Here’s a warning for anyone who pays for their gas with a credit card: Read the terms of your sale very closely. More gas stations are tacking on a surcharge for anyone who pays with plastic.
It happened to me this weekend at a Shell station near Marco Island, Fla. I pulled up to the pump, swiped my card and then noticed that in addition to the exorbitant $4-a-gallon price, the gas station added a 6-cent surcharge for using a credit card.
Of course, the station had a different perspective. It termed the $4-per-gallon price a “cash discount.” (I took my business elsewhere.)
This is hardly new. But you tend to see the cash-price scam pulled by service stations in bad neighborhoods or remote locations — not in the suburbs of Southwest Florida. There’s a lively exchange on Yahoo! Answers on this topic (warning: the post contains some offensive language).
I can understand why a gas station would want to offset the merchant fees charged by credit card companies. But advertising one price and then charging another is deceptive and probably violates the station’s merchant agreement with the credit card company.
If you’re charged a different rate in a less than straightforward way, the best thing to do is complain immediately. You could get some of your money back.
I think the long-term solution isn’t lower fuel prices or even a uniform rate. It’s a better car.
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Here in New Jersey the prices are always published on a sign as they are elsewhere. But at some stations the text on sign now has a twist while the numbers have remained the same.
It use to be Regular $3.79, Super $3.89, and Premium $3.99. Now it is Cash $3.79, Credit $3.89, and Premium $3.99. Cash has replaced Regular and Credit
is the new name for Super. So much for 89 octane.
Didn’t the credit card companies put a stop to this practice years ago? I have noticed in some parts of the country that “discount” gasoline stations only accept cash or debit cards.
This has been going on here is Suffolk County, NY for about a month now. I pulled into a station that had a price cheaper than others (at the time it was about 3.99; gas now in this area averages 4.35). In the town of Huntington, all gas stations are required to be full service, so I handed over the credit card to the attendant and expected the gas to be $3.99. I actually look at my receipt always and noticed that i was charged 4.09. I asked the attendant and he pointed to a the main sign on the road where in small letters above the price was written “CASH”. I then noticed that at the pump in small numbers was the credit price –ten cents more. I was outraged. I called the credit card company (AMEX) who said that it was a local issue and I called the local government–Steve Levy’s (the County Executive) office referred me to Consumer Affairs and they said that it was legal…..
I no longer go to that gas station–GASOLINE HEAVEN (GULF) in COMMACK –and try to find more honest stations. It is the biggest scam I have seen and I wonder how many victims don’t even realize that they are being scammed because they never look at their receipts.
This has got to be deceptive because it is a lie. But then we learned from our leaders how to lie. First of all banks probably do charge a fee but the amount of that fee is not the amount of profit collected by these stations. Second I say everyone who pays for gas should pay in cash. What that does is to leave them vulnerable to theft. They put the employee in harms way on purpose.
Why would any one what to work at a place where the only thing between you and a bullet is glass all for minimum wage. Yeah I think I’d risk my life so you can make an extra buck. Thanks for thinking about your employees but hey their a dime a dozen and what you make in profits is far greater than the cost of a new employee.
Guess capitalism is king!
I could have sworn that several states, years ago, made it illegal to have ‘credit surcharges’… is that not correct?
A nationwide high volume retailer can achieve 1.5-1.8 percent “discount” rates on credit with signature presence. With pay at pump, it will vary greatly – asking for a zip code will save the merchant significantly on the rate, but let’s assume that at 2 percent on average that a cash customer should be much more appealing to the retailer than a credit wielding consumer.
Add that by going in to pay you’re more likely to buy a high margin snack…I’d be willing to say it’s a smart business idea.
While I some states or municipalities have different restrictions on discreminatory pricing, it isn’t normally considered predatory to charge a customer more for a credit card rather than cash – but could be if reversed (since only some citizens can have a credit card, this would hurt those in situations that cannot achieve credit card holder status for whatever reason).
The typical merchant agreement from Visa states that a credit surcharge cannot be assessed, but if it were to be termed a “Cash Discount”, I believe enough wiggle room would permit the retailer to proceed.
Two options from here – we can either pursue to press Visa/Mastercard to issue an advisement to retailers that a “Cash Discount” is equivilant to a “Credit Surcharge” and allow penalties against the retailer. Or, what I will be doing, enjoy the cash discount and bring some dinero to your next fill up. Perhaps the psychological impact of watching all of those bills leave your wallet will help to build the conservation mantra we all require.
