Wednesday, July 9, 2008

Pay at the Pump? You May be Paying More for Gas

Pay-at-the-pump gas stations have made my life so much easier. I can swipe my debit card and fill up my car without having to go inside the store. That's definitely a plus when you have little ones, especially those who have to ride in car seats.

But those of us who take advantage of this convenience may be paying more for gas, as a recent report from ABC News reveals.

Some gas stations are charging more per gallon when customers pay for gas with a credit or debit card to offset the credit card processing fees. (Visa charges a 2 percent fee on every credit or check card purchase.) Some service stations disclose the credit/debit price hike with signs at the pump, but others don't. And that's deceptive.

I guess I can understand why some small mom-and-pop gas stations might charge more for credit or debit card purchases to preserve their profit margins. But I don't know of any other retailer who charges more when customers pay with a card instead of cash or a check. I personally think that credit card fees ought to just be treated as a "cost of doing business," light a ultility bill, employee salaries, etc.

When stores accept credit and debit cards, that certainly makes buying more convenient for customers. But I'd bet that for most merchants, credit/debit card acceptance is also a revenue stream. People are much more likely to buy and to buy more if they can pay with a card. So merchants who accept cards pocket more profits than those who don't.

The ABC News investigation discovered that some gas stations in New York were charging 7 cents to 50 cents more per gallon to credit and debit card customer. The 7-cent difference seems justified, given Visa's processing fee. But those service stations charging 50 cents more a gallon are profiting from deceiving their customers. And that's wrong.

The next time you swipe your card at the pump, check your receipt to make sure you haven't been charged more than the advertised price for gasoline. If the figures don't match and there were no signs indicating the price difference, make a fuss and request a rebate. If the station refuses your request, report them to the state agency that regulates gas stations. In North Carolina, that's the N.C. Department of Agriculture.

If you're worried about how you're going to pay for gas if prices keep rising, you might consider stockpiling gas. (Don't worry, though, you don't actually have to stockpile the fuel and risk setting your house on fire.) A new company called MyGallons lets consumers buy prepay for gas at the current price and fill up whenever they need fuel using prepaid cards. The company charges an annual fee of $29.95 -- an investment you'd recoup after buying 60 gallons of gas at a 50 cent per gallon savings.

We haven't signed up for MyGallons yet, but it's definitely an idea worth considering because I believe fuel prices are going to increase more before they stabilize.

1 comment:

  1. Interesting post! I was not aware of, what a fantastic idea. Gotta love capitalism!

    There is a gas station in my town that only accepts cash or debit card. They are priced quite a bit lower than other stations since they don't have to pay CC fees. The consumer has to pay the debit card fee though, which for my bank is 75 cents I believe. Way worth it though.

    Great blog you have here. Also, thanks for coming by my blog and leaving a comment!