Gas stations say NO to credit cards...

[Tanning Queen]

Credit-card-fees-Some-gas-stations-say-no-more-- Yahoo! Autos Article Page

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."

Lenard's group reports convenience stores paid roughly $7.6 billion in credit card fees last year, while making $3.4 billion in profits.

The way interchange fees are structured has long annoyed retailers, prompting calls for relief.

Legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies.

The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.

"We have always contended that it doesn't cost Visa and MasterCard any more to process a $1,000 transaction than it does a $100 transaction," said J. Craig Shearman, vice president of government affairs at the retail federation.

The credit card companies say fees are just part of the cost of doing business.

MasterCard has capped interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin.

Accepting MasterCard also gives gas stations "increased sales, greater security and convenience, lower labor costs, and speed for their customers at the pump," Gamsin said in an e-mail to The Associated Press.

Visa argues that the fees are offset "by the tangible benefits to stations and their customers, such as the ability to pay at the pump," the company said in a statement to the AP.

Absent congressional action, gas stations are seeking other relief, including discounts to customers who pay in cash.

Shipley Energy, which owns 23 Tom's Convenience stores in Pennsylvania, has partnered with a new credit card company, Revolution, which charges smaller interchange fees.

Bob Astor, wholesale fuels business manager for Shipley, said those savings get passed on to customers as cheaper prices at the pump. Customers who pay with the card get an automatic 10 cent discount.

Gas stations in South Carolina, Georgia, Maryland, New Jersey and Arizona are among those offering cash customers a discount, with savings from four cents to 10 cents per gallon.

The Connecticut General Assembly recently passed legislation to make it easier for stations to offer discounts for cash purchases, bidding to cut consumer prices by 10 to 12 cents on average.

Discounts for cash customers may not, however, be the stations' salvation.

The National Association of Convenience Stores reports about two thirds of transactions at gas stations were with credit or debit cards in 2007, a figure expected to rise this year.

"The problem with cash discounts is, if people don't have the cash or don't want to spend the cash, you've inconvenienced them," Lenard said.

The experiment at Mr. Ed's Chevron, though, has paid off so far.

The station has been in business for 44 years and the ban on plastic hasn't scared many people off, Randolph said.

"We've got generations of customers who come here," he said. "Most of them have accepted it."



Copyright © 2007 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.

[Tanning Queen]

Isnt this a violation of the merchant agreement? I always thought it was. But anyway, it doesnt surprise me but how many people carry cash now? Most people are using cards to live off of so they dont have to use what little money they have in hand.

Sad times...

[frankie]

If I could I would put a sign up "Cash Only" The only problem would be with EFT`S. Bank fees, merchant fees, etc eat your profit up that is for sure. .

[Kathe]

I would love to be cash only but that would take away about 75% of my business.

[Glowtanning530]

there is gas station here that offers a slight discount if you pay with cash vs. credit

[nws2002]

Originally Posted by Tanning Queen

Isnt this a violation of the merchant agreement? I always thought it was. But anyway, it doesnt surprise me but how many people carry cash now? Most people are using cards to live off of so they dont have to use what little money they have in hand.

Sad times...

I think its a violation to charge an add'l fee to use a credit card, its not a violation to give a discount to cash customers.

I know this wouldn't work for me, too many of my customers use credit or check cards. I know that I rarely carry cash myself, its just easier to use the check card.

[Tanning Queen]

I think you are correct.

I am sure if you put up a notice that there is a discount for cash, those people would bring in cash. I had a friend that would do that in her salon. Since there was an ATM right around the corner.

[Jones]

Buy an ATM machine so that you have a ATM in the salon...this will give you a profit on the ATM transaction.

[Beach Bum]

It is also a violation of most merchant agreements to ask to see a ID. Unbelievable, but it is in most agreements. Go figure.

[Jones]

You're shitting me?!?! I didn't know that!

[uv2021]

Next thing...black market gas, smuggled in from mexico.! You show up at your "dealer's " house with jerry cans in the middle of the night.Fill up your truck and all the jerry cans you can carry.And of course PAY IN CASH!!!!Take a lesson from the pot smokers and all othors involved in the underground economy.Up here we even have smuggled cigarettes.The gov't taxes them so much that smokers buy cigarettes smuggled from indian resreves.

[totaleclipse]

O H my goodness.. my mom called me days ago .. because of this .. she was snapping at the guy!! the price listed on the sign doesnt say cash only.. this is such a scam to american people .... i cant deal with it... its such BS......

they are making hand over fist ... and i have to take cc for $10 charge... im losing $ too...

[Ezliving_Jim]

Exxon near me is charging one price for cash or Exxon card. Ten cents more for VISA, MasterCard, etc.

[solarmeter®]

Gas is hoovering around $3.69 cash and $3.76 credit here.... even though wholesale oil and gas went up big over the last 2 days. The Russian Bear caused that.

It is ILLEGAL to charge more for credit. But not illegal to charge less for cash. Go figure. Some idiot left a big loophole in that law... eh?

[Mojave Tan]

Originally Posted by solarmeter®

It is ILLEGAL to charge more for credit. But not illegal to charge less for cash. Go figure. Some idiot left a big loophole in that law... eh?

I was thinking it was illegal for credit to be more. How do they get away with just positioning it differently if they don't have a consistant price.

[navigatin1]

Back in the day gas stations used to have a "credit" island and a "cash" island. The pumps at the credit island were .10 cents a gallon more. Then came the self-serv stations and the prices slowly blended togeather.
Seems history is repeating itself.