Why Are Gas Stations Charging More For Credit Card Purchases?

Yechial wants to know why his Chase BP Visa card, which offers 5% rebates on gas purchases, costs him more to use at BP stations than if he pays with cash. He asked a BP station owner in Pennsylvania about this and the station owner told him it was because credit transaction fees had gone up—”When I told him that I would report his station to BP and to Chase Bank, he said, ‘Screw you! I don’t care, report me. They are the ones charging us more money for the transactions.'”

Now Yechial wants to know, are BP stations simply charging more to negate the 5% rebate on the Chase BP card, or are they really dealing with higher fees on their end? This L.A. Times article published last week says it’s the second reason—which means any rebate your credit card promises you on gas purchases is going to be inherently less valuable so long as expenses keep rising for station owners.

From the L.A. Times article:

Gas retailers are being hurt by several forces, including lower sales, higher credit card fees and fuel expenses, that are directly tied to this year’s dramatic rise in the price of oil.

In Van der Valk’s case, fuel sales have fallen as much as 10% as customers cut back on driving. The lost volume means fewer customers flow through the convenience store to buy coffee, sodas and other money-making items.

With each price increase, more people use credit cards to buy gas, taking a bigger bite out of station profits. A dealer typically pays a 10-cent transaction fee plus 2% to 2.5% of the total fuel sale for each customer.

Yechial writes, “I have told my wife to no longer use BP gas stations, and we are canceling the BP credit card.” It’s probably not the station owner’s fault he’s having to charge more, but we agree that if the only reason you got the BP card was for the gas purchase rebate, you got a bum deal. (But so did the station owner.)

“Soaring costs are squeezing gas station owners too” [Los Angeles Times]
(Photo: Yogi)


Edit Your Comment

  1. Dobernala says:

    If you are being charged more than what the price is advertised that is fraud. Issue a chargeback.

  2. Report it to the BBB or the credit card company. You are not allowed to charge more for using a credit card or to charge a fee. You are allowed to give a discount for using cash but never a surcharge for using a card.

    It was part of my credit card agreement when I ran a business and some states have laws against it.

  3. thesabre says:

    It doesn’t matter if the station is getting hit with higher fees and is trying to offset them. That is against their merchant agreement with Visa and they should be reported immediately. It is a violation of Page 10 of the Visa agreement (No Surcharging).

    FWIW, it is also a violation of the MasterCard agreement (Section 5.9, Prohibited Practices).

  4. ffmariners says:

    @The Rude Bellman: @thesabre: They post both prices usually… a credit price and a cash price. So you get a cash discount.

  5. supercereal says:

    @The Rude Bellman: You are allowed to give a discount for using cash but never a surcharge for using a card.

    How are these any different?

    Don’t like a credit surcharge? Ask them to magically change the credit price to the standard price, now giving a discount for using cash.

    FWIW, I can’t remember the last time I saw a gas station that DIDN’T do this…

  6. Silversmok3 says:

    This article reinforces that fact that while gas stations are taking your money, they definitely aren’t keeping any of it.

    The real question is: are the merchant fees for AMEX/VISA/MC raised on everything sold-or just gasoline?

  7. There are specific rules against charging a surcharge above the cash price. That said, there are also exceptions to those rule, but those exceptions are not going to be met by a BP station using BP cards.

    Report the sonofbytch.

  8. @Silversmok3:

    The CC fees are equal across the board.

  9. JennQPublic says:

    I live in the SF Bay Area, and I don’t think I’ve ever seen a gas station give a discount for cash. Is this an east coast or mid-west thing?

  10. Carencey says:

    The submitter seems to be under the impression that the station actually could be charging more for the BP Visa, as opposed to other credit cards. I don’t think that’s possible, right? And it wouldn’t be necessary, as the rebate comes from the sponsor or Visa, not the gas station.

  11. @Silversmok3: The difference is that in the “discount” scenario, the higher price will always be the price you see on the big sign by the highway. That way, when you get to the station, the little sign taped to the gas pump telling you about the cash discount is a potentially pleasant surprise.

    More importantly, if you let stations advertise pre-surcharge prices, it’s harder for consumers to compare the prices of two stations. (Very few people are going to drive into every station at an intersection to compare surcharges.) A dishonest station can make itself look less expensive than the honest competition by lowering the base price and raising the surcharge, and profit off customer naiveté.

    So, yeah, it sounds like semantics, but there really is some sound thinking about consumer-protection. A pre-discount price is harder to manipulate than a pre-surcharge price, especially in a market where the competitors often have gigantic signs across the street from each other.

  12. Concerned_Citizen says:

    As more and more people are using credit cards for everything, the government needs to step in and protect stores(which also helps the consumer). They need to mandate below 1% fees or a set monthly fee. It really shouldn’t cost more than 30 bucks a month to be able to accept credit cards. And no credit card company deserves 2% of all a merchant’s sales. The fees on credit card purchases are worse than payday loans.

  13. MakGeek says:


    Just started in CT,

    “You are allowed to give a discount for using cash but never a surcharge for using a card.” I love this statement, truly amazing.

