Junk fees and other obstacles of the road

By | September 23rd, 2013

Anna Lurye/Shutterstock
Anna Lurye/Shutterstock
At the intersection of Highway 20 and Highway 101 in Willits, Calif., you’ll find three service stations. But look closely before you pump gas, otherwise you could pay a lot more than you expect.

What follows is a cautionary tale about junk fees, from an industry that journalists like me tend to ignore, unless it’s spilling hundreds of millions of gallons of unprocessed petroleum into the Gulf of Mexico.

But the cost of a product, both perceived and real, are very much in the news today, with a key part of the Affordable Care Act scheduled to kick in Oct. 1. Fees are a hot topic in my neck of the woods, with some industry apologists spinning the absurd argument that junk fees such as the ones I ran into are good for consumers, because it gives them choices.

Here’s what happened to me. On a recent morning, as we drove from Mendocino, Calif., to Neskowin, Ore., I congratulated myself for steering clear of the Chevron station, where gas was a few pennies more than the Arco across the street. But when I slid my card into the Arco “PayQuick” terminal, it demanded a 35 cent transaction fee before I could refuel. Arco explains the fee on its site.

“Forget it,” I muttered, looking across the 101 to the Safeway service station, where gas cost the same — minus the deceptive transaction fee.

Or at least that’s what I thought it claimed.

Safeway “reduces” the price of your groceries and gas when you show your membership card, and although I’m skeptical of clubs where members are offered preferential treatment, I carry a Safeway card. I was given the impression that I’d pay $3.77 per gallon after my Safeway discount, and would save the 35 cent transaction fee.

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Yes, I crossed the road to save 35 cents. It was the principle.

The other side

I presented the Safeway terminal with my card and my credit card and started to pump gas. And that’s when I noticed it was charging me 10 cents a gallon more than the Arco station.

I asked the woman at the counter if the $3.87 price was a pre-discount rate that Safeway was showing me so that I could fully appreciate the savings I was getting as a Safeway “member.”

She laughed at me. And it wasn’t the kind of laugh from telling a funny joke, either. Perhaps “mocked” would be a better word.

She told me, as a teacher explains to a new student, how earlier this year “the credit card companies” had raised their fees, and that Safeway had to pass the costs along to customers.

The 10 cent “discount” was available only if I paid by cash. I could wave my Safeway card around all I wanted, it would not affect the price. Worse, I couldn’t cancel my transaction and change my payment method.

I was confused.

I checked to see if others had been snookered by Safeway’s policy and found a story about “accidental” overcharges at another California gas station. Its website, which tries to explain the apparent bait-and-switch discount, makes me want to cut up my “rewards” card in disgust. Does Safeway think it’s an airline?

Junk fees and price deceptions

As we drove north with a full tank of overpriced gas, we did the math. Even after paying the 35 cent “fee,” Arco had the cheapest gas. Safeway’s fuel was the costliest if you paid by credit card, which we did.

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The most honest price? The Chevron station.

Looking back, I wish we’d refueled at Chevron. Like many customers, I’m willing to pay more to be treated as an adult, instead of receiving an unwanted lecture about the cost of accepting credit cards, which is absolutely no concern of mine.

But it’s also a warning about fees, which can pop up anytime without notice. We don’t have a lot of Arco stations back East, and I normally buy my gas at the local Hess station, which offers a fair, gimmick-free price for fuel. I can’t be the only person who feels these pricing tricks are wrong and shouldn’t be allowed.

Now, I’m sure some of you reading this rant are saying to yourself, “Come on Chris, people are sophisticated. In a free market, shouldn’t a business be able to pass its costs along to a consumer, as long as it’s disclosed at some point?”

I get it. If I were an advocate for the oil companies — not that they need another advocate — I would twist the facts around to justify the fees and their problematic disclosure. But the last time I checked, I still had the title “Consumer Advocate” on my business card.

Aren’t we entitled to an unambiguous price for fuel? Don’t we have the right to be unhappy when we don’t get it?

Are these fuel surcharges good for consumers?

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  • bodega3

    Arco’s pricing is always posted as a cash price and it usually the lowest around, but not always. They state on their signs that credit card prices are higher. I haven’t been to Willits recently but CA is very clear about how gas stations state their pricing.
    As for Safeway, we are getting one in our area opening up in the next few weeks so I will have to see how their signage is and how clear it is for customers, But we do fill up in Novato at the Safeway if we are in the area and there has never been any fee for using our credit card nor a discount for cash vs credit card. In fact, we saved $1 a gallon off their low pricing to save $15 just the other week when we were down there by using our earn points.
    Did you use your Safeway card at the Chevron? Most, but not all Chevrons give Safeway customers a discount, provided you have earned points by shopping at Safeway. I usually get 20 cent off at Chevron but you have to know you prices to know if it a better deal that Valero. Those participating Chevrons have Safeway flags out advertising their association.

  • Carver Clark Farrow

    Perhaps its because I live in California and am familiar with the local customers, but here, the cash price and the credit price are plainly disclosed. No fine print, no eggshell white print on pearl white paper.

    Regarding the credit card “surcharge”. It does seem reasonable that a business give cash customers a discount since by paying cash the business lowers it operating costs.

  • Carver Clark Farrow

    Arco stations rarely take credit cards. I’ve come across exactly one that did.

  • Jennifer M.

