Pay With Cash, Get Cheaper Gas
So credit and debit cards are really convenient, but how much are you willing to pay for that convenience? A willingness to make an ATM run before stopping at the gas pump could save you 5 to 10 cents per gallon. The interchange fees, a.k.a. merchant fees, under such hot debate right now in Washington have launched a new trend.
A recent StreetInsider.com article says it probably won’t become a trend, but it is undeniably a trend — at least in the three states I just drove through on a recent road trip. In all three states, gas station signs could be seen advertising a regular gas price and then a different, lower gas price for customers paying with cash. This “cash discount” of 5 to 10 cents, on average, is the gas station operators’ way of taking matters into their own hands. But could it have serious repercussions for them?
According to StreetInsider.com’s Insiders’ Blog:
“We asked Mogan Keegan analyst Robert Dodd if such a trend is possible. Dodd said it was unlikely. He said if merchants offer two separate prices, one for charges and one for cash, this would be in violation of the processors rules, meaning they could pull the merchants account altogether - a risk many gas station owners simply could not chance.”
However, there is considerable pressure from credit card industry lobbyists (of course) against the Credit Card Fair Fees Act, which aims to reform these credit card interchange fees. There has been talk that “now is not the time” to do away with these fees, and if such measures are taken, credit card rewards will have to be revamped accordingly. So it seems to me that, if enough gas stations unite and start offering cash discounts, the credit card companies would probably look the other way. Strength in numbers, right? It will certainly be interesting to see what happens here — as my recent road trip revealed, plenty of gas stations are calling the credit card companies’ bluff.
June 17th, 2008 at 8:57 pm
[…] cash. When you fill up your gas tank you will have to pay with cash instead of swiping your card at the pump. Any impulse buy you indulge in will be paid for in cash…although most people find that […]