  14. freejazz38 says:

    So you know, I have personally reported these things to both Visa and Mastercard. Visa did nothing, and Mastercard didn’t know what I was talking about and told me to contact my bank (Oh yea, like THEY would know) It’s supposedly against their agreements, but they do NOTHING about it. I personally just avoid gas stations who play this game, since I get 5% back using my card at ANY station. So, the idiots lose more by losing my business altogether. The REAL problem is, in this country, we are still blessed with morons who will continue to patronize stations that CLEARLY charge much higher prices for gas when there are OBVIOUS cheaper alternatives out there. It never ceases to amaze me how STUPID people are. I continue to see idiots in stations charging 10 cents more per gallon that stations just down the road from them. WHY isn’t stupidity a crime??????

  15. Jesse says:

    @Michael Bauser:

    When I used to work at a gas station in college and they tried to do the cash/credit pricing, that’s how they presented prices (highest price on the sign).

    However, there is another station up the street from me that does the opposite. The cash price is listed on the sign, but it’s clearly labeled cash price.

    The pricing has been like that for years and so far nothing has changed.

  16. TheDude06 says:

    geez. maybe its time for a consumerist credit card handling guide for merchants?

  17. azntg says:

    @Concerned_Citizen: That I agree with. It’ll be one of the few times I will side with the merchant.

    The credit card companies here in the United States have it made, due to fairly lax regulations and the lack of capped interchange fees that they face in other countries.

    I do realize that the margins for credit card processing and equipments can be high enough to eat a significant portion of profits, especially for small businesses.

    Personally, I don’t mind if the credit card reward programs gets downgraded as a result or the interest rates rise somewhat as a result (since I always PIF).

    I hope that the credit companies will wise up and do their part in due time. Otherwise, I think it’ll be inevitable that the free market or the government will intervene.

  18. Jayski says:

    I can somewhat understand the Stations charging more for credit transactions, although ti blows as that means you better be carrying 100 bucks in cash each time you want to fill up…
    BUT! WHY are stations charging you for the CREDIT PRICE if you are using your card and entering your PIN NUMBER making it a DEBIT Purchase, which if I recall, the stores do not pay the credit transaction fee for, the bank does….?
    Can anyone clarify?

  19. Jubilance22 says:

    Here in FL I see stations that advertise a price with the phase “Cash or Store CC”. Someone explained to me that the station was allowed to charge more if someone used a credit card that wasn’t affiliated with the gas station. I don’t know how legal or illegal it is, but it seems to be prevalent in Central Florida.

  20. thesabre says:

    @freejazz38: If you take a look at the Visa customer agreement, it says all reports must be made to the issuing bank, not Visa. So it’s no surprise that they didn’t do anything about it.

    For Mastercard, there is a specific process to report companies. I don’t know who you called or in what department they were working, but I’ve reported merchants that mandate a minimum purchase fee, and I have seen those merchants remove the fees. Sometimes they don’t, so I report them again. But if you’re reporting a merchant to MC, you must use [www.mastercard.com]

  21. liquisoft says:

    There is a Shell station in Huntington Beach on the corner of Brookhurst and Adams. It has signs that read “Cash Discount.”
    Essentially, they charge you less money if you pay in cash. Conversely, you could deduce that they charge you more if you use a credit card. Needless to say, I don’t buy gas there.

  22. radiochief says:

    @Jayski: Because some payment systems can only use debit cards as credit card transactions. Which means, the higher price and also possible; a hold on your money which may take 3 to 7 days to release.

    I can’t stand stations who do this. I’d rather it be called a “cash discount” than a “credit surcharge”. I hate driving into a station that has a low price, and then find out it’s for cash. So sorry, I may be on fumes but I’ll just a block or two down the road.

  23. humphrmi says:

    Here in Skokie IL, I just saved $0.27 / gal the other day by paying cash at a nearby Marathon station. There was a long line of people around the gas station, people who were also willing to pay cash for under-$4/gal gas. I think regardless of the laws and the agreements with the credit card companies, if consumers are willing to do business this way then that’s how business will be done.

  24. OwenCatherwood says:

    @JennQPublic: Also a Pacific Northwest thing; The Shell in Oregon where I used to fill up had a cash price and a separate credit price posted

  25. jdlyga says:

    Gas stations used to charge more for credit cards than cash back in the early 90s. You’ll run into a gas station every once in a while that still does this. Nothing out of the ordinary, just uncommon.

  26. JennQPublic says:

    @jon_smoltz: Also, around here the cheap gas stations (Arco) frequently have long lines, and it’s not worth the aggravation of waiting (remember that doctor with his tire iron?). I try and hit the cheap station during slow times, or just pay the extra. Otherwise I’ll end up paying for it in ulcer medication!

    @OwenCatherwood: I just drove through Oregon last month, and I never noticed. I did, however, notice that if you reach for the pump in Oregon a man will come running at you screeching “You can’t do that!!!” Your state is weird. :-)

  27. MFfan310 says:

    There was a Marathon station here in Fort Wayne, IN that started offering a cash discount (but charged the same price as everyone else), then quit accepting credit cards altogether (again, same price as everyone else). Guess what? It’s now closed.

