I'm going to tell my fam about this, really shady

~Another Rob from Astoria NY

Here in cali alot of stations started showing up with the "Cash Discount" Its funny how they try hiding the signs.

Hey now, wait a minute--it sounds like charging more for credit card is STORE POLICY. And as we ALL know, "store policy" trumps anything and everything else. "Sorry dude, it's store policy" is your cue to suck it up and do what they want you do, the way they want you to do it. So man up and deal with it.

They can't charge a surcharge, but they get around that by saying that the higher price is the regular price, and the lower price is a discount, which they are allowed to give. They'll never say that the higher price is a surcharge.

I'm confused... there are a shitload of stations here in Cali that will charge like $.10 for credit. Is it somehow OK as long as they say that there is a cash discount?
I also go to convenient stores that occasionally charge a 50 cent credit card fee. I assume that isn't legal either, but couldn't they just say you get a 50 cent discount for paying cash?
Seems like a retarded law if the loophole is just to say that you get a discount for using cash.

Its why people who make laws are stupid. A discounted price for cash versus a surcharge for credit is no different in practice.

I have seen many gas stations with a cash price and a credit card price on their signs. I live in NY too so the next time I see it looks like its time to report it. They don't explicitly say its a surcharge though.

Actually, a cash discount and credit-card surcharge *aren't* the same in practice.

A charge card surcharge results in paying *more* than the advertised price.

A cash discount results in paying *less* than the advertised price.

If they're charging you more than the price on the sign or sticker, that's a surcharge, and generally not allowed. If they take a discount at the register because you're paying cash, that's a discount and it generally *is* allowed.

@CyrusOpeth: Yep, love that "store policy" and how it trumps state law. Like in Connecticut, it's against the law for any gift certificate or gift card to expire and it's also against the law to charge fees to maintain the balance or check the balance. So if you try to use it a year later and it says on the back "only good for one year from date of purchase" they will fight you tooth and nail. "Store policy is one year" they say. One spa tried to not hand the gift certificate back to me while I fought them over it! They were going to tear it up! I had to go nuts to get my $100 gift certificate back, and fight them to explain the state law.

laws that prevent credit-card surcharges are patently bad for consumers. they're pushed by the card issuers so that cash buyers have no choice but to subsidize credit card transaction fees.

if the amount of the discount/surcharge is significant enough for you to pay in cash, you are not a person who wants to lose this choice. do not help enforce these laws!

@Bizdady: A Cash discount is completely legal. It's a credit surcharge that is not.

While this is clearly wrong, it isn't wrong (morally, although it appears wrong legally) to charge debit/credit surcharges. The business pays extra for these services. They have two choices: Pass the surcharges on to the consumers causing them, or pass them on in the form of raised prices for everyone. No business does anything for free.

So, all of you that carry cash in those 9 states: Do you enjoy knowing that 2% or more of the price of everything you buy is subsidizing all the other people that don't? No? Well... stop electing morons that create consumer-unfriendly laws like this!

That's weird. I used an ExxonMobil gift card a couple weeks ago at a Mobil in Michigan, and I was charged the cash price. (I remember, because it took me a moment to understand why the receipt showed a lower price than the station sign.)

Loathe as I am to be seen defending ExxonMobil, they're probably not to blame for Rob's surcharge. That station owner has probably gone rogue. If I were Rob, I'd complain to ExxonMobil and see what happens.

@shepd: Or carry a credit card, use it wisely so that it saves you money, and insist that places where you spend your money obey the law of the state.

I've run into this a few times. the story I received was that the pumps are dumb and cannot tell the difference between credit/debit/gift cards when processing a transaction. Transactions processed at the pump are processed like a credit transaction because funds have to be verified prior to the pump switching on. When I paid via gift card in the store it was treated like a cash transaction. I'm sure there are stations that don't handle it this way and rip the customer off.

Interesting that Florida is one of those states. I know of one gas station that charges a higher price per gallon if you pay with a credit card. I'll file a report.

@Zeniq: Except according to that list up their neither is legal in Cali as your not allowed to have two different prices for credit or cash REGARDLESS of how its tricked onto it.

In NJ I have basically made it a point to avoid at all costs ANY station with two different prices regardless of how cheap it is and regardless of if i am paying cash or credit. Its the super shady ones that tend to be doing it anyway with company own stations giving one price.

