Credit card fees: Some gas stations say 'no more' Wed Jun 18, 1:28 PM ET CHARLESTON, W.Va. - When gas station manager Roger Randolph realized it was costing him money each time someone filled up with $4-a-gallon gas, he hung a sign on his pumps: "No more credit cards."
He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.
"The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."
His complaints target the so-called interchange fee — a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed — usually at just under 2 percent — but the dollar amount of the fee rises with the price of the goods or services.
As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.
In a good month, Randolph's small operation would yield a $60 profit on gasoline sales. But that's been buried as soaring prices forced the station to pay about $500 a month in interchange fees.
"At these prices, people aren't making any money," said Jeff Lenard, spokesman for the Alexandria, Va.-based National Association of Convenience Stores. "It's brutal."
Lenard's group reports convenience stores paid roughly $7.6 billion in credit card fees last year, while making $3.4 billion in profits.
The way interchange fees are structured has long annoyed retailers, prompting calls for relief.
Legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies.
The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.
"We have always contended that it doesn't cost Visa and MasterCard any more to process a $1,000 transaction than it does a $100 transaction," said J. Craig Shearman, vice president of government affairs at the retail federation.
The credit card companies say fees are just part of the cost of doing business.
MasterCard has capped interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin.
Accepting MasterCard also gives gas stations "increased sales, greater security and convenience, lower labor costs, and speed for their customers at the pump," Gamsin said in an e-mail to The Associated Press.
Visa argues that the fees are offset "by the tangible benefits to stations and their customers, such as the ability to pay at the pump," the company said in a statement to the AP.
Absent congressional action, gas stations are seeking other relief, including discounts to customers who pay in cash.
Shipley Energy, which owns 23 Tom's Convenience stores in Pennsylvania, has partnered with a new credit card company, Revolution, which charges smaller interchange fees.
Bob Astor, wholesale fuels business manager for Shipley, said those savings get passed on to customers as cheaper prices at the pump. Customers who pay with the card get an automatic 10 cent discount.
Gas stations in South Carolina, Georgia, Maryland, New Jersey and Arizona are among those offering cash customers a discount, with savings from four cents to 10 cents per gallon.
The Connecticut General Assembly recently passed legislation to make it easier for stations to offer discounts for cash purchases, bidding to cut consumer prices by 10 to 12 cents on average.
Discounts for cash customers may not, however, be the stations' salvation.
The National Association of Convenience Stores reports about two thirds of transactions at gas stations were with credit or debit cards in 2007, a figure expected to rise this year.
"The problem with cash discounts is, if people don't have the cash or don't want to spend the cash, you've inconvenienced them," Lenard said.
The experiment at Mr. Ed's Chevron, though, has paid off so far.
The station has been in business for 44 years and the ban on plastic hasn't scared many people off, Randolph said.
"We've got generations of customers who come here," he said. "Most of them have accepted it."
I don't think this is really an issue about 'fuel'. I happen to agree that the banking industry is making a killing on credit card transactions. They don't work any harder to process a $1.00 sale than they do to process a $1,000.00 sales. Credit card companies charge a business anywhere from 3-5% of a sale. And that depends on the credit card company, if it's a business credit card, if it is swiped or punched in manally. PLUS a monthly fee.
The businesses have to pass on this cost to their customers. So why not discount them if they pay cash? It's a win/win situation.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
American could solve energy crisis if it decided to apply itself
It’s often said that we need a new Manhattan or Apollo [energy] project to reduce our oil dependence and emissions of greenhouse gases. In fact the technology to do so already exists, it just needs to be implemented on a large scale. The problem is that as a nation, we are ignorant of the solutions and unwilling to pay for them. We need the equivalent of a new Interstate Highway Act, that is the expansion and electrification of the existing railroad network, including new high-speed lines. Urban transit systems need to be greatly expanded. Electric vehicles can utilize a variety of energy sources and are far more efficient than internal combustion engines. We need the equivalent of a new “Great Society,” the redirection of subsidies that enabled suburban sprawl to rebuild central cities and their inner-ring suburbs. This means restoration of decayed infrastructure and public services. This means rebuilding them as mixed-use, pedestrianscaled, transit-oriented communities. We need the equivalent of a new Tennessee Valley Authority to develop renewable energy on a mass scale. This means new nuclear power plants as well as wind farms, geothermal, wave and tidal plants. And, yes, the government should cough up the money and see if a “clean coal” technology or fusion power is actually feasible. Some, like [author] James Howard Kunster, believe that we will soon enter a “dim age” as oil production peaks, because alternative technologies will fail to meet our energy needs. Yet how do we know unless we try? We have already spent close to a trillion dollars in Iraq; imagine if all that money had been spent at home on alternative energy and transport, we might be significantly oil-free already. We will only end up like North Korea, fearful, starving and in the dark, if we do nothing and hope for the best. If America moves to meet the challenge, like it did during the Great Depression and WWII, we can overcome peak oil and climate change. BENJAMIN TURON Ballston Spa
Time to remember kindness — to people and to animals. So now President Bush has forgotten the long term and focuses on the short term by allowing oil workers to annoy/harm polar bears [June 15 Gazette]. Protect the workers, I say! Protect us — stay out of Alaska! God knows the pump prices and food prices are killing my budget too! But really, folks, do we think that drilling in Alaska will really be a solution? And if we get there by harming life, what’s the point? We share the world together. There’s a country song that says “you’ve got to stand for something or you’ll fall for anything.” I stand for and with, the polar bears. I stand for safe workers working in non-oil-based companies. I stand for long-term solutions, not short-term near-fixes with no guarantees except likely harm to innocent bears and workers. I stand for kindness! SONAM BEN WILLOW Schenectady
We will only end up like North Korea, fearful, starving and in the dark, if we do nothing and hope for the best. If America moves to meet the challenge, like it did during the Great Depression and WWII, we can overcome peak oil and climate change.