    On a different note, Murphy Oil USA gas stations stopped accepting AMEX because of the higher transaction fees (2.7-3% per transactions, as opposed to 2% average for Visa/MasterCard transactions and slightly less than that for Discover Network transactions). They still accept Visa/MC/Discover, though, and their stations at Wal-Marts now offer a 7 cent/gallon discount if you pay with a Wal-Mart credit card, Wal-Mart Discover or a Wal-Mart gift/reloadable shopping card.

    Maybe gas stations should quit accepting AMEX and only accept Visa/MC/Discover instead of pushing people toward cash discounts… 1% times 15% of their purchase volume is a lot of money for a gas station.

  28. @freejazz38: If a station is charging 10¢/gallon more than its neighbors, that’s probably because it’s wholesale price is 10¢/gallon more.

    Wholesale gas pricing is strange. Oil companies group stations into “zones” which don’t necessarily match geographic boundaries, and give the zones different wholesale rates. In fact, zone boundaries can be in the middle of the street, which means there can literally be two franchisees across the street from each other, but paying different wholesale rates.

    Back in 2000, The Phoenix New Times suggested that oil companies were manipulating zone pricing to squeeze out franchisees and replace them all with corporate-owned-and-operated stations. They’re presumably regretting that plan now.

  29. xamarshahx says:

    report it!!!!! haha, good luck, so many gas stations are doing this now, the local shell even changed their sign to show a cash and cc price instead of reg, premium, and diesel prices.

  30. WraithSama says:

    I was wondering why the BP station I went to the other day had a prominent sign on each pump stating that they no longer accept BP cards. I thought that was pretty bizarre. I guess this explains it.

    Although, the idea still strikes me as odd that BP stations are refusing to accept BP cards.

  31. mac-phisto says:

    @Concerned_Citizen: yes, please protect me, oh wise government. you’ve been doing such a great job so far. if merchants don’t want to accept credit cards, they have a simple choice: don’t accept them.

    there’s a gas station near my house that’s cash only. he usually has gas 3-5¢ cheaper than anywhere else & guess what – people still go there even though he doesn’t take cards! *GASP*

    but instead, let’s let washington decide what’s “fair” in interchange fees. right.

    @Jayski: you just discovered why they can have a “cash discount”, but not charge more for specifically using credit cards. good old u.s. greenbacks get one price, EVERYTHING ELSE (credit, debit, check, travelers’ cheque, etc.) pays the higher price. period.

    anything else would favor one payment network over another & that’s just not fair.

  32. JeffDrummer says:

    I feel bad for these owners, they are in constant competition, where price wars are common, no one wants their product, they seem to have been abandoned by the oil companies. Margins are low. All I know is that I drive as little as possible (I drive to work, get food, and occasional other things, I barely drive around anymore even though my car gets 36mpg). But I think that it is tacky at best to charge for using credit.

    I remember in Nanton, Alberta, there is a Petro-Canada station that charged $2 to use credit. My rule: you charge me to pay you, I won’t ever have that problem again because I won’t go back. That also applies to those stupid restaurants that have an ATM machine that charges you $3 to get money, plus your non-bank ATM fee. Luckily I work for HSBC therefore I don’t pay non-bank ATM fees.

  33. Grabraham says:

    As gas prices continue to climb, I think we will see more ‘Cash Discounts’ The CC fee the merchant pays is a % of the total sale so as the cost per fill-up goes up the fee goes up. The profit on the gas is usually only about .03-.05 /gallon on the lowest grade so eventually the merchant fee eclipses the profit and the station has to either raise prices further or sell gas at a loss on credit transactions.

  34. balthisar says:

    In the last three to four weeks around here (SE Michigan), I’ve been noticing that B.P. exclusively has been posting (publicly within the rules of the credit card agreements) both cash and credit prices. The result is that I no longer get gas or enter the convenience stores at any B.P. The other stations still have competitive prices, and don’t do any of the stupid mumbo-jumbo with credit cards.

    I’m sorry if you can’t make a buck being a gas station franchisee, but costs are going up for everyone, and we’ve all got to deal with it. I’m not going to feel sorry for gas station owners that try to deal out this kind of crap.

  35. trademarked67 says:

    @MFfan310They still accept Visa/MC/Discover, though, and their stations at Wal-Marts now offer a 7 cent/gallon discount if you pay with a Wal-Mart credit card, Wal-Mart Discover or a Wal-Mart gift/reloadable shopping card.

    I live in Northwest Arkansas, the home of Wal-Mart, and the Murphy Oil stations at the Wal-Marts only offer 3 cents/gallon with the Wal-Mart Cards/Discover/Gift Card.

  36. RChris173 says:

    Ok…this is allowed…but only if lets say the market price of gas is $4.20 per gallon. The station can offer a cash discount by charging $4.10 for a cash payment. If for some reason it decided to charge $4.30 for a credit card payment, then it is a credit card fee…It is difficult to know whether or not it is one way or another unless you compare the prices across the board from one station to many in the market and see if the price is higher or lower for the payment type.