I track my gas expendatures by vehicle closely with Quicken – while gas has lept up significantly, and I have added a less fuel efficient small pickup (only 19 MPG, worse I’ve ever owned) to my household fleet, my household gas spending is down – we’ve just cut back driving altogether.
Actually, most LARGE oil companies have programs where the credit card companies pay THEM a percentage of sales – with the cost of the card [1% usually] being charged to the dealer. Just like affinity cards that pay you cash back or which give you airline miles, if you generate enoough charge activity the credit card processors will pay YOU for the sales. That is why most if not all oil company contracts PREVENT the dealer from offering a cash discount – they MAKE MONEY off credit card transactions.
As for ’scam’ – I disagree here. The ’scam’ is always clearly identified as a ‘cash price’ or some other deal – RIGHT ON THE PUMP. You don’t like it – drive away. Just because you are buying gasoline does not mean that you should fail to engage your brain.
To the author who wrote this article….Your article does not contain
accurate information.
First, when a merchant signs on with a CC co, they sign an agreement
that they will NOT “tack on” ANY fees to cover the fees the CC imposes
on the merchant. That’s a FACT. The exception to this is for merchants
located NOT in the US. It’s not unheard of for London hotels to make
note of the fact that any rooms paid with a CC will have a X% tacked on.
Nor can a merchant charge LESS if one pays for cash. That is ALSO
included in the agreement. Obviously this it to protect the CC co from
potential lost fees.
AND a merchant can NOT require a minimum $ purchase be made before
they will accept your CC. Again, in the agreement the merchant “agreed”
to.
This applies to ANY US merchant: gas stations, restaurants, etc
Gas merchants are the only one pulling this “scam”. Many restaurants
post a “minimum”. Merchants are relying on the ignorance of the public
of not knowing the rules. I keep saying this: the worst type of customer
for the merchant is an informed customer.
Specifically in restaurants, I’ve refused to pay the “surcharge” quoting
the rules of agreement the merchant signed. NEVER, have I had any
merchant fight me on this when I’ve challenged their “requirement”.
They know I’m right. Having a copy of the CC web page that states this is also a great way to shut them up. I’ve also told them that I’ll be reporting them to the CC co.. And YES, I HAVE done that. The CC co’s then deal with the merchant.
I have noticed the Cash price/Credit price at gas stations for years. Ofcourse you have to look carefully at the signs to notice this price difference. They draw you in with this teaser price only to find out you have to pay in cash And with the price of fuel nowadays who carries that much cash.
July 17, 2008 – Didn’t realize this was happening. Went to Valero gas station and food mart (run privately) to fill up truck and gas can for lawn mower. I had stopped at the 7-11 where the price was $3.95/gal but noticed across the street at the Valero station (Richmond, VA close to the intersection of Woodman and Hungary Road in the Laurel Park area – 9024 Woodman Rd – Richmond, VA 23228 ) was selling at $3.93/gallon. Since I was filling up – a savings of $.02 was enough for me to drive across the street.
When I got there – the pumps said the exact same prices as the big price sign but there was a handwritten note taped to each pump stating cash price only. Fine but what was the price to be if you were using a credit/debit card? I checked all the pumps – all matched the big sign. I thought well it was probably just a couple of cents more (the 3 gas stations at that corner all usually match each other in pricing) but decided before I pumped to go inside and ask why the credit card rate wasn’t posted and what was the price for regular grade 87 gas. I was told it was $4.08 per gallon. Furthermore they didn’t think there was any issue – said they didn’t have to post the true credit rate on the pump or anywhere else. The note said the $3.93 was cash only – if you decided to pump without asking – that was your problem. Needless to say – I was fit to be tied. Needless to say I went back across the street! Now I wonder how many others are doing this that I just hadn’t noticed. This has to be illegal and downright unethical! I’m going to try to find out who to report this to if nothing more than to the TV stations so they can warn other people not to get caught. I’m going to send out an email to all my friends, family and associates and give them this information and any other I find plus let them know about this specific station in our area. I urge everyone to do the same.
I couldn’t believe when I found this site that other people and different stations/states where having the same issues. What is this world coming too??
I have also run into this problem at a Shell station in Meriden, CT.
Many Shell stations have a sign where regular octane gas is priced and shown in large numbers, and a smaller price shown for diesel under it. The price was $4.23 for cash and $4.35 for credit. The problem is that the cash price is NOT signed as such (the one in large numbers) and the credit price is where the diesel price should be, confusing passing motorists (some who might have diesel vehicles) into thinking diesel dropped 65 cents overnight. However, instead of saying “diesel” it says “Regular Credit” in microscopic letters just to remind everyone they’re still getting screwed. They just don’t realize it until they pull up to the pump and see the digital price display above the nozzles.
