(WCBS)
It’s no secret that gas stations all around the country sometimes tack on the cost of credit card processing for fuel payments. And while you may be willing to pay a few cents more per gallon pumped, some stations in New York are reportedly charging credit card customers a few dollars more per gallon of gas.
CBS New York’s Ask Asa scoped out are several stations in Long Island that are socking it to consumers who pay with a credit card. While the cash price for gas is close to the national average of about $4.12, these stations’ credit card prices are about $2-3 higher. At one station, for example, premium grade gas was priced at a whopping $6.19 per gallon if you choose to pay with a credit card,
Clifford Coleman, Director of Weights and Measures for Suffolk County, NY, which ensures the accuracy of pumps, says:
We can’t do anything in regards to the extra charging for that $2 per gallon for use of the credit card [for payment]. It’s not illegal.
Are these stations ultimately encouraging cash payments by passing on to the consumer the merchant’s credit card authorization fees and other bank charges? According to Asa, the station’s owner–and his lawyers–had “no comment.”
Our brainier cousins over at Consumer Reports have information on the most fuel-efficient cars and money-saving gas tips–including why you and your car can do without premium gas.
Ask Asa: Credit Card Gas Price Outrage [WCBS 2 New York]
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So between the added fees for credit cards and the debit card blocking – we’re supposed to just pay cash for gas?
And just about every gas station now requires pre-pay for gas, so you have to go inside, wait in line and go back for change if you gave them too much. This won’t be a pain in the ass at all…
Erm, pre-pay for CASH.
I’d just go to a different gas station instead of supporting such shenanigans. This is a handful of stations on Long Island. I’m sure there are dozens of others to chose from.
My God what a spoiled world we’ve created.
We haven’t created a spoiled world. In the ’60s one could sit in his or her car, have someone else pump the gas, check the oil, add air to the tires and wash the windshield. They would then bring out the manual credit card imprinter and have you sign while still seated.
The ones who have gotten spoiled are the corporations.
How many gas stations have enough employees to deal with a considerable increase in cash-paying customers? It seems like many places forget that there is inherent overhead associated with cash transactions.
That’s okay. They’ll just increase the price of gas for cash customers to cover the increased cost of dealing with cash transactions.
Exactly, stupid fucks can’t count as it is anyway…….
Or think of it this way. Credit card customers are supposed to move along to the gas station down the road.
It’s not added fees for credit cards, it’s a cash discount. =P
According to the CC companies, you can not charge extra fees for using a CC, but you can offer a cash discount… Glad to see they worked hard at closing that loop hole to prevent companies from abusing it. After all, they are all about protecting the consumer…
/s
See, cash isn’t dead yet!
Seems to me a sign like that would just scream to thieves, “HI! We have a LOT of cash since we don’t take credit cards! Come rob us!”
Can I exchange 3 chickens for a tank of gas?
I am pretty sure the trades available for gas are ass, cash, or grass.
You pretty much described the three items of value in the world economy.
He missed guns.
With a gun, I can get anything I want.
For a while, at least.
You need ammo too for it to be effective I think.
Only if they call your bluff.
ah yes. Good point. Guns, ass, cash, and grass. … and horses. hmmmm maybe this economy thing is a littl emore complicated.
Chickens are usually around $2 to $5 each, so essentially one chicken would be worth 1 gal of gas (roughly). To extrapolate further one would need 10 – 18 chickens per fill up depending on the vehicle.
Is that you Herbert Hoover?
If you’re talking about the gross sounding “whole chicken in a can, with giblets” then no.
Wait, you can afford chickens for gas? I already traded all of mine to pay for health care. (Thanks, Sue Lowden!)
Lately I’ve become convinced that the steps taken by merchants to discourage credit card use is simply a means by which to avoid taxes. When you pay cash, a dollar can go in the register and a dollar can go “under” the register. I’ve watched this happen at restaurants that discourage credit card use, and I’m certain it happens at gas stations.
When you have something like gas though it’s fairly easy to tell that they are underreporting income. The margins on gas are fairly low. If you have $10,000 in gas purchased from the wholeseller, but only sell $9,000 in gas to customers you end up trying to explain why you are selling so much gas at a loss.
Easier in restaurants where you may have paid for your supplies and labor in cash as well.
I read somewhere that all transactions over 2500 EUROS will be required to use some form of electronic payment to ensure tax compliance. This icky cash thing will have to go. I’m sure authorities would love for cash to go away so they can track every transaction made.
I think this may be in Spain.
I thought this went against their merchant agreements with the credit card companies. Did something change?