  37. Ihaveasmartpuppy says:

    @balthisar: I feel the same way, and do the same thing. I’m also in SE Michigan, FWIW.

  38. @balthisar: I’m in SE Michigan, too. There’s a Citgo in Trenton that;s been doing cash/credit pricing for over a month now. I usually go there because it’s the cheapest station in town and the one closest to my house (a double-win for me), but the first weekend they did dual-pricing was crazy. People backed up and waiting to get into a five-pump station just to save a nickel a gallon.

    My car has a 12½ gallon tank. The 50¢ I would have saved filling it up wasn’t worth the aggravation of watching all of Trenton’s senior citizens slowly fill up their SUVs, then shuffle over to the cash register, stand in line, and shuffle back to their vehicles. So I went to the giant Marathon down the street, which was dead empty.

    I have not real point to this story, do I? Oh yeah — people go crazy over 5¢ when they’re driving vehicles that are two damn big. And Trenton has too many old people.

    The station still has dual pricing, but the crowds aren’t so bad now. Maybe the locals have finally realized that it’s not the last nickel that’s really killing them, it’s all the nickels in front of that one.

  39. azntg says:

    To actually add to this discussion (as opposed to my opinion only post made earlier):

    While it ultimately amounts to “adding a surcharge to credit card purchases,” without explicitly doing so, cash discounts are allowed and does not violate any part of the credit card acceptance agreement.

    As of explicit surcharges for credit card purchases, it depends on your state, as a federal law provision prohibiting has expired some time ago.

    In my state (New York), surcharges for credit card purchases are illegal under N.Y. Gen. Bus. Law § 518, which states that:

    “No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.

    Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.”

  40. bcsus83 says:

    Most gas stations around here offer a ‘discount’ for paying w/ cash.

    I can attest, though, that credit card companies are charging businesses a small fortune now days to run a credit card. We just closed our store, but we were being hit w/ fee of 4-7% of the total transaction, depending on the card, every time we accepted a credit card.

  41. drjayphd says:

    @ffmariners: In practice, as far as I’ve seen, the stations have just been jacking up the prices they were already charging for card users. Kinda hard to say, straight-faced, that you can save $.20/gallon by paying cash when the credit card price is about $.16/gallon more than other stations charge for credit card users.

  42. drjayphd says:

    @MakGeek: Oddly enough, I’ve been noticing Hess stations in CT doing this for a few weeks now, way before this article… hmm.

  43. Blackneto says:

    i actually apologize when I have to use my CC at a small business.
    As a SBO I grit my teeth everytime a customer wants to use a CC. Fortunately most are content to issue a check when I invoice them.

    Since I use the envelope system it’s not usually an issue. but there are times when i’m caught without enough cash and it has to go on the card.

    Last I know this isn’t much but last month I lost 9 dollars because customers that paid with CC’s. If all my customers paid with CC’s it would have been much more.

    I only offer CC payments because I know the finances of some customers are stretched to the limits. And if i didn’t offer the option I would have a problem getting paid.

  44. Jon Mason says:

    @Blackneto: “And if i didn’t offer the option I would have a problem getting paid.” Exactly the reason that although on the surface, CC fees suck for you, they benefit you in the long run – anything that you do that makes things more convenient for your customers is going to bring more of them to you in the long run, hopefully offsetting the transaction fees. I know which I would choose if I had choice between 2 businesses of a similar quality but one insisted on a check when the other let me use my credit card.

    A similar principle can be seen on eBay where people refuse to accept Paypal because of the fees they charge, however the convenience to me means that I (and millions of others) will not bid on any items that don’t take Paypal. To save a couple of percent in fees they are cutting off access to thousands of potential bidders on their items, which would almost certainly result in greater profit for them…

  45. nforcer says:

    This has to be an isolated incident, because I live in the Chicago area which has the highest gas prices on average in the nation (lowest station I last saw in my area was 4.19, yesterday evening), I have the BP Chase Visa, and I get my rebates without paying an extra fee for using the card. In addition, the BP stations in my area have the lowest prices on average before factoring in my rebates.

  46. johnfrombrooklyn says:

    @freejazz38: You sound like the kind of person that drives 50 miles out of your way to save 10 cents a gallon on gas.

  47. johnfrombrooklyn says:

    Credit card companies in this country are a true monopoly that own Congress. If you run a small business in this country, you absolutely must take credit cards (there are a few exceptions such as some restaurants.) And Visa, Mastercard, and Amex keep raising the fees, charges, etc. etc. and merchants have absolutely no recourse. What are you going to do if you’re a small business? Quit taking credit cards? Of course, not. And while Consumerist readers seem to hate the “big boxes”, those are the companies that can negotiate deep discounts from card companies. The small, local-owned stores that everyone seems to love “in theory” are the ones that get pounded by the credit card rates. So if you want to support a local restaurant, store, bar, etc. pay in cash.

