Originally posted by N_Jay
Why?
It cost the station 1% to 3% to run the card.
The station needs to maintain the credit equipment and I believe pay network connection fees.
The station runs some (minimal) risk of charges being refuted.
The station does not have access to the money for up to 30 days.
All these are costs.
All these are true, but they are not newly true. The stations are just trying to find new ways to make money from those of us shopping price. They realize that at todays prices fewer people are buying gas, even though we are paying more, they are selling fewer gallons. Since they still have their costs, rent, electricity, gas, etc, they too are feeling the pinch of higher prices and are getting creative about making more money. Are they giving we consumers the full discount for using cash instead of credit, propbably not! |
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| jcantanixon |
quote:
Originally posted by N_Jay
Why?
It cost the station 1% to 3% to run the card.
The station needs to maintain the credit equipment and I believe pay network connection fees.
The station runs some (minimal) risk of charges being refuted.
The station does not have access to the money for up to 30 days.
All these are costs.
Very good points, and let me expand.
In most cases financial processers charge 2-3% to run a Credit transaction, but there is usually no network connection fee. The processor covers that cost. Refuted charges are known as chargebacks and the risk is a very real business expense. This is the primary reason that most point-of-sale software (Home Depot, grocery stores, etc) is written to encourage people to use Debit (Enter your PIN) because it's virtually impossible to claim fraud. Also, Debit transactions are settled the next business day. Credit transactions can take a few business days, but if your processor is taking up to 30 days to deposit the money in your account, you should switch :)
There are two reasons that you don't see this type of business practice more often.
#1 - In every financial issuer (VISA, MC, Amex, etc) agreement, there are rules against charging a surcharge, but in this case, the gas station is circumventing those rules by offering a "Cash Discount" which is allowed.
#2 - If you are a corporate branded fuel merchant, the brand that you purchase fuel from will typically waive the processing fee. For example, a relative of mine owns a Chevron, and as long as he buys a minimal amount of fuel from Chevron, they provide him with the Credit card processing free, even for non-fuel related purchases.
I can't stress enough the fact that as gas prices are going up, the gas station owners are not the ones benefiting. The post above is very accurate in regards to station owners feeling the pinch.
Sorry for the long post :eek: |
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| N_Jay |
quote:
Originally posted by mikey159
All these are true, but they are not newly true.
Cash discounts have been around a long time.
quote:
Originally posted by mikey159
The stations are just trying to find new ways to make money from those of us shopping price.
Or there margins are getting squeezed by over cost sensitive shoppers and they have to find a way to cover some of the costs that used to be covered more easily.
quote:
Originally posted by mikey159
They realize that at todays prices fewer people are buying gas, even though we are paying more, they are selling fewer gallons. Since they still have their costs, rent, electricity, gas, etc, they too are feeling the pinch of higher prices and are getting creative about making more money.
Or not loose as much.
quote:
Originally posted by mikey159
Are they giving we consumers the full discount for using cash instead of credit, probably not!
Or is the discount even greater than the cost.
It might be aligned with the "value". |
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| jcantanixon |
quote:
Originally posted by mikey159
Are they giving we consumers the full discount for using cash instead of credit, propbably not!
12c a gallon is roughly 3%, so I'd say they were giving the full discount and hoping that you'll buy something from them when you go inside to pay or go back inside to get your change. |
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| N_Jay |
quote:
Originally posted by jcantanixon
Very good points, and let me expand.
. . . . . . .
Sorry for the long post :eek:
Don't be! There is no rule saying posts need to be short. |
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| N_Jay |
quote:
Originally posted by jcantanixon
12c a gallon is roughly 3%, so I'd say they were giving the full discount and hoping that you'll buy something from them when you go inside to pay or go back inside to get your change.
Yes, but the low price on the sign could bring in some non-cash customers, and some customers that intended to use cash may need to use credit do to the amount of the fill up.
BUT, the real reason is prices are more closely aligned with value than cost.
Look into the significant work done by ARCO in determining the cost and value proposition of credit in the gasoline market.
They launched the first national brand NOT to accept credit cards.
Of course at that time the cost of supporting the cards was higher and the value was lower, so the results were different. |
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| Roger |
I've seen this here at one local station for the first time. It used to be different for cash/credit some time ago. Then they started advertizing cash or credit same price.
