When is a gas station not a convenience store?

What’s the difference between a gas station and a convenience store? It may not matter to you, but it does to Marilyn Nenninger. And to me.

Nenninger, like thousands of other Costo customers, endured a credit-card switchover and had to sort through the resulting confusion. The biggest question for her: What kind of a rebate would she receive on gas purchases? But this consumer problem has a happy ending, and it’s the best kind of happy ending.

Elliott Advocacy is underwritten by Sodexo North America. Sodexo North America Sodexo North America is part of a global, Fortune 500 company with a presence in 80 countries. Sodexo is a leading provider of integrated food, facilities management and other services that enhance organizational performance, contribute to local communities and improve quality of life for millions of customers in corporate, education, healthcare, senior living, sports and leisure, government and other environments daily. Learn more at Sodexoinsights.com.

Costco ended its credit card agreement with American Express earlier this year and switched to a Costco Anywhere Visa by Citi.

“I know that the switchover was a mess for some people, but we were lucky enough not to be one of the screw-ups,” she says. “The new card promises some very nice cash back rewards — among them, a 4 percent rebate on gas and 3 percent on eligible travel. ”

Nenninger first checked the specifics of “eligible travel,” because she had been discussing a couple of vacation trips. It seemed reasonable to her.

“Then, I looked up the specifics on the 4 percent gas rewards, and it raised an eyebrow,” she says.

Here’s what she found:

Earning Costco Cash Rewards on Purchases: You’ll earn Costco Cash Rewards for purchases using your Card Account, minus returns and refunds, as follows:
4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year in gas purchases and then 1% thereafter.

Certain Non-Qualifying Purchases. You will only earn 1% cash back, not 4%, for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco, or for fuel used for non-automobile purposes.

That’s where things got tricky.

“Almost every major-brand gas station in my area has some sort of convenience store on its premises,” she says. “The cheapest place closest to us to purchase gas is on the premises of a supermarket (Shop ‘N Save), which is supposed to be disqualified for the 4 percent cash back under Citi’s terms.”

So that left her with a big — and unanswerable — question: What’s a convenience store?

She emailed Citi. She waited two weeks. Silence.

“Then I looked at your website and got some contacts for Citibank,” she says.

An assistant to Brit Simon, Citi’s senior vice president for customer experience, called her the next day.

“After a little phone tag, I spoke to her she explained that participating merchants are coded for rebate purposes. She went in and looked at our most recent Costco Anywhere Visa card statement, and saw that our gas purchases were made at either a QuikTrip or Shop ‘N Save. She assured me that both were classified as gas stations, and both would generate a 4 percent rebate on gas purchases using this card,” she says.

I love stories like this. Not only did our executive contacts at Citi work, but Nenninger also showed that sometimes, the most effective consumer advocate is you.

Now, I can’t resist adding a cautionary note to this story: Credit cards that encourage you to spend more may be habit-forming. But I would much rather see my dear readers use a card that offers cash back, even with Citi’s restrictions, than collecting scammy loyalty points. But as you might say, that’s beside the point.

Nenninger did this on her own, and I’m happy this site could play a small part in the resolution.

Oh, what the heck. I can’t resist.

Which is scammier?

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27 thoughts on “When is a gas station not a convenience store?

  1. Neither card is scammy. Collecting points is not, always, scammy.

    We have ticketed (used 5) 7 small town west coast to big city east coast Milage Plus tickets on UAL this year alone. Always found convenient flights, never a glitch. Of course, I’m Million Mile UAL, which is another scam, per Chris.

    1. I agree.. I think it’s all a matter of what you as the consumer need, will use or may get the best benefit out of. In some cases, points – while a non-cash item – may in fact be of the best overall value to you… in other cases, that may be cash. I agree that cash would come with the fewest exclusions or limitations, but that would usually also mean that cash would be the most ‘expensive’ reward/redemption from the programs perspective..
      I also think that a key part here is understanding what the points (if you elect to go that way) are good for, restrictions, and other important program rules.. cash largely avoid all that.. so, yes, cash is ‘easier’, but that ease does not translate into cash being the ‘better’ redemption avenue.

        1. It varies, but one United mile can be worth as much as 2 or 3 cents (i.e. 2-3% if getting one mile per dollar as with the Mileage Plus Explorer card). Add in the fact that one also can earn United miles by other activities such as dining, renting a car, shopping online (even if you pick up your purchase locally later that day) and even flying, of all things, and I believe that collecting United miles is worthwhile. I know that Mr. Elliott strenuously disagrees, but that’s my experience. My wife and I have taken a number of nice vacations with miles so obtained. Your mileage may vary (to coin a phrase).