No other station in town does this, and because of that, Shell will never have the pleasure of seeing my vehicle at their pumps ever again. I only went there today because I needed gas and had cash (only $20) on me and had planned on paying in cash anyway (I usually use my card and buy gas at the membership warehouse club when shopping there every 2-3 weeks or so). Plus, this station is less than a mile from my house so I wouldn’t use much gas driving from the station to my house (the warehouse club is 5 miles, at most, from my house).
As the old saying goes, “Fool me once, shame on you. Fool me twice, shame on me.” Shell fooled me once, but never again. I will be taking my business elsewhere and keeping an eye on the signs. I will never buy gas from a station that offers seperate cash and credit prices ever again.
That should be it, for now.
People – wake up and realize the obvious here. I don’t care how they want to call it – these are NOT “cash discounts” – they are merely a deceptive description for what they really are – credit card surcharges – and some are now running as much as 15 to 30 cents per gallon. Do the math – that’s an extra $20-30 /month on average. I can remember back in the ’80s when Getty proudly touted “Same Price Cash or Credit” at their pumps, and had radio ads attacking competitors who charged extra for using credit cards (Shell was one practicing this disguised as “Pay Cash and Save” -while they didn’t even have to post the credit prices!) The ad compared the practice to a restaurant charging extra for a customer using a credit card to pay for a meal. The outrage practically made this injustice disappear by the end of the 80’s, but with merchants losing profits with today’s gas prices, it has crept back into play. Given $4+/gal, who’s really going to have $75 or more in cash on them when they fill up … unless they run to the ATM beforehand. What also bothers me is that there is no law nationwide to clearly post both cash and credit prices, should the stations choose to do this. And those stations who force customers to pay “cash only” better be fully insured – as they will become obvious targets for robberies – as well as the paying consumers. I don’t have a Getty station in my area, but if they are still around (they’re being rebranded as Lukoil nationwide) I’d like to know if they are continuing their practice of charging the same price, cash or credit – and if they are, perhaps rolling out those old ads from the ’80s would help curb this injustice once again.
July 27 2008;; I can tell you i just got cought up in this as well, i saw $3.85 and i pumped my gas and noticed i payed $3.90, i went back in and said something to the attendent and he told me i paid with a credit card, ,and there is a sign stating that,,,all i saw was a sign that said CASH OR CREDIT CARD, nothing really stating in spacific, but that made no difference to me,,,money is money to me , i know what he did is not right and even legal, i told him i am turning him in and reporting him to the proper people to deal with this, No matter how you look at this, people that use there cards are using them for a reason my case is so i don’t get robbed at my job,so i just don’t carry cash ,,i think this is some discrimination act against the people for using cards,i because after all , they are making money off this, they supposed to be greatful for our bussiness insted,but thats not good enough for them, so something really needs to be done about it,,,and i am not going to stop until something is done,
I am surprised at how many fear mongers are out there rearing their ugly heads. I do not work for an oil company, a convienience gas station, or for a credit card company. However, I feel compelled to state the obviously absent facts here.
I do own a small automotive service business and we have been reeling from the increases in credit card processing fees in the past couple of years. We spend, on average, between $500-$900 EVERY month in credit card fees.
Now, from our perspective, the 45% of our customers who pay with cash or check, or even low cost debit cards, are going to have to pay higher prices, just as those paying with credit cards will, because we need to raise our labor rates to cover the ever increasing costs of doing business, specifically for costs associated with increases in credit card usage. Is that fair? If I were a customer who pays my bills with cash or check, should I have to pay more because other customers use a payment form that actually costs the business a significant amount of overhead? (Keep in mind that it takes many repair bills to cover that expense every month. Consider every sale must also cover other costs too: cost of parts, cost of labor, taxes, building mortgage & property maintenance, tools, training, large equipment (like hoists), etc., and a small fraction for owner profit.)
I only came across this discussion as I was looking for information on the legalities of offering a discount to customers who pay with cash (that means actual cash or check), or a little less of discount if you pay with debit card.
It’s unfortunate that when ever we feel wronged on an issue, we rarely get to the see the flip side of the argument.
What’s really going on with the retail gas price situation is that people are paying with credit cards, buying less in the convienience store (where the only real profits are), and the only ones getting rich are the fuel companies providing the fuel (certainly not the retail sellers – check it out) and the credit card companies.