    I must admit, I don’t really go out of my way for gas prices because I figure that the small savings per gallon get burned up in the extra gas used to go farther and since I usually fuel up on my way home, I just want to get home for the day so the convenience has great value to me personally. I do make every effort to avoid buying gas near my office right over the DC-line in Maryland though, as it is significantly more expensive than it is near my home 18 miles north.

    I have actually been overseas for the past 18 months, but to my recollection, where I live in Maryland they always post the credit card price and then have a sign that says cash discount.

  • $16635417

    Interesting, the Chevron I frequent boasts it’s best price for Chevron credit card holders and cash, while the “fine print” price is 10 cents higher for all other non-cash transactions.

    Hess? Well, near me they’re just the highest across the board….credit card or cash.

    I also find it interesting that even with the fee “un-bundled” at Arco, they still have the better bottom line price. Kind of makes the case for Arco.

  • That’s nice. If the disclosure had been that good at these stations, I wouldn’t have written this story. I guess it varies between locations.

  • Sam Varshavchik

    The same is true, at least, around here, in NY and NJ. Gas stations post their credit and cash price prominently. And not just on the pumps themselves, but on their road signs too.

  • Joe

    I don’t understand why companies can’t just publish the price and charge the published price.

  • EdB

    For the most part, they only take Debit Cards and at the pay terminal, state the extra fee. They lost a lawsuit about that a few years ago and that was part of the settlement if I remember correctly.

  • EdB

    I’m curious Chris. Didn’t the pump have the display portion where it shows the price per gallon? I haven’t seen one that hasn’t. It’s not exactly mouse print, white on white, or hidden where you can’t see it before you start pumping.

    The surcharge for using a credit card though, that can be a bit harder to find, but it is also illegal in California. You can put a surcharge on Debit Cards, but not Credit Cards, thus why most ARCO stations don’t take CC. Even though it is illegal for the CC surcharge, that doesn’t stop most stations from doing it anyways since the law really has not teeth. You have to take the merchant to small claims to collect and who is really going to do that for 35 cents?

  • EdB

    Other than the fact that ARCO is a BP company now. That for me is reason enough to avoid them. And this avoidance comes from an action that happened long before the big gulf oil spill.

  • Jeanne_in_NE

    I sympathize with you, Christopher Elliott. We drive all over the country, and have seen exactly the kind of confusing signage you’ve described. Only got suckered into it once, somewhere in Oregon. As I recall, we just fed $ bills into the Arco pay stations as we have no ATM fees on our checking account, “foreign” or otherwise.

    The new scam, and I use scam very deliberately here, is to not list which of the fuels is an ethanol blend. This is the custom in Kansas and there was a big push in Nebraska’s Unicameral to remove ethanol labels from pumps; the idea is that more people will buy ethanol since they can’t tell the difference by looking at the pump. More consumption might bring the idled ethanol plants in Nebraska online again, and more farmers will find markets for more corn, etc. etc. One local station already puts ethanol into both its 87 and 89 octane blends, but those are clearly labeled. “Cheapest” gas around. I don’t go to that station.

    The reason this is a scam is that my car gets 10% less efficiency on ethanol. (On my husband’s car it’s only 3%.) Dropping the price 10 cents/gallon for ethanol when the price is $3.50 (for example) doesn’t come close to making up the 35 cents cost for decreased fuel efficiency.

    There’s a “cheap” station outside of Des Moines, which doesn’t label ethanol blend and non-ethanol blend. I reported them to Weights and Measures, as Iowa requires the labels, so far as I know. If you feel that your station did not correctly state the correct price for gas, that’s an avenue you might pursue.

  • MarkKelling

    Strange. I also travel a lot but I never see any station offering gas that does not contain ethanol. I didn’t realize that no ethanol was an option any more. Now that doesn’t mean that some of the gas I buy doesn’t have ethanol in it, because the sign on the pumps says “may contain UP TO 10% ethanol” or something like that. I know that any car using the E85 ethanol blend (85% ethanol) will get worse mileage than on standard gas, but it has to be a special setup in the vehicle to use that or there are major mechanical problems. I had never heard that the standard ethanol blend caused lower mileage.

  • $16635417

    Thanks! No Arco’s in my region, good to know!

  • Jeanne_in_NE

    Sorry if I wasn’t clear – still pre-caffeine for me. :)

    There’s still ethanol in the gas which isn’t being labeled- but there’s nothing to tell you that there’s ethanol in the gas. For my husband – no big deal. For me – big deal. Every time we get a new car, I run the “ethanol vs. non-ethanol test.” We fill up 3 times with regular and take note of cost per gallon and miles driven and do the math. Then we fill up 3 times with ethanol and do the same thing. He buys Hondas and mileage isn’t affected much. My Subarus don’t like ethanol and since I often drive for hours at a time in places where there aren’t gas stations for 25 miles or more, it’s essential that I get good mileage. (Or fill up more often.) My mother’s Dodge Caravan gets really poor mileage on ethanol blend, but that may be more due to the age of the car than anything else.

  • MarkKelling

    I occasionally buy gas at Safeway in my area. No fees, no surcharges, nothing extra. I get the advertised card member price. Their base price is a few pennies higher than some of the surrounding stations, but then I only buy their gas when I get their shopper point discount. (They ran several promotions this summer where if you bought $20 of groceries you got 20 cents off per gallon as well as a 10 times the points offer resulting in a fairly large discount for me.) Same at the other stations around – the advertised price is what they charge at the pump. Also no difference using credit, debit, or cash in the price. Not sure if that is by law or just how they do it here.

    Guess I will avoid ARCO if I ever see one. I don’t like their payment policies. Not that I have anything against them doing what they feel is best for their profit, but I also have a choice to go elsewhere.