@trujunglist: I think that the requirement is that the higher price is the one that is advertised, and that they can offer a discount on that price.

That link for Just Ask Asa is wrong. In CT, they passed into law over the summer the right for gas stations to charge different amounts. They did this during the $4+ per gallon time when the station owners were clamoring for it.

@guy1138: Thank you for that, I was just about to type it. Saved me some energy.

@floraposte:

I'm not getting it. How is it saving money if it's either directly (in states without these laws) costing you 2% or indirectly (in states that require hiding the cost in the price) costing you 2% or more extra? Because it has a rewards program? Is the rewards program better than saving 2 or 3% on every purchase?

Wow... I JUST had this happen to me yesterday! The Consumerist needs to get out of my head. And while it was annoying, it only ended up costing an extra... 40 cents?

But that's not really the point. You should post the numbers for the CT Attorney General too. Hell, why not all states?

Aw fuck it, I'll just google it.

Ok, they are not violating the law. The way it works is it is called a "Cash Discount." This does not violate the merchant agreement, nor does it violate the law. This is how they get around the rules.

@Julia789:

God, I wish the federal government would just be done with it and outlaw gift certificates on the same grounds they destroyed that alternative-money guy.

@thrid001: That's technically a requirement of the CC merchant agreement. I've lived in three states with the law (CA, CT, NY) and they all ban any difference in price-discount or surcharge.

Seriously, people, THE LESSON HERE IS GIFT CARDS SUCK. PERIOD. For every conceivable reason someone can come up with for why they are good, there are 2 more for why they are bad.

- You're loaning the retailer money, with no interest. This is a retarded investment.
- Odds are fair to middlin' the loan might be 'forgotten about', and the card will never be used / fully used. You just GAVE the retailer money.
- The card might be one of those that loses value month by month.
- You just gave your nephew cash, but it's cash he can only spend in one place. If you really want to impress him, just give him the cash, or better yet say "I have $100 in my wallet, let's go shopping."

I hate getting gift cards, and I never give them.

The Sunoco stations here have a better idea: 3 cents off a gallon if you use cash, the Sunoco gas-only credit card (not the Sunoco MasterCard), or a Sunoco gift card. That way, gift card holders enjoy the same cash discount. And since retailer-only gift cards don't have 1.5-3% merchant fees like Visa/MasterCard/Amex, it only makes sense to extend the cash discount to gift cards.

Maybe the Mobil station owner could learn from them...

The thing that doesn't make sense here is that even when you do use a credit card at a gas station that charges a different amount for cash than credit is that they usually give you the cash price if it is a card from that gas company. The whole reason they charge a different amount is to compensate for credit charges.

One of these days someone is going to organize people to go to every gas station that charges extra for credit and have them make several $.01 transactions. Considering most cards charge a minimum amount to the retailer every time that a card is swiped, these gas stations would take huge losses if someone was able to get enough people to do this.

I live in TX, and travel frequently, and have never seen any kind of a credit surcharge, or cash discount, is this really that widespread? The way I see it, the business should just "eat" the fees they pay to the processor in exchange for more business. Credit card pumps run customers through faster (more sales per hour if all pumps are used) then it would be if everyone was paying cash. I KNOW they may be passing fee on by spreading it across all sales, including cash sales, but whats 2 cents on something you are getting at a "convenience" store, they already put a much larger markup on merchandise then a grocery store would.

@scottr0829: they can charge different amounts, but they must advertise the higher (credit) price on their price boards. they CANNOT advertise the lower cash price & then charge more for credit (which explains the difference between a surcharge & a discount).

also, this was always legal in CT, but franchise agreements between the oil cos. & station owners often prohibited the practice. the legislation passed this summer outlawed any such language from franchise agreements, thereby allowing station owners to take advantage.

from my experience, it hasn't done anything to reduce prices. cash discount stations are often 10¢ higher than "one price, all price" stations, with a 10¢ discount for cash. thanks, but i think i'll fill up over here where it doesn't matter what form of payment i use.

@thrid001: The difference would be in the initial price they would be able to advertise ...

@InThrees: Considering the types of gifts I get from my in-laws, I'll take Gift Cards, thanks.

@Jim Topoleski: It is also not that hard to work around. If the owner of a gas station wants to differentiate, then they can open a second gas station (or convert one if they already have a second one), give it a discount brand name, and go cash-only at that location. Naturally, people can still use cash at the credit location, but it will cost the same to the customer as credit, as the law intends.