  48. jasezero says:

    I’ve been seeing this crop up a lot more in my area of Jersey. First it was just the BP stations, then it was some of the other lower end gas stations.

    The BP’s by me did this quite deceptively, advertising the bigger signs with the cash price and a very very small sign on the highway showing the higher credit prices.

    Now they show both signs in equal size.

    All the gas stations equal the prices of every other gas station that doesn’t charge a difference for using credit card over cash.

    I goto Shell when if I can (it’s a bit further for me) and WaWa for gas because its convenient.

    Honestly, I will stop going to BP as long as keep charging a fee to pay in credit card (espcially 7-9 cents more per gallon). It is a bit ridiculous.

  49. Snarkysnake says:

    Does anybody else find it ironic that gas stations are encouraging cash payments while some cell phone companies charge you more to come in the door and pay with tens and twenties ?

    Just asking…

  50. mac-phisto says:

    @nforcer: …the Chicago area which has the highest gas prices on average in the nation (lowest station I last saw in my area was 4.19, yesterday evening)

    $4.19?!?? the cheapest station in my area is $4.35. & i’m in the “affordable” section of ct. fairfield county is in the $4.45-$4.70 range.

  51. ninjatoddler says:

    A gas station over on OBT in Orlando does the same thing. The advertised rates are for cash only.

  52. JollyJumjuck says:

    Fantastic! So people who are getting wiser to the cost of borrowing and do things like pay off their debts to avoid interest charges get hit indirectly by the “poor” credit card companies. It doesn’t seem to matter what you do; these financial parasites dig deeper into your pocket.

  53. Tijil says:

    @nforcer: Sorry, yesterday evening the “average” price in Western Washington State was over $4.30… Maybe Chicago is no longer the highest prices.

    As to the cash/credit price difference, while I understand the “small business” problem with the excessive card fees, as a handicapped customer, until those small businesses come to ME to take my money instead of sitting smugly 50 feet away in the comfort of their station waiting for me to deliver it to them, I’ll continue paying at the pump with a card.

  54. macMD says:

    I keep all of my receipts and check the gas purchases when the statement arrives. So far I haven’t run into this, but I will be watching. I know its tough on them but its also tough on us, and everyone is to blame.

    The Gov’t for NOT forcing the CAFE #’s up to where they should be, Automakers for not voluntarily upping their fuel economy and us for not carpooling and making better use of our resources.

    Its funny I was standing next to a group of older guys saying how we can get all the oil we need in Alaska. Well here are a few bits of info. First how long before that “mother load of oil” starts flowing, I would haszard a guess YEARS, like many years. Next do you really think the oil will flow down to us because its in Alaska. Duh, uh no, it goes to the highest bidder so that means we don’t get cheaper gas we get higher gas prices.

    Finally there is only one place left in our country that has not been obliterated by our stupidity (yes I own an SUV, yes I carpool to save on gas permanently, yes I live in the country and have crappy winters). Should we destroy that or find ways to be more efficient. I say be more efficient and find better ways to make ethanol and make it a requirement like Brazil did 30 years ago

  55. TwoScoopsRice says:

    Gosh, I thought the cheaper-for-cash pricing structure had gone the way of the gooney bird back in the ’90s. At least for now, that’s one thing Oahu drivers don’t need to worry about. We won’t talk about the way that some stations are upping their prices daily. Biggest jump I saw this week was one of the cheaper stations boosting ppg by 5 cents one day, 8 the next.

    And while we’re at it, anyone else feel that the little 9 hovering after the prices just adds insult to injury? Really, don’t they think we know that $4.42-9/10 is really $4.43?

  56. meske says:

    So – my question is – if the station offers a discount on gas by using cash, are they obligated to offer the same percentage discount on items within the store to keep true to their merchant agreement? This could be fun…

  57. eh, do the math. the Citgo I mostly use charges 5¢ a gallon for credit cards. I get 5% back with my Amex Blue Cash card. that’s 23¢ a gallon back for $4.65 premium (my car requires at least 91 octane). I’m ahead using the card.

    not sure how Amex makes money giving that back as I never carry a balance and there’s no annual fee with that card, but whatevs, I’ll take it.

  58. Spamuel says:

    It could be the fact they’re using a rewards card too. I work in the payments department for a large ecommerce company (>150 million a year on credit cards), and we get reamed when people used “rewards” cards.

    Normal credit cards and debit cards cost us about 1.85%, but anytime someone uses a “rewards” card our rate jumps to 2.0%-3.5%. I bet most gas card sit at an ugly rate, too.

  59. opsomath says:

    I’m really shocked at how many people are coming down in support of the credit card industry here. To me, it’s quite intuitive; using a card costs the business owner, so he has motive to encourage not using a card.

    I already use cash for groceries and entertainment portions of my budget. If cash discounts become prevalent enough that I can count on finding one, I will probably begin extracting my gas budget in cash too and using it instead.

    Cash is great. Not only is it more convenient (for most things besides gas), no one can track your spending habits or ask you for ID.