  • SoBeSparky

    Two issues here, fair disclosure and add-on fees. The former should be legally required in every instance right on the same sign as any price. “Cash price,” “Member Discount Price,” or similar should be in a size readable from the highway without stopping.

    Fees can be a boon to the consumer. I charge my gas to get points in various schemes, such as Amex Membership Rewards. I would pay cash if the price were 10 cents lower per gallon. Of course, at home, I buy at Costco where I get my “member price” and use an Amex card and still get the lowest price in the area.

  • MarkKelling

    Maybe it’s because I haven’t had my caffeine yet this morning also, but I am still missing something. Who sells pure petroleum gasoline without at least the 10% ethanol added? Everywhere I travel in the US (and that’s a lot) every gas station I have used has the sign on all of their pumps about the gas containing 10% ethanol. I know you can buy airplane gas for your private plane without the ethanol (because ethanol attracts water and water at altitude in your plane’s fuel is not a good mix), but am unaware of anyone in the US selling auto gas without the added ethanol. And the only issue with ethanol in gas for cars I have heard of is if you use the high percentage ethanol blend (called E85 or something like that) in cars that are not specifically set up for it but even the ones designed for it get 10% to 15% worse mileage. I would like to be able to use E85 in my car because I see it at around $1 less per gallon, but my car is not set up for it and it would actually damage the fuel systems. Guess I can look on the ‘net and see who sells pure gas.

  • Jeanne_in_NE

    I’m pretty sure every station these days sells an ethanol blend of gas. That’s generally the 89 octane stuff. I put 87 octane (mid-grade) in my car, unless I’m driving up in the mountains. However, the one local station that I mentioned also sells 87 octane ethanol blend. It’s clearly labeled as ethanol blend. I don’t buy gas there, since ethanol blend of any octane results in decreased gas mileage for me.

    Take away the labels and now the people who benefit are the ethanol plants and the farmers growing corn for ethanol, not consumers like me or my mother, who represents the people with older cars.

    The price difference between 87 octane and E85 really looks tempting to get one of those flex-fuel cars. But even in Nebraska, those are few and far between, so it’s really hard to count on that kind of savings on fuel for the kind of driving I do.

  • Carver Clark Farrow

    That’s not true. You can’t surcharge more, but you can give a discount for cash. From the Attorney General’s website

    section 1748.1 was not violated when a gas station posted two sets of prices with a lower price for cash customers where the cash discount was related to the extra costs the gas station incurred in credit card sales. (The case is Thrifty Oil Co. v. Superior Court (2001) 91 Cal.App.4th 1070.)

    Arco doesn’t take credit cards because they have a robust business selling conveniences and they don’t want to pay that percentage, plus they are cheap.

  • BMG4ME

    On the other hand, here in America unlike most other countries including my native UK, nobody thinks it is odd or wrong that stores don’t add sales tax to the price until you get to the checkout. Who doesn’t do this? Gas stations and (as of last year) airlines!!!!!!!!!!!!! Every first time visitor finds this very offensive.

  • EdB

    That wasn’t the case I was referring to. They are allowed to charge more per gallon. It is the flat rate charged when using a credit card that was not allowed.

    Also, the case with Arco had to do with non-disclosure before pumping.

  • Carver Clark Farrow

    I did a Google maps check. I think its because you were In BFE. I haven’t seen a sign like that in years. And only when I had to see clients in high security prisons in the middle of nowhere.

  • $16635417

    I actually prefer it without taxes. I can usually estimate the tax, so I’m rarely surprised at the register. I prefer awareness of the taxes opposed to having them hidden in the selling price.

    Gas pumps are supposed to have them (edit: sticker with tax breakdown) displayed on the pumps, but I find more and more pumps lacking the sticker. Who’s going to fine them? The government? I think they prefer them hidden!

  • pauletteb

    My car also gets at least 10% lower gas mileage with an ethanol blend. Most folks won’t notice a difference, but my car’s fuel injectors sure can. I get around 50 more miles per tankful when I’m running non-ethanol fuel.

  • Carver Clark Farrow

    Your comment was unclear, at least to me, because of this verbiage:

    Even though it is illegal for the CC surcharge, that doesn’t stop most stations from doing it anyways since the law really has not teeth.

    Most stations do not charge a flat credit card fee. Most stations do charge extra per gallon. Accordingly, that was the confusion.

  • Carver Clark Farrow


  • bodega3

    In the US, taxes are included in the per gallon price.

  • emanon256

    Must be a California thing. We have a Safeway gas station across the street from a Conoco here, and the Safeway is routinely $0.10 less on the sign, and when I swipe my card, I pay and additional $0.10 less than the price on the sign. They have not yet added an additional fee.

    I am strongly opposed to adding on credit car fees to consumers. I worked in finance a long time and a big part of what I did was credit card processing, and I ave always considered credit card fees part of the cost of doing business. Its not giving consumers a choice when you pass on the fees, its practicing business in bad faith. If you take credit cards, then suck it up and accept the costs involved.

  • Carver Clark Farrow

    Is it better to just raise the price for everyone? How is that better? Why not give cash customers a discount because they are reducing the cost of doing business.

  • EdB

    I can see where you could be confused with my wording. By advertising two prices per gallon, as you stated in your reply, it can be viewed as a cash discount. I do have one station by where I work who does add the flat fee for credit cards though. But this guy has other issues where he thinks the laws doesn’t apply to him. Like he thinks he owns the parking on the street in front of his station.