Take a real hard look at the credit card industry. The are making great profits, and even though people are filing banckrupcy at an alarming rate (we just had an employee go through it) the credit card companies keep giving cards to young adults without financial sense and experience, especially to struggling college students, and to mature adults that are already too far in debt to be able to pay them off each month. Not to mention the rates Visa, MC, Discover, etc. are charging to retailers to cover the extra costs assocoated with all the perks and programs promoted to the end card users. Often times the card users never really benefit from those programs, but the credit card companies sure do!
Our economy is faltering, credit card companies lobby for laws that only protect them and their profits, AND the government will bail them out when they get into trouble. (Like the insurance companies that got bailed out after Katrina – even though they had lots of real estate they could have sold, and were making great profits!) Oil companies are posting record profits too! (From fuel and from gas credit card fees.) Yet, our government still subsidises the industry.
Who is going to bailout the little guy, your corner market, local barber, or your auto repair shop when the expenses to their bottom line put them out of business because they can no longer compete with the big retail bullies (like wal-mart)? Just look at what happened to many of the little family farms – gone.
I also am a small retailer. The credit card companies began issuing rewards card in 2005 I believe. The credit card companies just legally steal several percent more service charge from my account when I take a rewards, business or corporate cards. Under the credit card agreements I can’t refuse the transaction based on the nature of the card.The rate is sometimes twice the regular discount rate. Only about 60% of people that earn rewards take advantage of them and the credit card company makes out like a bandit.
Surcharges are legal in some states, but not in others. Surcharges are prohibited by the credit card/merchant agreements. Cash discounts from the regular posted prices are permitted by the agreements and by law(I read the agreement today). I have raised my prices on all items by a sufficient percentage to pay the gouge by the credit card companies. I give a 3% cash discount to everyone paying cash or with a PIN based debit cards. Signature based debit cards carry the same high rate that regular credit cards and the user gets no discount.
As more merchants get tired of getting ripped by the card companies you will find that you will be getting to pay more at a lot of places than cash customers pay. Get used to it.
In Suffolk County, NY the road price sign for a any product being offered for sale must be accurate and include the terms and condition of that price i.e. “CASH” or “Self Serve”.
Have you noticed some stations advertise on the road price sign their low octane, medium octane and medium high octane instead of low medium and high?
I don’t like it either but until there is a law changing it…. buyer beware.
Wow, interesting reading. I think I’ve come across a scam, but not so sure. Since, it only happened to me once. Over the weekend, I pulled into a gas station in Clifton, NJ. My wife’s been warning me not to go to this particular gas station, because they seem to be very slow in filling up the tank. But, I gave them the benefit of the doubt. Plus, I needed gas quickly. So, anyway, I went there to get $20 of Plus using cash because there was a difference in the cash/credit prices. I’ve noticed that gas attendants like to use their own credit cards when consumers pay cash (which I have no problem with, only when the price of cash and credit are the same) to get the free gas points from their credit cards. Now, this doesn’t work for the gas attendants, when the price of gas is different for cash/credit. So, when I asked for $20 cash for Plus, I noticed the gas attendant started to use his credit card and started to fill my tank with Regular. I noticed that the price of Regular gas CREDIT was very close to the price of Plus CASH (6 cents cheaper). I caught this, because I always like to look to make sure they are putting in what I asked for. So, I’m thinking the scam is that the gas attendant is ripping off his employer, giving out more gas for the Regular price, but is scamming the consumer, by giving them a lower grade gas. Who do I contact in NJ, if I wanted to report this???
I was also annoyed by this same fact. I pulled into several gas stations here in Tampa, Fl they all had these additional fees. However, in researching this I am not sure what legal ramifications we as consumers have. It is a Florida Law that merchants can not charge a Surcharge for credit card purchases. A surcharge is an amount added to the transaction after the fact. However, what is completely legal is to sell their gas at 2.67 per gallon then offer a $0.05 discount per gallon to any customer choosing to pay cash. For some reason this is not the same thing as a surcharge. I guess when you look at these fees from the other direction, in other word offer the cash discount, the $0.05 extra your paying per gallon is not really a surcharge for the credit card purchase. The funny part is since there are only really 2 major groups of payment types I don’t know how the convening authorities don’t consider this raising the credit card price. Just another fine example of corporations making a mockery of the legal system to suit their own needs. I guess if i ever decide to assault someone I will simply tell the police he fell on my fist. See if that gets me anywhere. Sounds very similar to the whole burglar suing a home owner for assault.