  60. vietkangta says:

    The gas station at my house on the big signs advertise the regular prices, but once you pull up to the actual pump, there is a note that says you will pay an extra fee for using credit/debit card. From then on, i never stopped by that gas station anymore. It is probably the most expensive station in my city.

  61. hahnchen says:

    @opsomath:I was thinking exactly the same thing. I’ve worked in small businesses, and credit card transactions cost.

    There are free cash machines everywhere in the UK, use them.

  62. boomerang86 says:

    Credit card processing banks have merchants by the cajones, and if you’ve ever seen a statement from one of the processors you’d shake your head.

    Besides the cumpulsory transaction fee and discount rate that MC/Visa/AmEx/Novus get, there are also “network communication” fees, account statement fees, settlement fees, etc. etc.

    On top of that, there are ADDITIONAL fees or discount rates whenever a business or corporate purchase card is used, and a plethora of discount rates for every level of “rewards” card out there. Use an AmEx Blue Cash card and you might as well be a$$ripping the merchant, they are probably losing money on your gas fillup.

  63. SadSam says:

    Yesterday when I filled up at my local BP gas station I noticed, for the first time, that they were advertising a .05 discount if you paid cash or paid with a BP gas card or BP credit card. I paid the same way I normally do at the pump with my Visa debit card (no PIN number). I doubt that I would go out of my way to pay cash to save .65 since I would need to go get cash and go inside to pay (which likely would lead me to buying soda or beer or some yummy snack which would quickly negate my .65 savings).

  64. JustThatGuy3 says:


    Cash is so much less convenient for tracking spending than a credit card. With a credit card, I have every transaction there in front of me in Microsoft Money.

  65. vonpookie says:

    This is standard procedure for most of the truck stops around here, I believe. I’ve never seen it anywhere but truck stops, and it’s only on diesel. It’s also flat-out advertised on the sign where it switches back and forth between the two prices.

  66. theysaidwhat says:

    I thought it was illegal to charge more for credit than for cash purchases?

  67. digitalgimpus says:

    @theysaidwhat: Your putting some spin on that. They aren’t charging MORE for credit purchases. They are just charging LESS for cash. There is a difference. There isn’t an added charge for using a credit card.

    In other words, if you allow the gas station to save the expense of credit card processing (which also takes more time btw which raises payroll costs), they will split the savings with you.

    Perfectly acceptable.

    I don’t see why people have a problem with this.

    Think of it this way:

    DISCOUNTS ON GAS. Use cash, and save.

    With gas prices so high, you’d think more people would be into saving some money. These days 1% savings can actually add up.

  68. opsomath says:

    @JustThatGuy3: I know what you’re saying, but personally I found I’m actually more likely to go over budget in a certain area if I use a credit card. Being able to review it afterwards doesn’t get me the money back. I’d rather portion out cash in advance than try to retroactively “keep track.”

    Plus, cash doesn’t try to charge me fees or delay applying payments so they can hit me with interest. I am following my New Year’s resolution to minimize dealing with companies whose business model revolves around sitting around waiting for me to screw up.

  69. GodzillaDad says:

    For all of you saying “report them, it’s illegal, etc.!” its 100% LEGAL.

    Back a few years ago I worked for a finance company, there’s a loophole in the laws for this called Regulation Z (or something similiarly stupid, like I said its been a few years). Basically if the merchant says the Cash price is a discounted price, they are NOT breaking the law.

    In this case because it sounds like the merchant said he was charging more because he was being charged more (and therefor passing on the cost to him to the customer) yes, by all means report him he’s violating the law. But as long as places say its a discount (which most any place which hires a good lawyer will argue thats what it in fact is, and that the employee was simply unaware of this and explained it wrong to the customer) they will get away with this crap until the loophole is closed.

  70. Erwos says:

    My AMEX Blue card gives me 1.5% or more back on gas purchases. If a gas station won’t take it, I’m not going to that gas station, easy as that.

    I have no objections to stations accepting only cash and giving a discount because of it, but I simply don’t carry more than $40 of cash on me 99% of the time. Those kinds of deals just aren’t options.

  71. RINO-Marty says:

    @The Rude Bellman: Discount for cash = surcharge for credit card. They’re the exact same thing.

  72. Wormfather says:

    @MakGeek: OK, this is a first, I’m ashamed to live in CT, I can put up with the high property taxes, the fact that most our taxes are tops in the nation, but this is stupid.

    legelative types need to keep their butts out of commerce. Credit card fees are part of the “cost of doing buisness”. You’ve got to factor it in into your prices.

    Now, as far as rewards cards go, it’s true the merchants shoulder that load but still, it’s the cost of doing buisness.

  73. Wormfather says:

    @Jayski: There is an interchange for debit but it is substancially lower, something like $0.25 and .012 per transaction.

    But that brings up a good point, not all cards are equal, so there should be a bank card discount and a non-rewards discount, etc.

  74. Starfury says:

    ARCO stations in the SF Bay Area charge you to use your ATM card. They don’t take CC either. Even with the fee they used to be cheaper than the other stations but now all the stations are right around $4.50/gallon.

  75. savvy999 says:

    Just do the math. If the card you’re using gives you more cash back than the “rebate” of using cash, then use the card.