  • emanon256

    I am finding less and less stations that don’t only have Ethanol, and the EPA recently approved up to 15% Ethanol which drives me nuts. It makes a substantial difference in my mileage, and the production of Ethanol is not as environmentally friendly as the corn industry wants us to believe.

  • EdB

    I have read some articles about some banks charging merchant accounts for depositing cash. The argument goes that because the bank has to employ greater security because of the cash, the merchants have to help pay it. So if this really is the case, seems there could be a cost to the merchant regardless of the method of payment. ;)

  • emanon256

    You are right on. When I worked as a director of A/R we had to pay for daily armored truck service to deposit cash and checks. We also had to pay a fee per check, and we had to pay the back fees to reconcile against our statements. The armored truck service was a fixed price, so less cash didn’t not reduce the cost. We then moved to eCHecks, and those had a fee. So no matter what we did there were fees, and I rolled them all into the cost of doing business. I still view adding a credit card fee as a pure money grab. I also worry how much of these cash only business actually report their cash income.

  • Alice Morgan

    I run into this problem all the time, where the posted price is the “cash price,” something that is written in tiny print you can’t see until you reach the station itself. This tends to happen much more often at stations just beside freeway/highway exits because they have you between a rock and a hard place. All of the service stations in that cluster match the same behavior so you’re screwed no matter where you go and the price you saw from the road is often 10 cents higher per gallon when you actually get there. To me, cash price is ridiculous, as many people don’t carry cash and usually not in the amounts needed to purchase a full tank of gas if they do, which will run you upwards of $40 or more. It’s really, really frustrating.

  • EdB

    But you see cases like this in other areas. Online merchants that offer flat rate shipping regardless of your location is having the customers closer subsidizing the shipping for those further away. I have a place not far from me where they charge a flat $25 shipping. You can’t tell me it costs them the same to ship across town as it does across the country. Now it could be the shipper is charging the merchant the flat rate, but the results are the same. Nearer customers are subsidizing the further ones.

  • emanon256

    See my response to EdB, the cash customers require additional costs such as armored car service, check fees, reconciliation fees. Also some customers are far more time intensive and use many more resources, they cost a lot more to the business, but they pay the same price, one could argue that someone in a store who asks too may questions should pay an extra fee to (Ok, I know I am being silly with that one). Every customer will cost the business something, but trying to pass that on in my mind is greedy and a money grab.

  • Helio

    Int’l trivia ;)

    In Brazil, the minimum mandatory ethanol percentage in gas is now 25% (it depends of the int’l prices for petroleum and ethanol, and usually the percentage varies due the sugarcane season, but usually it stands between 20%~25%).

    We also have ethanol only pumps. My Corolla makes about 13mi/gal with pure ethanol, and 19mi/gal with gas (city trafic). Ethanol is usually about 70% of the gas price.

    My car has what we call here “flex engine”, it is supposed to be able to run with any gas/ethanol mixture, pure gas or pure ethanol. In fact, more than 80% of new car sales are with this kind of engine.

  • Kim Setliff

    I agree with you on deceptive pricing. We live in your neck of the woods..Florida..and have found deceptive pricing at some BP stations when using the BP credit card. A cash and/or BP credit card price is advertised BUT if you use the rewards, the reward is taken off the full price, but not disclosed anywhere. Some stations advertise the BP rewards card but do not give rewards. We blame the BP rewards card for the confusion and they blame the station. Shouldn’t there be the same policy for all BP stations? Gives bad vibes towards the station, BP, and the BP credit card. Not good for anyone. YES you do get the rewards, but not all that you were expecting and entitled to expect.

  • Stephen0118

    Actually Carver, that’s not always true (re: plainly disclosing the price). There’s a Chevron station in Woodland Hills that’s off the 101 and Topanga Canyon Blvd where it’s not so easy to spot. From the freeway, you see the overhead sign and you’d think it’s cheap. However, once you reach the station, you’ll see that (in small letters), it’s the Cash price. Credit price is 10 cents more.

  • Bill___A

    These are quite often things that the marketplace sorts out. I note that all three of them are still in business. Arco no doubt found it more economical to charge a 35 cent fee rather than put the price of gas up 10 cents a gallon like Safeway did. Unless you were getting 3.5 gallons or less, you’re better off at Arco.
    I don’t know where you have been for the last 20 or so years, but Arco was the very first company to “cut up” their credit cards and charge a difference for cash versus card. They are the ones that started this trend. I believe Shell at the time kept their cash/card price the same. But once one company does it with different billing, the others fall into line in order to compete. It is the same with airline fees and the like.
    If there is one thing that needs to be changed, it is that Safeway should be required (if they haven’t already) to post clearly on their sign that it is the cash price and credit card is extra. However, if you go into the Safeway store, you will find that they are experts at price deception. They often put things on an “end” at the normal price, and make a sign that appears to be a “sale” sign, but it will simply say “Safeway Price” which is of course the regular price. They comply with the law but try to give a different impression.
    I don’t like the fees either. However, at least these are fees you can get out of, such as by paying cash.
    This is not the case with hotel “resort fees” which force you to buy things you either don’t need or aren’t good – and don’t give you an out.

  • And when you find out the tax included in the price is 20% ..or more. Ack! I’ll keep our sales tax…thank you :)

  • Bill___A

    The problem is the so called premium cards. From what I understand, in the old days, a merchant got a percent credit card fee based upon the volume.
    However, I believe now, the premium cards take a much bigger per cent than the non premium cards, making it difficult for the merchant to know what per cent they will lose out of a particular sale.
    To make their calculations easier, I always use my premium card! However, that thousand dollars a year or more that I get comes from somewhere, and I assume it is from the merchant.
    And yes, I do carry enough cash on me to buy a tank of gas.