It’s against the agreements to charge a fee for credit card use…. the gas stations claim they are giving a cash discount, which is somehow allowed… and apparently different that a credit card fee…
It’s not being advertised as a discount, though. Two separate prices are clearly displayed.
The “credit” price is so much higher than the prevailing market price of gas; no reasonable person could believe this is really a “cash discount.” They need to find a better loophole, because this one won’t hold up.
Well they’re doing it. The ball is in the credit card companies court now. Lets see if they do anything.
However once they get into the business of telling business owners how much they’re allowed to charge for their products and services things are going to get real interesting.
They won’t tell them how much to charge. They’ll simply say “you can’t process credit cards anymore”. Have fun with that, merchants.
I doubt this place would even care.
If the average for gas is $4 and they are charging $4 for gas and tacking on $2 for credit cards, that isn’t a discount for cash. I’m not sure how anyone would believe that for even a second.
Now, if the average were $4 and they were charging $3.80, that might fly.
It’s my belief they are totally going against the terms they agreed to with the credit card companies.
It does.
Per MasterCard Rules (December 7, 2011):
http://www.mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf
5.11.2 Charges to Cardholders
A Merchant must not directly or indirectly require any Cardholder to pay a
surcharge or any part of any Merchant discount or any contemporaneous
finance charge in connection with a Transaction. A Merchant may provide a
discount to its customers for cash payments. A Merchant is permitted to
charge a fee (such as a bona fide commission, postage, expedited service or
convenience fees, and the like) if the fee is imposed on all like transactions
regardless of the form of payment used, or as the Corporation has expressly
permitted in writing. For purposes of this Rule:
1. A surcharge is any fee charged in connection with a Transaction that is not
charged if another payment method is used.
2. The Merchant discount fee is any fee a Merchant pays to an Acquirer so
that the Acquirer will acquire the Transactions of the Merchant.
Per VISA International Operating Regulations (October 15, 2011)
http://usa.visa.com/download/merchants/visa-international-operating-regulations-main.pdf
Surcharges 5.1.C
A Merchant must not add any surcharges to Transactions, unless local law expressly requires that a Merchant be permitted to impose a surcharge. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.
At no point in these agreements do VISA or MasterCard allow for “cash discounts”. However, card issuers do not police this, they need to be informed when there is an infraction of their agreements. When this happens, someone needs to call VISA and MasterCard (and other card issuers the merchant accepts) and ask to speak to someone in their Security/Risk Management department and report these infractions.
I thought this went against their merchant agreements with the credit card companies. Did something change?
Yup
Nope, Cash discounts are ok.
If asked the seller will say the price is $6 for all; but $4 if including the cash discount.
That’s not a cash discount. If the average for gas is $4, and you are charging $4, that’s the price. $6 is obviously an inflated price.
I don’t think it matters what the average is. If I want to charge $17,000/gal of gas, that’s my choice as a business owner (with the obvious consequence that I’d go out of business).
I would seriously doubt that anywhere in any credit card agreement is any mention of the average market price for any product.
It does.
Per MasterCard Rules (December 7, 2011):
http://www.mastercard.com/us/merchant/pdf/BM-Entire_Manual_public.pdf
5.11.2 Charges to Cardholders
A Merchant must not directly or indirectly require any Cardholder to pay a
surcharge or any part of any Merchant discount or any contemporaneous
finance charge in connection with a Transaction. A Merchant may provide a
discount to its customers for cash payments. A Merchant is permitted to
charge a fee (such as a bona fide commission, postage, expedited service or
convenience fees, and the like) if the fee is imposed on all like transactions
regardless of the form of payment used, or as the Corporation has expressly
permitted in writing. For purposes of this Rule:
1. A surcharge is any fee charged in connection with a Transaction that is not
charged if another payment method is used.
2. The Merchant discount fee is any fee a Merchant pays to an Acquirer so
that the Acquirer will acquire the Transactions of the Merchant.
Per VISA International Operating Regulations (October 15, 2011)
http://usa.visa.com/download/merchants/visa-international-operating-regulations-main.pdf
Surcharges 5.1.C
A Merchant must not add any surcharges to Transactions, unless local law expressly requires that a Merchant be permitted to impose a surcharge. Any surcharge amount, if allowed, must be included in the Transaction amount and not collected separately.
At no point in these agreements do VISA or MasterCard allow for “cash discounts”. However, card issuers do not police this, they need to be informed when there is an infraction of their agreements. When this happens, someone needs to call VISA and MasterCard (and other card issuers the merchant accepts) and ask to speak to someone in their Security/Risk Management department and report these infractions.
Unless *all* gas stations start doing this, it’s going to encourage people to get gas somewhere else, is what it’s going to do.