It's been the same price for years now, but with gas so high it seems to be gimick to get people to stop (hey, I'm saving a few cents) and also to get foot traffic into the store. They don't make much on fuel but make a killing on pepsi. |
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| rocky |
| Paid 3.89 last weekend and filled up today at 3.99 different station, cash is king (and my credit card bill would look horrendous if I used it for gas) |
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| colorider |
| Moved to Off-Topic |
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| Samuel2003 |
http://cosmos.bcst.yahoo.com/up/pla...pup/?cl=8732718
I also received this via email from a very reliable source:
"Yesterday I went to my local Texaco gas station where the sign clearly says “Regular Gas $4.39 per Gallon with Cash or Debit Card”.
So I put my debit card in, the pump display ask me to select debit or credit, I select debit and enter my pin number. As soon as I start to pump, the price covertly goes from $4.39 to $4.51 per gallon. I go question the attendant after my fill-up and he explains that I need to decide “debit or credit” before I put the card in the pump. Once you swipe your debit card in the pump, the pump defaults to the credit card price. I was refused a refund…I pass this on to remind you that there is still a lot of fraud going on at the pump…be careful." |
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| Roger |
quote:
Originally posted by Samuel2003
http://cosmos.bcst.yahoo.com/up/pla...pup/?cl=8732718
I also received this via email from a very reliable source:
"Yesterday I went to my local Texaco gas station where the sign clearly says “Regular Gas $4.39 per Gallon with Cash or Debit Card”.
So I put my debit card in, the pump display ask me to select debit or credit, I select debit and enter my pin number. As soon as I start to pump, the price covertly goes from $4.39 to $4.51 per gallon. I go question the attendant after my fill-up and he explains that I need to decide “debit or credit” before I put the card in the pump. Once you swipe your debit card in the pump, the pump defaults to the credit card price. I was refused a refund…I pass this on to remind you that there is still a lot of fraud going on at the pump…be careful."
That's interesting, the station I was reffering to above is also a texaco. they have a huge sign that shows a cheaper price if you use cash or a texaco credit card. |
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| dj5 |
quote:
Originally posted by Samuel2003
http://cosmos.bcst.yahoo.com/up/pla...pup/?cl=8732718
I also received this via email from a very reliable source:
"Yesterday I went to my local Texaco gas station where the sign clearly says “Regular Gas $4.39 per Gallon with Cash or Debit Card”.
So I put my debit card in, the pump display ask me to select debit or credit, I select debit and enter my pin number. As soon as I start to pump, the price covertly goes from $4.39 to $4.51 per gallon. I go question the attendant after my fill-up and he explains that I need to decide “debit or credit” before I put the card in the pump. Once you swipe your debit card in the pump, the pump defaults to the credit card price. I was refused a refund…I pass this on to remind you that there is still a lot of fraud going on at the pump…be careful."
This sounds more like the station needed to provide more consumer education and awareness more than it was fraud.
'As soon as I start to pump, the price covertly goes from $4.39 to $4.51 per gallon. I go question the attendant after my fill-up."
The price being paid shows when starting to pump, why wait until after the fill-up to ask the attendant about the price difference?
I use my credit card for all gasoline purchases and receive a 5% rebate for every dollar, which is now about 22 cents per gallon. |
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| Samuel2003 |
quote:
Originally posted by dj5
This sounds more like the station needed to provide more consumer education and awareness more than it was fraud.
'As soon as I start to pump, the price covertly goes from $4.39 to $4.51 per gallon. I go question the attendant after my fill-up."
The price being paid shows when starting to pump, why wait until after the fill-up to ask the attendant about the price difference?
I use my credit card for all gasoline purchases and receive a 5% rebate for every dollar, which is now about 22 cents per gallon.
"more consumer education and awareness" could also translate to being "more upfront and honest"...
The person that sent me the email is neither stupid nor ignorant. I haven't spoken to him in person regarding the incident but it wouldn't surprise me if he noticed After he was done (e.g. comparing totals).