  • Bill___A

    The tax in “America” is a sales tax. It is a percentage of the sale. The tax in your native UK is a “value added tax” which is applied at each step of the sales process and is adjusted so the net result is the 20% each time. They are different and that’s why they are done differently. In the case of gas pumps, it is included because it is not practical to separate it on the pump, the gas is already put into the tank. On airline receipts, they total it up along with all of the other fees, just like anything else.
    In your native UK, I think the price of diesel is about 9 dollars a gallon, VAT included, so the cost is far higher. Since petroleum price is set on commodities markets, this extra money is all taxes I expect, which is far more than just a 20% VAT.

  • Bill___A

    I suppose the next article might be the octane rating. The United States does not have uniform laws regarding octane – so be careful if your car requires 87 octane and the state you are in has 85.5 octane on the regular. You will then have to buy mid grade. There is not only this ethanol absurdity but no standard regulations at to octane either.

  • MarkKelling

    You are correct. There are multiple fees for accepting a credit card. the one that merchantgs object to most is the so called interchange fee which is based on the type of card being used by the customer as well as other factors like is it a face-to-face transaction or done over the internet or by phone. Each combination has a higher and higher interchange rate. I don’t believe it is fair to the metrchant to have them pay more on the transaction I do with my cash back card vs. the prepaid card. Why should it matter? If your card issuer wants to pay you something for using the card, they should be the ones hit with the expense.

  • Charles

    We always use GasBuddy before we fill up. I agree on the “going out of your way” thing. But, there are about a half dozen stations along my way to/from work and another half dozen within a block or two. And the price can vary drastically. Right now in that area I see 3.48 to 3.69. That’s real money for a tank of fuel.

  • EdB

    You sure that it is a Chevron station? The stations visible from the freeway are two 76 and an Am/Pm (Arco). But the 76 stations are notorious in this area of downplaying the big price being cash only. You have to look for the little sign on the sidewalk for the credit price.

  • Ben

    “Who sells pure petroleum gasoline without at least the 10% ethanol added?”

    Not very many stations, but some do; mainly smaller/independent stations. In my car (a Honda), the difference in fuel economy is only about 3% (similar to Jeanne’s experience) and so the price premium for pure gas usually isn’t worth it.

    Though I am surprised that there are stations that sell gas with ethanol without labeling it as such, I always assume that any gas has ethanol unless it is specifically labeled as pure gas,

  • Ben

    Now I’m confused. Isn’t 87 octane regular, 89 mid, and 93 high-grade? [EDIT: just looked into it and it seems that some portions of the country feature 85 octane as regular. Interesting!]

    And gas with 10% ethanol is ethanol blend and its what almost all motor fuel sold in the U.S. today is regardless of octane rating. Unless it specifies a different ratio (like 100% gas or E85), you can bet its a 10% ethanol blend.

    And finally, the price of E85 might seem appealing, but do the efficiency math and you may be surprised!

  • DavidYoung2

    Shame on Chris for not planning his fuel stops around Costco gas stations. Cheapest price and, if you pay with your Costco Amex card, you get another 3% (say 12 cents per gallon) back.

    Can someone please develop a Costco Gas App that let’s you plan your trip around their cheap gas :-P

  • MarkKelling

    Yep, after I had my coffee and could think straight, I went and looked on the net for “pure gas” and found a listing of stations claiming to sell no-ethanol gas. None near enough me to make it worth while to drive there to fill up.

  • MarkKelling

    Where you live determines the octane sold. Where I’m at it is 85, 87, 89. Where my family lives, it is 87, 89, 91 (or 93 depending on the seller). Seems somewhat related to altitude.

  • emanon256

    Oh yeah, it’s all over the place now. Some have flat fees, others have fees from <0.5% all the way up to some cars like the fancy AmExs that run 3.5%. I would say the average I see is about 1.5%, and I haven’t seen anything go above 3.5% This annoys me in particular when I see stores charge a 5% markup to cover the credit card costs, because that is also a pure money grab, its covering more than their costs.

    ETA: I forgot the discounts, Mark mentioned. Such as swipe, or address validation, or even zip, etc. And I agree with Mark that I dont think its fare to charge a higher rate for cash back cards, but I still am against passing that cost on.

  • bodega3

    Seriously? I am sure Chris wanted the scenic route, not the interstate where this could have been done….and I don’t blame him!

  • BMG4ME

    What difference does it make whether it’s “hidden” or not. You have no choice but to pay the sales tax so there is no need to know how much the tax is. It’s as pointless as including a fuel surcharge as a separate fee, and then charging you for it when you use your airline points (which is where the UK is much worse than the USA). People complain about baggage fees being charged for separately, but in the old days when the cost of baggage checking was a fee hidden in the overall fare nobody complained. The fact is that with decades of it being done this way, people born here prefer it this way because they’ve never known it any other way. The reaction of most people to baggage fees proves it, because most people preferred it the old way with the fee hidden in the overall price (unlike with taxes you have a way of avoiding it now which you didn’t before).

  • mbods

    I just avoid any gas station which has a lower price for cash customers. There are very few customers at the ones around here (TN). I don’t know about anyone else but I never have much cash on me, never mind $50 for gas. It seems so archaic and dangerous anyway. I mean isn’t this a robbery waiting to happen???