Thankfully gas stations are rarely in lock step on pricing and procedures.
Like the airlines, right?
Precisely.
So, if you pay cash, you have to enter the store to pre-pay at the register. Thus, they are hoping that you pick up some items that have better margins than gas.
not in New Jersey.. where I’ve also started to see a Cash price and a Credit Card price.
but NJ law mandates someone pump your gas for you.. which is convenient and allows me to pay cash without the hassle of going inside the kwik-e-mart
Find another gas station?
Don’t like what a gas station, or any business is doing? simply vote with your wallet and don’t buy anything from said establishment.
Simply get your gas somewhere else. If everybody did that, the station would change it’s policy, either by the current owners, or by the new owners that buy up the bankrupt business.
“Don’t like what a gas station, or any business is doing? simply vote with your wallet and don’t buy anything from said establishment.”
That’s only a single part in a multipart effort. The business must be called out on its practices. People need to be aware of the practice BEFORE they pull up to the pump with only a credit card and no gas in the tank. Capitalism is great when there is competition and knowledge.
then maybe they should stop waiting til the last second to get gas.
…at which point, you’re STILL paying grossly inflated prices, just on slightly less gas.
Assuming they have signs out advertising the two prices for different payment options, maybe people should read the signs before just filling up assuming the gas station is charging the same price as everyone else.
Boy it sure seems fun to blame the victim for not doing “something” around here, doesnt it?
Maybe one day we’ll try and focus on companies not being complete pieces of shit?
That would make me an entitled asshole, I know, but one day I can hope we can all be entitled to not get screwed as much as possible by everyone.
The problem with the signs and the two prices is that the huge sign on the pole is the cash/self-service price (again, in NJ it’s always full-serve). The sign on the pump may not be readable as you are approaching the station. I have started assuming at least a 10-cent higher price for a credit card transaction. If it was truly a discount, the credit card price would be on the pole and if I was willing to pay it, then found the cash price 10 cents cheaper, I could always pay that. But going in based on a cash price and finding out the cc price is not 10 cents more, but maybe 20 cents or 2 dollars, well, then I have to find a quick way out of the place.
That works nicely when there are alternatives.
Isn’t that just like posting a sign that says “Please Rob Me, I’m a cash-heavy business”?
uh, and
2$ a gallon isn’t “passing on to the consumer the merchant’s credit card authorization fees and other bank charges” … it’s god damn highway robbery. Merchant fees aren’t that high.
They’re passing on the rent, payroll, cost of merchandise and whatever else they can come up with.
duh. As a merchant, you need to be able to cover your cost of merchandise, rent, payroll, taxes etc. The leftover is profit.
Now, I’m sure these are ‘nice, honest’ businesses, that are not pocketing their cash sales and trying to avoid paying their taxes. They are just fed up with jumping through all the hoops of bank merchant card services, and all the expenses of accepting credit cards – you know, the cost of keeping up with technology is expensive.
/s
By that thinking, that means they are losing money on their cash transactions.
The gas station my brother works at has introduced a debit card that you can use to get 4-5 cents off a gallon. It withdraws straight from your checking account and since it is not made by visa or any credit card company they don’t have to pay fees on it. i don’t understand why more gas stations don’t use something like this.
There are a few around here that do this very thing. However, I do not like giving companies full access to my checking account.
I use my PayPal debit card, I pay no fees — infact I get 1% cash back — and the money comes out of my bank account.
Huh? New York is one of the ten states that allegedly have anti-surcharge laws:
http://usa.visa.com/personal/using_visa/checkout_fees/index.html
(scroll to the bottom)
http://law.onecle.com/new-york/general-business/GBS0518_518.html
So, I reiterate: Huh?
As already said, its not a surcharge on gas but a Cash Discount, which is legal and ok with CC’s.
Yeah, but that’s all in the way it’s advertised. I’m not seeing the word “discount” on any of the signage. Why is no one pursuing that angle?
If they truly were offering a discount, then they would have to advertise the highest price. For example, their sign might now say “Regular, $4.20 per gallon. Then, in very fine print, $6.20 for credit card users. We all know it’s a surcharge; They all know it’s a surcharge.
But, if the $4.20 were a discount, their sign would have to say:Regular $6.20 per gallon, $2 discount for cash. But all anyone would see form the street is that hulking $6.20!
Exactly my point. Can’t they be nailed on some advertising law, since they’re not doing what you describe?
It’s not a fee, it’s a “discount”.
But it’s not being advertised as a discount.
Its not being advertised as a fee either.