There are many views on the reasons for the Great Depression and WW2......one of them being the use of these 'incidents' to spur the masses on......complacency, laziness, fatness,boredom and the likes are reasons for the falls of many empires..........conspiracy theories?
we will eventually march to the beat put before us.....we have too.....
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
>> Are you aware that the Saudis are boycotting American products? In >> addition, they are gouging us on oil prices. >> Shouldn't we return the favor? Can't we take control of our own destiny >> and let these giant oil importers know who REALLY generates their >> profits, their livings? How about leaving American Dollars in America and >> reduce the import/export deficit? >> An a ppealing remedy might be to boycott their GAS. Every time you fill >> up your car you can avoid putting more money into the coffers of Saudi >> Arabia . Just purchase gas from companies that don't import their oil >> from the Saudis. >> Nothing is more frustrating than the feeling that every time I fill up my >> tank, I'm sending my money to people who I get the impression want me, my >> family and my riends dead. The following gas companies import Middle >> Eastern oil: >> >> Shell.................................... 205,742,000 barrels >> >> Chevron/Texaco.................... 144,332,000 barrels >> >> Exxon /Mobil........................ 130,082,000 barrels >> >> Marathon/Speedway............. 117,740,000 barrels >> >> Amoco.................................. 62,231,000 barrels >> >> And CITGO oil is imported from Venezuela by Dictator Hugo Chavez who >> hates America and openly avows our economic destruction! (We pay Chavez's >> regime nearly $10 Billion per year in oil revenues!) >> >> The U.S. currently imports 5,517,000 barrels of crude oil per day from >> OPEC. If you do the math at $100 per barrel, that's over $550 million PER >> DAY ($200 BILLION pe r year!) handed over to OPEC, many of whose members >> are our confirmed enemies!!!!! It won't stop here - oil prices could go >> to $200 a barrel or higher if we keep buying their product. >> >> Here are some large companies that do not import Middle Eastern oil: >> >> Sunoco......................... 0 barrels >> Conoco........................ 0 barrels >> Sinclair....................... 0 barrels >> BP / Phillips................ 0 barrels >> >> Hess. ............................. 0 barrels >> ARC0............................. 0 barrels >> >> Maverick......................... 0 barrels >> >> Flying J. .......................... 0 barrels >> >> Valero............................ 0 barrels >> Murphy Oil USA* ............. 0 Sold at Wal-Mart , gas is from South >> Arkansas and fully USA owned and produced. >> >> *Not only that but they give scholarships to all children in their town >> who finish high school and are legal US citizens.. >> >> All of this information is available from the U.S. Department of Energy >> and each company is required to state where they get their oil and how >> much they are importing.
Re June 10 letter, “Gazette editorial page out of touch on home heating costs”: I tend to agree with Assemblyman James Tedisco that the June 2 Gazette editorial is out of touch on home heating costs. Almost daily the media reports, penny-by-penny increases in gas prices; but not so much about what is happening to the cost of home heating oil. Your June 2 article on heating oil referred to “stocker shock,” but did not mention just how bad that shock is. The last time I checked with my supplier, the cost of heating oil was $4.54 per gallon, and will no doubt, increase by the start of the heating season. If there is any criticism to be made, I believe it should be directed at the Schenectady County Legislature — for adding to the high cost of oil by collecting a 4 percent sales tax. Of course, as the cost of heating oil increases, the more the county rakes in Approximately half of the $200 Mr. Tedisco proposed to help seniors would just about cover the tax bill over the heating season at the current cost of oil. I did ask my oil supplier if any other county they serve applies a sales tax to heating oil and the answer was no. Likewise, New York state doesn’t collect a sales tax on heating oil. I can see no justification for taxing an item that is so vital to those who depend on oil to survive the winter’s cold. MARTHA S. FERGUSSON Schenectady
The above article was written by a true tree hugger and it's because of them that we're in the shape we're in right now with the lack of oil.
What kind of shape are you in ? I just heard this morning that if the weight of the average American dropped to the 1960 s average- that we could save a billion gallons of gas per year- I meaan hauling everyones fat a$$ aroiund is burning too much gas- Fat people cause alot of problems-
Gee, must be that Japan and China are saving tons of gallons on gas consumption since they are all tiny people there, huh?
But look at it another way...over weight people don't use as much 'heat consumption' during the winter. They can generate enough heat on their own and are usually keep their thermostats lower during the heating season. So I guess it's a wash.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Gee, must be that Japan and China are saving tons of gallons on gas consumption since they are all tiny people there, huh?
But look at it another way...over weight people don't use as much 'heat consumption' during the winter. They can generate enough heat on their own and are usually keep their thermostats lower during the heating season. So I guess it's a wash.
American Airlines realized years a go that the polished aluminum instead of paint save about a 100 gallons of paint or 1000 pounds wich saves a bzillion dollars per year in fuel cost-
Hey MT...who is the guy to the left of Tedisco in the pictures?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Logged