  • BMG4ME

    Yes, that’s what I said, or were you replying to mikegun not to me?

  • BMG4ME

    Generally sales taxes are higher in the UK, that is true. On the other hand there are things you pay for here that you don’t elsewhere. Nothing is free, I’ve lived in both countries and even though I wouldn’t go back to the UK because I prefer living in America, it didn’t seem that there is a substantial difference between the total cost of living in both countries for a family like mine.

  • BMG4ME

    It’s not just in the UK, I used that as an example (but see my response to Jeff too).

    The only two countries I’ve visited where sales tax is not included in the sticker price of most goods are the USA and Canada. I do however see a problem with including it in the sticker price here in the USA – that being that taxes are different in different places, and it would make it hard to include the price on the packaging as happens in some places.

  • $16635417

    Actually, I prefer the current bag fee environment. I rarely check a bag and prefer not to subsidize those who do. When I plan to check a bag, I take that into consideration when purchasing my tickets….do I fly an airline that includes bags? Or pay a la carte?

    I also know that I CAN avoid taxes by planning purchases in different states, counties and cities. (Or online in some cases.) Having the documentation of a pre-tax price saved me hundreds by getting a retailers in a neighboring state to price match an ad from a retailer in my state. Since the ad did not show the tax included..they matched the price, but at a lower tax rate.

  • BMG4ME

    I prefer the current bag fee environment too, separated out like you prefer it, even if I have to make use of them, because I know they are avoidable. It’s when they are not avoidable that I don’t like things separated. Re your second paragraph, that could be avoided by requiring the display of the taxes in the price, while still displaying the overall price.

  • Partly depends on where you live too, in the US, as COL can vary greatly. Not sure about UK. Was in Northern Ireland a few months ago, and was generally surprised and please with prices. Except gas… ;)

    Where I live..COL is relatively cheap

  • Steve

    I remember when grocery stores first started accepting debit cards in the early 90’s and would charge a nominal fee if you used your debit card (even without cash back). It used to be the norm for gas stations like Amaco (now BP) to charge extra for credit card purchases unless you would use an Amoco credit card. I guess everything old is new again.

  • Dick_Hoel

    There’s always the obvious solution which is usually the best – just use cash and you’re going to get better prices. It’s not that difficult.

  • AJPeabody

    My mechanic, who runs the service station I have been using for 30 plus years, tells me that the credit card fees are larger than his contractual profit margin for selling gasoline. He therefore must charge more for CC than for cash. He makes his living with repairs and maintenance.

  • emanon256

    Lower octane acts like higher octane the higher in elevation you go. The octane retards the explosion, less oxygen also retards the explosion. So the higher the elevation, the less octane you need to time the explosion correctly. At least that’s what the guys on Car Talk said.

  • emanon256

    I was asked if I would volunteer my car for an EPA study and they filled it with pure gas at the EPA facility. (They said it was high octane, but not sure if it was 91 or 93). They claimed they drained and refilled it, did the test, and topped it off before returning my car. I got a 12% increase over the usual gas on that tank. I was shocked!

  • bizshop

    I wish there was another option on the vote. Are the surcharges good for consumers? Absolutely NO. Are they confusing? YES Should they be allowed? YES It is a free market, and the last thing we need is more government regulation… If enough people complain to Safeway or another business, they’ll change or at least post a clear disclosure.

  • Guest


  • If making a cross country trip, carrying lots of cash just doesn’t seem the safe way to go.

  • a term, that when actually spelled out, probably shouldn’t be typed in the forum, meaning the middle of nowhere

  • SallyLu

    In my neighborhood, we have 3 gas stations at a 4 corner intersection. Chevron is always the highest, by .20-.30, then there is Valero, which is somehwhere in the middle, then there is Arco. Even though they charge the .35 fee for using a debit card, I’m still saving $3 or more by filling my 15 gal tank there. Now I go to work at 6am, and usually get gas then, so it isn’t crowded, but aif I try to get gas after work, there is always a line. Then l’ll just pay the extra and go to Chevron (we never go to Valero, because their machines are always broken).

  • Carver Clark Farrow

    No, I have to respectfully disagree. The merchants are the ones who know their business model and they have determined that credit cards are such a huge cost that such a cash should be encouraged so that the operating costs are lowered. They don’t find that cash customers incur the same costs.

    Consider. Let’s say you make 10 percent profit from on an item. A 2 percent credit card charge reduces your profits by 20%. That’s a huge profit reduction. If the profit margin is less, then the percentage hit increases. The other charges that you mention a pee in the ocean by comparison.

    Consider. Many retailers try to nudge customers, in numerous ways, not to use credit cards . When I go to the grocery store, the pharmacy, etc., and use a debit card, the system always asks me for my pin. I have to go through hoops to make it a signature based transaction. Similarly, no less than the nations largest retailer, Walmart, sued Visa over these fees.

    My point being is that it is reasonable for a merchant to try to encourage customers to use cash to lower the cost of doing business and pass on those savings to such customers.

    The alternative is that everyone pays higher prices. Seems like a loser to me.

  • Carver Clark Farrow

    My credit union charges me if I deposit too much cash. No such surcharge for check deposits. I’m fine with that as my behavior increases or decreases costs. Of course, I rarely deposit cash so I’ve paid this fee maybe once in the past 10 years.