    Discover is 1%… 1% of $4 a gallon gas is… 4 cents per gallon!

    If you have a different card with a better rate, or gas is more than $4, adjust accordingly.

    But when you work it out, for me, using a Discover card means I’ll ‘lose’ 1 penny per gallon paying by credit card. I only fill up my sedan about twice a month, tank holds 13 gallons.

    So I’m going to fumble around, trying to get/keep $100+ in cash (probably incurring an ATM fee in the process) to save 13 cents per fillup, or 26 cents a month?

    Do the math for yourself, see if it’s worth it. For me, it’s not.

  76. barty says:

    @Tijil: Maybe they need to bring back those little booths that were positioned between the pumps that had someone you could pay without having to walk into the station. This might help discourage some drive-offs at stations that don’t make you guess (pay) before you pump. As long as they don’t sell lottery tickets at the booth it would make paying cash more convenient again.

    I guess most of you folks have a really short memory about the whole “cash discount” bit at gas stations. 20 years ago, it was hard to find a gas station that DIDN’T have a separate price for cash and credit. I’m sure alot of these laws that sucked up to the CC companies are probably why alot of the dual pricing went away. Lord forbid a business owner try to recoup the extra cost of using what is a convenience form of payment.

  77. freejazz38 says:

    @thesabre: The problem is, when you call tghe bank (Chase, for example) They have no idea what the hell you’re talking about. They think you are looking to dispute a charge. It is VISA’S rule, not Chase’s, and THEY should be regulating it. As I said, I reported several stations, MONTHS ago, and they are still doing the same thing. My guess is the reports went into the circular file

  78. freejazz38 says:

    @johnfrombrooklyn: you sound like the kind of person that regularly has someone else’s wang in your mouth. If you READ (I realize that’s expecting a lot from an uneducated twit) what I wrote, I said that the cheaper stations ARE RIGHT THERE. BEFORE AND AFTER the more expensive ones. And I’m sure pea-brains like YOU are sitting in the more expensive ones because you’re TOO stupid to read the sign. And you also just pay your bills without lookint at them, and you probably have 2 AOL accounts too. YOU are a corporate scumbag’s wet dream, and the reason everyone else pays more.

  79. henrygates says:

    Is there any reason why the merchant can’t put it on the receipt? “Using your credit card made this purchase $3.12 more expensive!”

  80. theysaidwhat says:

    @barty:It’s not ‘a convenience form of payment’. It’s a smart form of payment. I use my debit card for darned near anything and everything. It’s safe, I get points, and if it is lost or stolen, I can make it unusable in about 30 seconds. Unlike cash, which is simply gone if it’s stolen…

  81. quail says:

    Doesn’t anyone remember Exxon in the 80’s and into the 90’s offering a cash price for pumping gas? They no longer do it, at the stations I frequent anyway. They now have a discount if you purchase a car wash with your fill-up.

  82. EasttoMidwest says:


    One piece that’s missing in all of this is the interchange fees set by Visa and MC is actually an issue of price fixing and anti-trust. There are many many antitrust cases going through courts throughout the world on this very issue, and there have been settlements, etc. Interchange rules were changed in Australia a few years ago, actually.

    I happen to know a lot of straight up free marketeer economists (like, literally studied under and still revere Friedman) who are running analyses and testifying unequivocally on the side of merchants.

    It’s exactly because merchants will usually lose volume by not accepting credit cards that this is price fixing. I… could get into the whole structure of the four party payment systems, but I’m not sure how necessary it is. A lot of it has to do with how payments flow through “members” of Visa and MasterCard and then the rules which are set. Interchange fees are supposed to go back into rewards programs (which may or may not be true), but their very existence raises prices on goods for both those who use plastic and those who use cash. The interchange becomes a cost of doing business which has to be accounted into price, just like fuel does.

    And any merchant can tell you that there is no actual choice between Visa and MC. A lot of merchants don’t take AmEx because they have higher fees — that’s a reasonable and effective market decision. Some people don’t take Discover, etc., because the market penetration is too low, so it makes no sense on a volume level. But in antitrust terms, Visa nd MC control the market and pricing structures to such an extent that there is no market. They dictate the interhcnage fee.

    The fact that they’re doing this to gas stations at such an exceptionally high rate is really telling. They’re running the risk of alienating both users and merchants, but they must really want a piece of those sky rocketing gas prices. I wouldn’t go so far as to say that it’s parasitic gauging, but it may be.

  83. Eels says:

    One of the gas stations around here had this handwritten sign at the register that said something like “credit accepted, cash preferred. if you must use plastic, use debit.” There was something else about them having to raise prices the more people used credit cards…it was really strange.

  84. @nforcer: “Highest prices in the nation.” Pish tosh.

    $4.499 is a great deal on regular where I live (Greater San Francisco). Costco is maybe $4.439.

    Bow to the price gouging masters.

  85. Morac says:


    Discover has a 5% cashback bonus for gas from July to September, but you have to sign up for it on their web site. You can do so now.