There's only one gas station in my area (in Northern Virginia) that offers a 5-cent cash discount. If the cash-discount price is the lowest around, I always debate whether it's worth two trips from the car to the counter (one to pre-pay and have him authorize the cash price, the second to get my change), just to save 70 cents. I'm that lazy :)

@Outrun1986:

In every case I've seen the cash price is a 'discounted' price so this gets around the surcharge laws.

I like it myself since i can choose to either take advantage of the convince of credit or to have enough cash on me to fill my tank. Also most places charge you the cash price if you use a debit card (i don't go to the ones that don't).

@ceilingFANBOY:

No they would just quickly tell you to buzz off.

@guy1138: Are you seriously saying that you don't see how giving a cash discount is the exact same thing as charging a credit card surcharge? Legalities aside, there's no functional difference, only a change in the words.

This is nice to know because I live in California and as far as I know all gas stations are adding surcharge to all credit care transactions. Does anyone know the consumer helpline in CA Attorney General?

I think the bigger problem we face in the area (NY, NJ, etc) is when the OP said "I went in to complain, but the clerk mumbled something that I couldn't understand"

Try getting something coherent out of these gas attendants. At least in NJ they post the credit price as well as the cash price, making it much easier to avoid those that charge more. Good luck filing a report, I doubt it will get you anywhere.

@pmcpa2: Isn't fraud against the law? The gift card states that it isn't a credit card.

@shepd: I think you missed the part where the states and the credit card companies FORBID this practice. Companies can't choose which laws/regulations to follow, they're subject to the rules just like everyone else. That 2 or 3% fee from the merchant is a cost of doing business.

If they don't want to play by the rules, then they shouldn't take credit cards. Let's see how long a cash-only gas station survives....

The gas stations absolutely are not charging a surcharge for credit cards, debit cards or gift cards -- the higher price is the regular price for gas.

In Rob's case, he paid using a gift card, which like a credit card, costs money to process the transaction. You see, it costs gas stations money each and every time when people pay with a card vs. when they use cash -- around 1.5 to 2 percent of the transaction total, plus a base fee.

So in an effort to encourage cash use, stations drop the gas price for cash, which in many cases, is less than what they bought the fuel for. Gas stations only make pennies on every gallon sold, after you take out the cost of labor, rent, utilities, credit card processing fees, etc. They aren't getting rich. Check out the facts here: http://www.csnews.com/csn/search/article_display.jsp?vnu_content_id=1003845407

@Bizdady: in VA I've only seen one gas station offer different prices (so far) for credit and cash...they had an SUV parked out front with a huge sign over the one side advertising it.

@Sidecutter:

The functional difference is that using a credit card at a location with a surcharge, you drive up, see one price and pay something higher. Using a credit card at the discount location, you drive up, see one price and pay that price. The difference lies in what payment method costs the advertised price vs. what payment method costs more or less.

Discount = cash pays less, credit pays advertised
Surcharge = cash pays advertised, credit pays more

In the end, you're largely right that the difference is meaningless, but in terms of perception, people like being surprised by a discount more than a surcharge.

@CyrusOpeth: OMG, this is totally different than the return policy thing, WHICH WAS A MANUFACTURER POLICY.

@superdantx:
I travel the armpit of Texas (Corpus Christi-Laredo) often enough to note variations in gas prices.
I've seen card discounts at Murphy Gas, (WalMart, but they are the cheapest unless someone gets frisky and starts a gas war) Gas card discounts at Stripes, and Shell, but nothing like what I'm hearing from the other users on here. Perhaps we Texans are either too savvy, or just too mean for the stores to pull something like that off. We do have problems with pumps going out of whack from time to time (the one up by Texarkana that recently got shut down), but nothing as twisted as this.

@chucklebuck: "all prices reflect a 10% cash discount"

Difference is totally meaningless.

@punkrawka: We have one that has a bill taker at the pump, and you just take your receipt in and get change. I really wish more stations had that. If they took those new swankey dollar coins things would be even better.

@superdantx: "I KNOW they may be passing fee on by spreading it across all sales, including cash sales"

I'm still a little peeved that as a Cash customer I am paying for the credit card fees that are charged to the merchant.

It kind of reminds me of the time in a local government class where a student couldn't figure out how raising taxes on property that is rented out ultimately hurts the tenant.