  • emanon256

    Good point. Just like my Armored truck fee, I think it was pretty steep, but it was fixed. So the more cash I take, the lower the fee per transaction. However, I still consider it bad faith to pass along costs to customers. I think its a slippery slope. The airlines are well on their way down the slope and they have yet to charge a credit card fee and/or cash discount, and you still can buy a ticket and pay cash, but you have to go to the airport.

    If business charge cash customers less, do they then charge customers less who shop during the day because they don’t have to pay for lighting? Or do they charge customers less in the fall and spring when they don’t have to pay for heating or cooling? I know it sounds silly, there are so many costs involved in every aspect of running a business, I think its bad to try and pass it on, being it passing on the cost, or passing on the savings.

    I prefer the model of everyone pays the same price. (or as you say higher prices :))

    I am particularly bitter because I had to re-register my car recently. I got the card in the mail and it was around $250. I went on line at work, and it was still around $250, so I paid on-line and kept my receipt in my e-mail. When I got home, I noticed the amount on my receipt was 5% higher then what was on the card. I called the next day and was told that is the on-line processing fee. I think its their way of getting around the rule that they can’t charge a credit card processing fee. However, this was never disclosed anywhere. It just had one flat price on-line, it never showed price plus a fee, never mentioned the fee, it was quite deceptive.

  • emanon256

    I guess that also depends on volume. I had to also pay the armored service to deposit the checks, and the bank still charged a reconciliation fee. However, when I went to POP-ACH (turns the check into an ACH) it was $0.50 a check, and RIC (Remote Image Capture which works on business ad brokerage checks) it was $1.50 a check.

  • Cybrsk8r

    It comes as no surprise that you’d get better mileage with pure gasoline. Gasoline is more energy dense than ethanol. In general, the heavier a hydrocarbon is, the more energy it has. And diesel fuel has more energy per unit volume than gasoline, which is why, all things being equal, a car with a diesel engine will get better mileage than a gas powered car.

  • Jason Hanna

    10% is the general number.. Interestingly. around here, at least (SC), Non-ethanol gas happens to be almost EXACTLY 10% more than ethanol gas. Funny how that works, huh?

    E-85 here, which gets about 15% or so less mileage costs $0.10 a gallon less than 10% ethanol. I’ve seen in the corn states (IA, NE, etc) that E-85 is FAR less expensive.

  • MarkKelling

    With airline tickets if you pay in person at the airport, they charge you a fee (UA is $35 for example) regardless if it is cash or credit. Almost like they want you to use plastic online.

    My state vehicle registration also charges a fee for using plastic, about 3.5% last time I checked, either online or in person. So I just mail them a paper check so they spend time and money processing that, but they don’t charge an extra fee for it.

    With plastic, the card owner can claim the card was stolen and the merchant loses that money for the transactions in question. There is also a large reserve account balance required on credit accepting merchants (large as it relates to small businesses anyway) that tie up assets so they can’t be used to invest into the business or even make payroll. Where cash transactions are instant and final. There are no fees charged by anyone if the merchant accepts cash. There may be returns, but only accepted under the terms the merchant allows. And the funds are available immediately for use with no holdback. You do have the possibility of theft with cash, but with sufficient controls in place, the risk is minimized.

  • MarkKelling

    It is difficult to pas on the higher interchange charged you based on the card type because most of the time you don’t know what the rate on any specific card will be until you get the bill which is long after the transaction is done.

    Even though you, and many businesses out there, don’t add a line item into the bill for a CC surcharge, it has to be calculated into your pricing. I feel this is the best way to go and businesses choosing to go another route by passing on the surcharge as a line item only end up hurting themselves.

  • MarkKelling

    In my part of the world, no one successfully charged a fee back at the beginning of debit cards. The only place that tried, a burger chain, simply had no one use a card. This was mainly because the debit card network actually paid each merchant 25 cents per transaction to accept the debit cards. Not only did this make money for most of the major grocery chains who joined the plan, it reduced their cash handling costs because people could get extra cash back when paying for their purchases. Less cash on hand meant less time spent counting it and less trips the armored car had to make to the bank.

    Also due to state laws, no one could charge you extra for using credit cards either.

  • BobChi

    There is a HUGE difference between fees you can avoid and which provide an extra service and fees that are added on to an advertised price with no way to avoid them. The first method does provide choices. The second is fraud.

  • Stephen0118


    Actually my mistake. It’s Shoup and Ventura, not Topanga Canyon. Thanks

  • Dave_D70

    Or when the low price is for low-quality fuel. On a trip to western South Dakota, I was coming into Rapid City when the ‘low fuel’ light came on – having seen some fairly high prices for gas, I saw what I thought was a good price for gas on a sign just off an exit. I was still in a bit of a ‘pre-caffiene’ mode and almost ready to start pumping gas when I realized it was 85 octane! I fortunately stopped in time and was able to switch to 87 (which was unfortunately several cents higher).

  • EdB

    Yeah, but with that station, when heading North (West) on the 101, you have already passed the exit for it and going South (East), you have to go make a U-Turn after getting onto Ventura to get back to it. So travelers on the 101 are protected from that station. *grin* I know what you are saying though. And like I mention, almost all the 76 stations in this area do that. Hide the fact that the big display sign is cash only.

  • Cybrsk8r

    The Costco scenic tour of America. For some reason, I think that’s hilarious.

  • technomage1

    I prefer to pay cash for gas – especially after getting ripped off after using a credit card once – but what irks me is the prepay policies a lot of stations have. I have to go in, wait in line, guess how much it’s going to be, fill up, then go back in for my change. With gas being so expensive its difficult to stop on the dollar anymore.