    The station I usually use was the last one in the area to switch to the separate credit/cash pricing. Last I checked, cash was 3.93 and credit was 4.07. At 5% back it would be worth it to use a credit card.

    As for the legality of separate cash/credit pricing. There used to be separate pricing many years ago (I’m talking at least 25). At some point gas stations switched to using the same price and just ate the few cents they lost per gallon due to credit card fees. Many tried to make it up by opening convenience stores, service stations or (in my area) a Subway restaurant. With gas getting more and more expensive and station owners only making a few cents per gallon as it is, all their profits were being wiped out by credit card fees.

    Another problem in my area (NJ) is that it is illegal for gas stations to sell gas for less than they paid for it, which means they can’t offer “sales” or “discounts”. So stations whose main profit doesn’t even come from gas, can’t lower their prices.

    In the end the main problem is the oil companies who take the lion share of the profits from gas. Both the customers and the gas station owners get screwed. This is why ExxonMobile is selling off 20% of their gas stations to 3rd parties, because stations are not profitable.

  86. NoWin says:

    @boomerang86: “Credit card processing banks have merchants by the cajones, and if you’ve ever seen a statement from one of the processors you’d shake your head.” A big +1 to you.

    Don’t dump on your local gas-station owner. He’s working on the same margin – lets say .10 per gallon. “Some” of the franchise, network and bank processing fees are based on “% of sale” NOT “% of that 10 cents”, so when the sale is $42.00 vs $22.00, he’s getting nicked MORE out of his measly profit to cover the V/MC and card fees.

    Dump on Congress and the oil companies, but not your local gas jock, please.

  87. vagranted says:

    @Michael Bauser:

    I live in Woodhaven and I ended up getting that promotional .99/gallon gas for up to 12 gallons last week. I had gotten there early enough that I had to deal with maybe a 15 minute wait. It was cash-only, but that’s because it was some thing for a country station.

    But, if you go down Dix-Toledo in Lincoln Park, you’ll see all the Cash/Credit gas stations. My boyfriend lives in the area and I was amazed to see that. Now, wherever you go, you see the Cash/Credit. It bugs me that the difference in cost is usually .08/gal since I carry my debit card instead of cash.

  88. benn09 says:

    I had never heard of gas stations charging more for credit card transactions until I drove from New Jersey to Los Angeles. Given the high price of gas, I had to pay with a credit card, and only went to the stations that did not charge extra.

    What I don’t understand is how gas stations are able to get away with charging more for using a credit card (in violation of their contracts with the credit card companies) while doing is so blatantly — every sign has two different prices! Are they just putting faith in the fact that consumers 1) don’t know anything is wrong with the practice and 2) if they do know it is wrong, won’t do anything about it?

  89. FLConsumer says:

    It seems to vary in Tampa, FL as to if you’ll see the “CASH PRICE” label on a sign or not. Generally see it in the shadier parts of town (across from University Mall / Suitcase City / Ybor) and not much in the better areas (Westshore/Bayshore/etc). I can’t say I’ve ever seen it in Ft. Myers / Naples, FL.

    Re: gas prices, gasbuddytogo.com on your mobile phone will give you the prices in your area. Better to know what the prices are before you finally reach the running-on-fumes and get stuck giving business to a shady station owner.

  90. LUV2CattleCall says:

    Fine…if a gas station wants to keep $10,000 of cash around ($50 x 200 cars), let them. Just don’t cry to me when robberies soar through the roof.

  91. Parapraxis says:


    The Shell station on the corner of Brookhurst and Talbert offers a cash discount, AND if you use your Citibank Shell Mastercard, you can get not only the cash discount price, but the 5% rebate later on in your monthly statement.

    try that place instead…

  92. geoffhazel says:

    -> Yechial writes, “I have told my wife to no longer use BP gas stations, and we are canceling the BP credit card.”

    Unless he has an annual fee on the BP card, he’ll have a higher FICO score if he just puts it in a drawer than if he cancels it. In fact, he ought to ask for a credit line increase every year.

    The longer he has the card, the more it’s worth, FICO-wise.

  93. Lucky225 says:

    This is against the Visa/MC merchant agreement, AND against the law in Texas(fee/charge for using Credit Card) — Unless they word it as a “cash discount” which can be dis-proven if paying by check is the same price as cash, but then again I suppose they could have a Check Discount that happens to be at the same rate as that of the Cash Discount. But it’s so simple to prove when it ONLY applies to gasoline and not other things in the store such as sodas.

  94. FromThisSoil says:

    Awesome word play – “cash discount” and “credit card surcharge” sound about the same to me.

    I encountered this price scheme earlier this week at a local station when I went to fill up. The price was $4.15 on the sign, but when I got to the pump it said it was $4.21. Then I saw the sign – you guessed it, “cash discount.” I was a little peeved about it, but filled up using my Visa branded debit card anyway.

    The only one this will be hurting will be the credit card companies, because people will start using cash more often. More cash, means less fees, means less money. If the credit card companies don’t close their “cash discount” loophole, you’ll start to see fees and interest rates start going up before your eyes.