It seems I’m the only person doing this, but I refuse to buy gas from any gas station that charges more for credit card transactions, regardless of if I’m paying cash or credit. I don’t understand why everyone else just rolled over on this one, and supports it. So far my theory has been “if a gas station offers gas at one price, there’s another near by charging the same price, cash or credit”.
Interesting that according to Visa 10 states (New York being one) have laws against CC surcharges. However, they are allowed to give discounts for using cash/checks. I wonder how they make the distinction in a case like this between a discount and a surcharge. If all gas stations in the area have the same or nearly the same cash price it would seem to me it would be considered a surcharge…but what do I know I’m just a silly consumer (who luckily doesn’t live in NY)
I live in NY and there are so many gas stations if I saw prices like these I’d go to another one. There’s no shortage of places to fill up here.
I don’t imagine this place staying open for very long, they are just making it harder for ppl to want to patron them.
In theory, I don’t have a problem with this. However, as someone else pointed out, $20/transaction (assuming most people put in 10+ gallons) or a 50% markup is probably about 10-25 times or more of the processing fee paid by the station. It stinks of trying to confuse the customer into paying more, like that restaurant whose “specials” were 10x or more the price of a regular entree.
There is a chain here called Freestate that usually has the lowest prices in the area. They ONLY take cash. They have signs up all over, but everyone who is not a tourist already knows. That’s a more honest way for the station to avoid credit card fees AND be more competitive.
I used to work for a merchant services company. This isn’t “illegal” but does violate the Visa and Mastercard member agreement.
You can go here to report it: https://usa.visa.com/checkoutfees/contact.jsp
If there are enough reports, Visa may yank their ability to take credit cards.
Dodd-Frank trumps all merchant agreements.
This is 100% allowed by federal law, as well as voiding the “no minimum purchase” requirements that were part of the merchant agreement.
Posting a cash price/credit price does not meet even Visa’s standards for a complaint. It has to be a payment surcharge or a credit card surcharge. Dodd-Frank explicitly gives merchants the right to offer an incentive for not paying with a credit card.
And living where this is taking place, I simply avoid those stations like the plague. If they want to drive my business away by charging me an extra 2 dollars a gallon, I’m more than happy to give my business to stations that charge the SAME rate for Cash or Credit (which is still cheaper than any of the surrounding gas stations). Funny how that place gets the most business and the joker charging 6 bucks a gallon is empty.
It is stupid to argue that the fees=$2 a gallon.
It would make sense to argue that pay at the pump is hurting their in-store sales, but then again they could always turn off pay at the pump to force customers into their store.
You could also argue that using credit while paying at the pump is much cheaper for the store as they dont need to pay any employees to do anything so really the discount should be for credit, not cash.
I like your rationale – to increase in store purchases. I’d add ATM fees to that also as most people these days don’t carry around $50-$80 cash for gas money.
Screw it, I’m buying my gas over the internet.
You have to wait for the USB 4.2 interface.
Can we adapt a 3D printer to print gas?
Can we adapt a 3D printer to print gas?
Just don’t order through Amazon, or you might be liable for the sales tax…
I work in the area where all these gas stations are doing this. Last week they had a super sale, several gas stations dropped their price to $3.59, way below the local average. A BP gas station was packed, but I wonder how many customers did not notice that it was $2-$2.50 more for credit before starting to pump. Next day all the gas stations went back to $3.99. Wonder if planned or each stations keeps an eye on each other.
The people on Long Island need to organize a flash mob of these places – everyone purchases ONE CENT worth of gas each (using their credit card.) The actual credit card fees often have a minimum charge; I think it was 30 cents per transaction?
The real coup would be to have people stop in, pay for their penn(y/ies) of gas, exit the gas station, then go right back in the entrance and do it again. Like being an absolute shitheel of a gas station operator, it’s perfectly legal, so really they should have zero problem with it, right?
Name and shame these companies!
This might be one of the few instances where the free market can decide, provided that this practice doesn’t get adopted by all gas stations.
Absolutely no way that credit card processing fees are anything *close* to $2/gal. I seem to recall them being something like $0.30-0.40 + 2-3% of the transaction.
I had a conversation with the guy owns runs the gas & service station where get my car fixed. He explained to me that people don’t realize that the agreements that station owners sign with the gasoline companies can mean that they LOSE money with every gallon they sell.
Those agreements usually mandate a specific markup AMOUNT, not percentage. When gas was under a dollar/gallon, that made sense. Now that it’s above $4/gal, it doesn’t. When you are only allowed 10cts/gallon markup (I made that figure up, so don’t quote it as accurate), your net is only a small percentage of your sales. But on the reverse side, many of your expenses are based on PERCENTAGE of sales. These can include franchise fees, taxes, etc. Those fees go up when the price of gas goes up, but your revenue remains constant. Pretty soon, you can end up losing money on every gallon of gas you sell.