    I get why stations do this – but it’s still annoying to have to waste my time due to the actions of thieves.

  • Carver Clark Farrow

    lol. I’ve had a few clients like that :(

  • Carver Clark Farrow

    You make a good point about everyone paying the same, except they don’t really. (How’s that for giving and taking away in the same breath ;-)

    I use my Safeway club card to get a discount on my groceries. I give the grocery store my buying habits which ultimately is good for them, in return I get a cash discount on my groceries.

    Major companies and associations negotiate travel discounts for travel. They reduce the hotel’s cost of obtaining business, and the hotel returns the favor.

    Elite level travelers get freebies like breakfast that everyone else pays for. So, I think there is precedent and good reason for differential prices.

    Regarding the car registration surcharge, the government exempted itself from the no credit card surcharge.

  • Carver Clark Farrow

    I went to Del Taco near work (Yes, I admit it). They now have a $0.35 charge for using a debit card. I don’t know if its legal, but they charge a $0.35 surcharge on all meals and give a $0.35 discount to everyone who pays by any means except signature based debit card.

    I guess that’s to comply with the no surcharge law.

  • Carver Clark Farrow

    I’m tend to be lean towards less regulation, but I think one of the best justifications for government regulations is disclosure laws. That’s the only way a customer can make an informed decision. The landscape is too skewed otherwise.

  • Carver Clark Farrow

    Alas, much of our business transactions are influenced by the actions of criminals, and those costs are passed on in higher prices. It’s why businesses run checks through machines, require ID, take fingerprints, etc.

  • EdB

    Debit card transactions are not signature based, but PIN based. If you sign when using a debit card, it is being processed as a credit, not debit.

    While I understand the logic you used to explain how they might be getting around the law, because it ends up as a charge on the total and not per item, I still think they are in violation of the law.

  • emanon256

    I agree, there are a lot of those variances. What I mean is as far as an advertised price, if someone is paying by check, cash, or charge, I believe strongly they should all be charged the advertised price.

  • Carver Clark Farrow

    What do you mean a debit card (eg. Visa Debit) is not signature based? I have a long letter from Paypal explaining that my debit card is both PIN and signature and that I only get my 1% cash back if its processed as a signature based transaction.

    Am I missing something?

    And yes, I agree that the Del Taco’s actions are almost certainly pretextual, but I haven’t researched the law well enough. It may very well be legal because discounts are allowed, even though its the same thing.

  • Carver Clark Farrow

    But do you object to a business saying say 5% discount on advertised prices for cash payment? I suspect not. But I might be wrong.

  • emanon256

    Not as much as long as the advertised, labeled-price is the pre discount price. But if they are then marking everything up 5% I still see it as a money grab as the credit card processing fees are all less than 5%.

  • Carver Clark Farrow

    lol. The 5% was just an example.

    But the larger point remains. We still end up with a two tiered system. One price for cash, another for credit. There is no fundamental difference between

    Credit price $100, Cash price gets 5% discount


    Cash Price $95, x% surcharge (to make it $100)

    except of course the presentation/advertisement. My question is why is #1 acceptable but #2 a money grab?

  • EdB

    There are debit cards that are not co-branded with credit card companies like Visa or Mastercard and can only do PIN transactions. For the cards that are, you have an option of using PIN or signature. The method you use determines how the card is processed. They go through two different systems. The reason you only get that cash back if processed as a signature is because it goes through the system where they charge the merchant a greater processing fee. When done as a PIN transaction, it doesn’t go through Visa or the other issuer’s system.

  • Carver Clark Farrow

    Do they still have non-cobranded cards? I see the disconnect between our posts. II haven’t seen one in 15 years.

    As far as cash back goes, it’s the other way around. You cannot get cash back if its processed as a signature based transaction. That would be cash advancing and prohibited by cc companies (unless you go through the cash advance process). You can get cash back if its processed as a PIN transaction. It’s basically a simple ATM/POS transaction at that point and infinitely cheaper for the merchant.

  • EdB

    Non-cobranded cards are still available but from what I have seen, you have to ask for one. It seems like most banks give the co-branded ones by default.

    When using a PIN, it goes through the ATM network like Star. If you look on the back of your Debit card, it will show all the ATM networks it is valid on. Not all card processing services support all networks. Most do so it isn’t a problem like it used to be when debit cards were first introduced.

  • emanon256

    Well, in reality I don’t like either option. However if a business doesn’t change anything and decides to give some customers a discount if they pay cash, their advertised price is the highest one is expected to pay regardless of how they pay pre tax, and people can decide based on this price. I see this as passing on a potential savings.
    In the second example I don’t like that the business is advertising a lower price, and then charging more after the fact. I find that deceptive. Also, in the second example, the business is passing on a cost to certain customers and not others, based on how they pay. I find that to be inappropriate in my professional opinion.

  • TMMao

    That would enable one to drive from coast to coast and not see anything of value.

  • technomage1

    Wouldn’t it be nice if gas pumps could be programmed to stop at $X? Say I only want to put $35 in. Why can’t I program the pump to stop at $35?

  • EdB

    They do if you prepay.

  • m11_9

    Like the people who say they park their campers at WalMart.

  • sunshipballoons

    Every Arco I’ve ever been to has prominently displayed the fee on the pay machine before you put your card in.

  • David Sugerman

    There is a class action in Oregon for debit card fees charged at Oregon ARCO stations. Notice and information here: https://www.arcobpdebitcardclassaction.com/ (I am class counsel.)

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