Visa and MC not helping at pump

Yep, I'd pay cash if they made it worth while, as it is here, the credit card price is the same as cash, but I get 1% back on the credit card. I don't think they can legally charge less for cash in my state. Has to be the same price as cash. I'm supposed to get 5% back on gasoline and restaurant purchases but the way the cashback points are calculated I'm not able to determine if it's 5 or 1 percent. And at the price of gas it's hard to stop the pump on a round number anymore, credit cards make it easy to deal with that problem.

The Shell station I use in VT advertises 19 cents *OFF* if you use your Shell Visa card!

The problem is not the 2%, that is built into the price, it is that Card users are not coming into the store to pay $6 for a pack of cigarettes, a six pack of bottled water or a Lottery ticket. ;)

Actually, the killer sticks are $8 a pack in NYC.

The 2% fee is not built into the price of the fuel. The difference between what retailers pay per gallon for fuel and the price that they actually charge has not gone up much in recent years, while the fees that they pay to the credit card companies have gone up about 6 cents per gallon from when the price of fuel went from $1 to $4 per gallon.

Jeff

I don't think state laws ban charging different prices for credit cards and cash. Rather, the agreements with the credit card companies say that the price for cash and credit has to be the same.

ExxonMobil gives 3% with their Mastercard at Exxon and Mobil stations. Shell and other oil companies have similar rebates as well as does Discover (similar idea, but different percentages).

Jeff

Sounds like the gasoline retailers are getting hit with the processing fee pretty hard.

I use an American Express business card and its 5% back (and hard to check, I agree). Here gsoline is 4.70 so rebate is 23 cents - more than margin on gasoline I'd imagine. So someone is taking it in the shorts. I was in Wasington and Oregon and majors up there are under 4.30

Ron in Ca

Here in NJ there are now gas stations charging extra for credit cards, a recent development. For a long while I never bought at Exxon, Texaco and the others that did this. It certainly was not a cash discount, it was a CC surcharge, as the price advertised on the poles in competition with the other stations was the cash price.

Now I need to pay attention to this all over again. Would you go to a restaurant that charges you extra for using a card? Tomes

I thought it was credit card agreements between the merchant and credit card processing company. Apparently, it is also franchise agreements. Like the oil companies effectively require gas stations selling their gas to accept credit cards. (Like McDonalds might require their stores that are franchises to accept credit cards.)

Why should I pay a higher cash price so that someone else can use a credit card? In other words, why should I subsidize a credit card user? After all, it costs about 2% for a merchant to accept credit cards?

Personally, I think of credit cards as a 1 to 2% tax on some parts of the economy, like grocery stores, gas stations and other types of transactions.

Jeff

Credit card fees can add up to a lot of money, but of the 2% fee that is charged to the merchant, about 1% goes to fraud write-offs by the credit card company. I can guarantee you that any business that accepts credit cards or checks is going to incur at least a 1% fraud rate. If you don't think there is fraud in a business that does a lot a cash transactions, you are fooling yourself. In addition, there are a lot of expenses of doing an all cash business, such as security, cost of keeping large amounts of change on hand, etc.

When a merchant gets an authorization code from a credit card, then they are off the hook even if the card is stolen or fraudulently used. About 1% of the 2% fee goes toward processing expenses incurred by Visa/MC and the credit card processors (banks who issue the card or a 3rd party processor that the bank uses).

For the 2% fee, the merchant gets access to their money in 1-2 days.

The 1% fraud rate does not include write-offs for bad debts (legitimate charges by people who default on their payments). These bad debts are largely financed by those who pay over time and get charged a fairly stiff interest rate (based on their credit rating).