          1. Ok, but I get 1.75% cashback on my credit card (whether flying, dining, renting a car, etc.) and I can spend that cash on anything, not just travel. How could the more limited points be better than cash?

          2. IF you travel a lot on your own dime, the points do come in handy. I get more points per dollar spent than cash back equivalent with the specific cards I have.

            I have a cash back credit card (or two) that I use for all my daily purchases as well as one mileage card I put all my travel related expenses on. Combining them, I get great vacations every year as well as fly my mom and brother where they need to go at no additional cost to me by paying for the air and hotel with points and the other costs like meals with the cash back I earned.

            Each year I look at the expected value received from each card. If my actual travel goes down, I will probably eliminate the miles card and focus on cash back.

          3. Because, sometimes and I emphasize sometimes, the points are worth more than 1 3/4 cents a mile. I want to go to Europe. The airlines charges $4207 for a round trip ticket. I can normally purchase (not earn) those miles for $0.035 a mile. 50,000 miles (saver award) comes out to $1750. Even if one has to pay 100,000 miles (standard reward) for the trip, that comes out to $3500, IS that cheaper than your paying $4207 for your ticket and using whatever 1.75% of cash back you earned towards that price? There are lots of trips where airlines charge $4000 or $5000 for a business class ticket but you can fly on them with miles for 50,000 to 100,000 miles. This is just a case in point.
            But, it whatever works better for you the card holder and what you want to use your rewards for. Sometiemes people prefer cash back and sometimes they prefer miles or points.

          4. I hear you. But given the possibility of the miles being devalued, of flights not being available at times convenient for me, I’d rather have the cash.

          5. Not really, because I can choose to drive rather than fly, or not travel at all and use the money to pay the cable bill.

          6. I use my various points only for international business class flights and have never had a purchase where the points were worth less than 4 cents. Many trips were in the 6 cents or more range. Of course, I have a lot of flexibility in my travel so I can hunt out these bargains.

        2. Upgrades from coach to first class on an airplane. A $450 hotel room for 35K loyalty points. A hotel suite at the cost of a standard room. The list is endless.

  2. So where can we get a list of which gas stations are 4% and which are 1%. If QuickTrip(is that the one in GA & MO or the one in WI?)is 4%, does that mean WAWA, Sheetz,etc, are also?

        1. The level has nothing to do with the percentage. It is, or should be, strictly based on the Merchant Category Code (MCC) sent in at time of purchase by that merchant. So if they send 5411 instead of 5542 or one of the other fuel codes in the authorization message, you are out of luck.

          Only Citi can state definitively. It is completely up to them.

      1. I just tried that. I’m one mile from a gas station/convenience store, part of a large local chain. They all accept Visa, but this page only locates about half of them. They don’t locate the three closest to me.

        Not so handy…

        1. The merchant has to give Visa permission for them to be included in the list. Probably costs them something to have that happen.

  3. I’m confused why either is “scammier”…. it all depends on what you, as the consumer, need/want/decide is best for you. I’ve used points for tickets. I’ve gotten cash back in the form of gift cards that were a nice “gift” for making purchases I’d have made anyway. How is either of those, in any possible way, a scam? I really don’t get the antipathy.

  4. Re: 3% back on Travel. We asked why our Amtrak tickets charged on our Costco Citi card did not earn 3% back on travel. They nicely told us, “Sorry, Amtrak tickets do not qualify.” Like the gas, 3% back on eligible travel. Like cruises booked through Costco Travel. Not sure if other cruise OTAs qualify. We’ll see!

  5. I find it interesting that gasoline purchased at a grocery store’s pump is not gasoline purchased at a grocery store. Would you have to drive inside the store for it to be disqualified?

    I’m going to have to brush up on my Zen koans before I use the Citi rewards card…

    1. Stores Can program (different registers/credit card readers) to send different Type codes to the Credit processes, So the Pumps are setup as Gas Station, Inside as (Grocery or Pharmacy)

      Not 100% sure on this but I think @ Walmart the Registers on the food side are programmed as grocery, the ones on the “Other Side of the cigarette area” as household. The One back in Sporting Goods as that, Electronics … Since when I see them on my statement they seem to vary by where I charge thigns.

  6. I could not vote as by doing so I am agreeing that all credit card programs are scams. Yes, some could be but not all. Marriott Rewards are straight forward, you earn points for purchases and how many for what purchase is clearly spelled out. If you travel redeeming them is easy and also straight forward. Southwest is another credit card where you earn points with clear rules – and one of the best for airlines in redeeming your points. All credit card programs are not scams.

  7. Neither one. Why do you think they’re scammy? The only scam is when people don’t understand the terms of their credit card. Cash back is great, loyalty points are great, but only to people who can read and understand the terms.

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