I have a Chase Shell M/C. I had been using it primarily for gas purchases due to a rebate but only recently have come to find out that there is an upper limit as to how much I can get back per month... :3: |
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| robrecht |
quote:
Originally posted by Samuel2003
"more consumer education and awareness" could also translate to being "more upfront and honest"...
The person that sent me the email is neither stupid nor ignorant. I haven't spoken to him in person regarding the incident but it wouldn't surprise me if he noticed After he was done (e.g. comparing totals).
I have a Chase Shell M/C. I had been using it primarily for gas purchases due to a rebate but only recently have come to find out that there is an upper limit as to how much I can get back per month... :3:
What's the monthly limit? We're usung Shell & Hess cards for 5% gas dicounts. Actually, the Hess card is -10% for the first 3 months. So I paid $3.50/gal last Sunday on the way home from the dragstrip. |
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| dj5 |
quote:
Originally posted by robrecht
What's the monthly limit? We're usung Shell & Hess cards for 5% gas dicounts. Actually, the Hess card is -10% for the first 3 months. So I paid $3.50/gal last Sunday on the way home from the dragstrip.
I have a Chase M/C and Visa. Both have 5% rebate on any gas station, grocery store, & drug store. 1% rebate on everything else. The annual limit on rebates is $300 for each card for a total of $600. My wife also has the same M/C so potential total purchase rebates $900 annually. |
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| TomStromie |
Discover Card is currently paying me back 5% on fuel and hotel stays and my MC card is always 2% back on fuel and groceries.
Stations may charge extra for credit purchases, but I will only stop at them as a last resort. They lose today and any future business from me because actions have consequences. |
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| dj5 |
Stations may charge extra for credit purchases, but I will only stop at them as a last resort. They lose today and any future business from me because actions have consequences. [/B][/QUOTE]
Stations are giving discounts for using debit or cash, not charging more for using credit. Stations are charged 3-5% of the transaction total by the credit card companies for processing the cards. The stations also have to absorb any chargebacks for fraudulent card use. Stations are giving part of the processing fee back to the customer as a lower price per gallon to encourage them to use either cash or debit.
Stores usually make more money on one cup of coffee than they do for a 15 gallon fill-up. Many station owners are struggling to make a profit, and most of the large oil companies (Shell, Exxon/Mobil, BP/Amoco/Arco, Texaco/Chevron) are getting out of the company owned and operated sites because they are unprofitable.
Since Credit card companies get a fixed percentage of each dollar, they are rolling in the cash as the price of retail gas prices go up. I work for one of the major oil companies, so this kind of information all the time. |
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| dgipalo |
quote:
Originally posted by N_Jay
Why?
It cost the station 1% to 3% to run the card.
The station needs to maintain the credit equipment and I believe pay network connection fees.
The station runs some (minimal) risk of charges being refuted.
The station does not have access to the money for up to 30 days.
All these are costs.
Against those costs consider the costs of cash:
1. Higher risk of 'shrinkage'.
2. Handling costs of secured pick-up, or significant risk of armed hold-up.
3. Increased risk and sophistication of Socialists with initiative doing DIY income re-distribution. The more the perceived gain, the better class of thief you'll get.
4. With a reputation for higher cash levels, see above. |
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| jdeanski |
quote:
Originally posted by dgipalo
Against those costs consider the costs of cash:
I find that fewer and fewer people carry cash. I used to pay cash for my gas then stations went to "prepay" so instead of going in, leaving a deposit and going in to get my change or give them more money to fill up I changed to my credit card. In my store I have people using their cards for $5.00 or even less! There are days I will do $2k in total sales with less than $50.00 cash. |
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| dgipalo |
quote:
Originally posted by jdeanski
I find that fewer and fewer people carry cash. I used to pay cash for my gas then stations went to "prepay" so instead of going in, leaving a deposit and going in to get my change or give them more money to fill up I changed to my credit card. In my store I have people using their cards for $5.00 or even less! There are days I will do $2k in total sales with less than $50.00 cash.
There's also the Cynic's view that the 'cash discount' is offered only because so few people will take advantage of it, giving the station owner the marketing perception of lower prices without really having to lower them.
There was an MSNBC Link on various marketing measures used to create impressions only casually related to objective reality. Wonder if these schemes are examples of that sort of stuff? |
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