UPDATE: MyGallons Refunding Membership Fees?

Consumerist commenter doireallyneedausername forwarded us an email he got from MyGallons.com, claiming that his membership fee will be refunded because MyGallons.com cannot find a credit card processor. The email, signed by CEO Steve Verona, says that current members will get a free year of MyGallons.com when (if?) they are ever able to process transactions. Read the email inside.

Dear MyGallons Member,

We developed the MyGallons program because, like you, we wanted to help solve the problems caused by the rising price of gasoline. We are proud of what we created and look forward to providing you with this innovative service in the very near future.

Due to difficulties with a key supplier, we are unable to deliver the service we promised to you at this time. We apologize for the delay. You will be receiving a refund on your credit card for 100% of the membership fees that you have previously paid.

To express our sincere thanks for your loyalty and support, once we secure a new payment network, you will enjoy the benefits of the MyGallons program free of membership charges for your first year.

Rest assured, we are working diligently to secure a relationship with a new national card processing company. We will keep you updated every step of the way as we overcome the challenges we face together.

Sincerely,

Steven Verona
Founder and CEOMyGallons LLC

The whole MyGallons saga began when the media fell all over themselves about the gasoline hedging start-up, prompting the BBB to investigate the company’s ability to process transactions at the pump.

The BBB found that MyGallons.com had no contract with a processor, telling Consumerist that USBank, the company that was touted in MyGallons.com’s press release, had ultimately declined to participate.

MyGallons.com posted a notice claiming that USBank backed out. The BBB nevertheless issued a poor rating to MyGallons, because despite their lack of contract to process transactions, the company was still collecting membership fees. Later, the BBB met with MyGallons and revised their rating to NR (no rating) after the company agreed to suspend accepting new memberships.

Boy, that was one hell of a press release, wasn’t it?

Comments

Edit Your Comment

  1. linkura says:

    Well that’s good of them at least. Glad to see their “customers” are getting refunded with no harm, no foul; I’m actually pretty surprised about this happening so quickly without a lawsuit.

  2. TheBusDriver says:

    If they have no processing company, how can they refund to credit cards?

  3. sleze69 says:

    @TheBusDriver: I think they are referring to the processing of gas purchases.

    I am looking forward to getting this email once I get home. They better not try to auto-bill me once they get up and going.

  4. se7a7n7 says:

    I think the main problem they’re having is that no one will work with them because there is no way to do this without losing lots of money.

  5. Ubermunch says:

    First off… Has anyone actually received the refund? I’m still a bit skeptical and would like to hear when the refunds kick in. Something tells me there will be some sort of problem that will “delay” the process.

    On another note…

    se7a7n7 I think has it right. The business model as planned didn’t seem to be a winner. The risks associated with running a program like this are huge – especially with something as volatile and inelastic as gasoline.

    If you are looking to save money on gas you’d probably do better for youself by following the basics:

    1) Car maintenance: tire pressure, tune-up, exhaust check, etc.

    2) Slow down, no jack rabbit starts, etc.

    3) Use a card that provides some sort of rebate like Discover or some program cards.

    4) Keep a close eye on gas prices in your area. The web’s great for this.

    Sure none of these are a sexy as some price locking program, but the risks are minimal (cash wise) and the payout can be as much as 15% lower fuel costs (60 cents a gallon). Personally, I think I’m getting about 10% back per gallon… and I’m lazy.

  6. “We will keep you updated every step of the way as we overcome the challenges we face together.”

    Excuse me…? The challenges WE face together. How about the challenge YOU created? Props for working through this with the customers you conned, but don’t call this MY challenge. Your challenge, you fix it.

  7. malcs says:

    I think its the honest thing to do!

  8. NumberFiveIsAlive says:

    I saw this on the ‘news’ the other day on a FOX channel. They were reporting it like it was something you should do. Obviously they don’t investigate their reports too much.

  9. sleze69 says:

    @NumberFiveIsAlive: I got the same impression from The Consumerist when I signed up.

    I got my email today. Thank god I am out of that scam (for now).

  10. pimptacular says:

    Well at least it saved more of you suckers from making a fundamentally bad deal.

  11. TeraGram says:

    And yet, there’s nothing about this on their website, as far as I can tell, anyway.

    The smell of fish is so strong, I would think I was right next door to Tsukiji Fish Market.

  12. xkevin says:

    @se7a7n7: Not necessarily. Since members are paying for gas upfront, they’ll probably invest the float and hedge price risk with futures contracts and/or swap agreements.

  13. Scuba Steve says:

    Well, I figured it wouldn’t last long, but it’s nice to see that it generally was an honest effort to hedge gas prices.

  14. Rachacha says:

    @se7a7n7: Paypal offers credit card processing. While it may not be the most affordable or most convenient, it can be used to help get their business up and running, and if they are reputable show the banks that it is a viable business (and on the up and up) and move to a more streamlined/affordable credit processing company. That said, I still have my reservations about the company, but this latest move to refund money because of the issues they are having in my opinion, gives them some credibility…if they were a “take the money and run” scam, they would have just quietly closed up shop.

  15. pimptacular says:

    @Scuba Steve: An honest hedge against oil are you kidding? Did you read the fine print; Annual fee, transaction fee, and they choose the price of the discounted gas…give me a break.