Hmmmpf. Maybe I explained that poorly. It was a while back. Some gas station owner needs to weigh in.
What’s interesting to me is the way the sign is laid out. Normally around here, it will have Cash Price (regular gas) on top and Credit Price (regular gas) underneath. Then in the next column, it will have Cash Price (premium gas) and Credit Price (premium gas) underneath that. THIS sign has all the Cash Prices on the top row and the Credit Prices on the bottom row. If I looked at this sign quickly I would think the $4.09/$4.19 column was Cash/Credit for regular, and the $6.09/$6.19 column was the Cash/Credit for premium. That is VERY sneaky…
I found this out yesterday: You can buy gas gift cards at the grocery store and when you use them at the gas station you get the cash price.
Where I live its only a 5 cent difference, but I would do it for sure if it was this outrageous. It is also good if have a rewards credit card and want those precious points.
I’m not going to say the gas stations can’t do this, because they have every right to do so.
With that said, I would never pay $2 more a gallon. I would find another station.
Electric car, bitches!
Just let the local tax office start auditing these stations. That’s what I used to do before I retired – the second time. There were quite a few cash-only businesses in the county. I found that those, plus businesses that discouraged credit cards were usually skimming on their taxes. much easier to hide cash, you see, than credit card transactions. Fines were levied; businesses were shuttered; owners went to jail.
People are really incensed about having to walk a few feet to inside the gas station and pay?
Maybe it’s because I’m a cash-only Luddite, but I really don’t see what the big deal is.
Depending on the time of day, that’s easily a 10-15 minute ordeal. Get stuck behind the guys buying their beer, cigs and lottery tickets once they get off. Big fun. Especially when I have no intent on buying a single item in the store, including their $3 potato chips and $5 gallons of milk.
Wowza. I don’t generally have a problem with that, as long as there are big signs everywhere, on the pump, on the sign, everywhere disclosing the $2 mark up for credit. The problem is that the price advertised is cash price in some place and then you don’t see the actual price, for credit or debit, until you swipe your card and start pumping. That could be a real problem.
They are committing at minimum a moral fraud in reality since the charge for credit cards isn’t just for the discount fees since it obviously is for extra profit.
I am a merchant & I don’t charge extra for cards although I don’t give any breaks for cards either but I have noticed a trend of businesses starting to charge for cards based on discount fees supposedly although it is usually much more than the actual cost of associated with accepting the card.
Case in point the Marina we keep our boat at now wants 5% for accepting a card for marina charge. This is higher than even a Non Qualified Discount rate which means they will not only not have an expense for cards but will actually make a profit of the cards accepted.
This type of charge is the same as the companies just adding on another hidden profitable charge IMO & is against most Merchant agreements although the cash price on fuel has always skirted the rules.
When you combine this great idea with the state income tax in New York, things should be better there in no time! Hello good times!
Cash is king when it comes to negotiating. Cut out the the middle man (Visa/MC) and we all win.
Considering the fee is usually actually only a few cents *per transaction*, and these stations are charging a couple of dollars *per gallon*, I’d say it should be quite obvious that it’s pure for-profit price gouging. I’m sorry, but it doesn’t cost that station $20 for a 10-gallon credit card purchase.
@ Angry K9: If the Weights and Measures divsion of Suffolk County, NY won’t do anything (and I’m under the firm belief they can’t, unless the stations were dispensing less gasoline than advertised – sort of an analogue to the Grocery Shrink Ray), a nice, well-publicized visit from the credit card companies yanking their ability to charge AND the IRS for all-cash games might bring that $2 per gallon “pure for-profit price gouging” down fairly damn quick.
In Suffolk County, MA, credit price is about 6 cents per gallon more than cash; Martha’s Vineyard and Nantucket have the most expensive gas in the state ($4.25-$4.50 is the norm now), but even they don’t actively seek to outright chisel the credit card companies.
Maybe these gas stations are just anti-1% ? Keeping the big banks out of the loop?
Then they should just refuse to accept credit cards all together. I can’t see how this is anything but an attempt to defraud customers, who might not notice the increased price of gas until the gas is already in the car and it’s too late.
F these guys. there are 78234798234327 gas stations on long island.
When I was getting gas in pennsville, the stations are all doing this. One station was charging $.10 a gallon for regular, which I thought was a bit high. There is no discount being given, gas station owners have found another way to charge a fee that no other merchant can. Gas is expensive another without gas merchants skimming more from us.