Gas Stations more and more are giving discount for paying cash

[BrokeinMD]

I'm seeing them pop up more and more in Maryland...Liberty Gas Station, Free State... 5 to 10 cents cheaper a gallon paying cash. While it's a slight nuisance to run inside and pay up front, it's nice to pay for gas at $3.01 or $2.99 a gallon. I commute 100 miles round trip to work every day, so every cent less counts for me. I maxed out 3 gas cards before BK during the oil crisis, so I'm happy to see not having gas cards being a benefit to me right now.

My New Year's goal is to learn to live cheaper. Now if I could only learn the art of coupon clipping....

[frogger]

I'm seeing them pop up more and more in Maryland...Liberty Gas Station, Free State... 5 to 10 cents cheaper a gallon paying cash. While it's a slight nuisance to run inside and pay up front, it's nice to pay for gas at $3.01 or $2.99 a gallon. I commute 100 miles round trip to work every day, so every cent less counts for me. I maxed out 3 gas cards before BK during the oil crisis, so I'm happy to see not having gas cards being a benefit to me right now.

My New Year's goal is to learn to live cheaper. Now if I could only learn the art of coupon clipping....

The cash discount was everywhere up until a few years ago, and then it just sort of vanished. However... I have seen 2 places in my area start back with the cash discount again. 5 cent per gallon cash discount. And that means CASH, not a check or a debit card.

[MSbklawyer]

These "cash discounts" are the result of the federal regulation that prohibits merchants from imposing an extra charge to accept credit cards. When you use a credit card to make a purchase, the credit card company (read "banker") charges the merchant a fee (anywhere from 2 to 6 percent of the purchase) for processing the transaction. Thank you very much.

See, long long ago, when dinosaurs roamed the earth and I was starting my first year in law school, merchants said "fine, we'll accept credit cards, but we'll pass the expense of the transaction fee along to the user of the credit card so that we won't have to raise all of our prices to cover those costs." That's fair, right? The person who gets the convenience of using a credit card pays for the expenses of using that convenience? Seems fair, right?

Not to the credit card companies (read "bankers") it didn't. So, what did the credit card companies (read "banks") do? Did they try to lower their processing fees to make them competitive? Nope. Did they offer the merchant other incentives to make these transaction fees more palatable? Not a chance. These are bankers. 'Competition' and 'free-market survival of the fittest' and other such rough-and-tumble principles are for the commoners and other such non-desirables. These are bankers; bailout recipients, don't you see? No, instead they went whining to their BFFs (that's "Best Friends Forever" for non-hip among you) at the U.S. Treasury (read "BIG bankers") who promptly passed a treasury regulation that prohibited merchants from imposing extra fees for credit card transactions.

So, merchants complied and adjusted their prices to account for the expenses they incurred as a result of those processing fees. For a long time we went along that way where everyone paid for the convenience of using a credit card whether they used one or not. The credit card companies (read "bankers") were once again fat and happy and the commoners were giving them money with every transaction they made and they didn't even know it. All was well.

Then, some smarta$$, probably a Southerner, went down to the local library and dusted off a copy of the aforementioned treasury regulation and realized: "Hey!! It says that I can't impose and additional charge for credit card purchases or they'll send down the federal goons (read "bankers") to get me. But it don't say nuthin' 'bout I can't give discounts to my customers who purchase with cash!" And thus, the 'cash discount' was born. You're welcome.

With gas prices above $3 and headed to $4, you'll see this most often at gas stations. That's where it's most noticeable. At $3.50 per gallon, a merchant can lower his gas prices by 10 to 12 cents per gallon if he doesn't have to pay the credit card companies (read "bankers") their fee.

So, now that you know the history of the "cash discount", I hope that you'll have the good sense not to use it. Fifth Avenue apartments with mahogany walls, oriental rugs, private planes, caviar and island resorts and other banker "necessities" are all very expensive and if you avoid paying that extra dime per gallon, why, then the credit card executives (read "bankers) might have more trouble affording them. You wouldn't want that would you?

[frogger]

So, now that you know the history of the "cash discount", I hope that you'll have the good sense not to use it. Fifth Avenue apartments with mahogany walls, oriental rugs, private planes, caviar and island resorts and other banker "necessities" are all very expensive and if you avoid paying that extra dime per gallon, why, then the credit card executives (read "bankers) might have more trouble affording them. You wouldn't want that would you?

Come on, tell us how you really feel...........

[Freddy03]

Walmart Neighborhood Market offers 4 cents off per gallon if you pay for gas using a Walmart gift card. I buy a gift card when I do my grocery shopping and then get gas.

[AngelinaCatHub]

I'm a kind hearted person. What's wrong with a bit of caviar and a fine wine? Everyone deserves a break like a few million dollars of my tax money. I'll just stay happy with my chips and beer and review my IRS deficit payments and go happily on paying the 5% more so that I don't have to walk those extra 30 feet so I can maintain my fat, happy, and dumb state of mind. (sarcasm I hope you believe).

Too bad most "Americans" have no idea the working over our Government is giving us for about 500 Congress Politician can "MAKE LAWS" for our 'own good'. We be to dumb to know what to eat, what car to buy, or what insurance we want. Sooooon the Revolution. 'Hub

[frogger]

Sooooon the Revolution. 'Hub

[BrokeinMD]

Now the beer companies have to offer discounts for paying with cash, huh HuB? LOL!!!! I hope more gas stations follow suit, followed by American Merchants. I'm all for it. And, I'm thinking about cutting a hole out of my mattress and floor next....

[MSbklawyer]

I'm a kind hearted person. What's wrong with a bit of caviar and a fine wine? Everyone deserves a break like a few million dollars of my tax money. I'll just stay happy with my chips and beer and review my IRS deficit payments and go happily on paying the 5% more so that I don't have to walk those extra 30 feet so I can maintain my fat, happy, and dumb state of mind. (sarcasm I hope you believe).

What they need to do (and they had these years ago) is make gas pumps so that you can pay cash at the pump -- like the self checkouts you see at some Wal Mart stores and like vending machines that accept bills. You'd put your 'Benjamin' into the machine, pump your little car full of 'liquid gold' and be on your way. Sans the banker's fee.

.
.
.

What? You thought you were gonna get change?

[Pandora]

Then, some smarta$$, probably a Southerner, went down to the local library ..........

giggling quietly

[RichM]

What they need to do (and they had these years ago) is make gas pumps so that you can pay cash at the pump -- like the self checkouts you see at some Wal Mart stores and like vending machines that accept bills. You'd put your 'Benjamin' into the machine, pump your little car full of 'liquid gold' and be on your way. Sans the banker's fee.

.
.
.

What? You thought you were gonna get change?

Actually, many supermarkets around here offer self-service aisles that do accept cash (in addition to cards) and do give change. Some will even give cash back if you ask for it and are paying with a debit card. I rarely use these aisles unless the cashiered lines are waaaaay too long, simply because I figger if I'm going to save the store money on their payroll, then I want a piece of the action in the form of a discount for doing so. Otherwise, I'll wait and let a cashier ring me up just to spite the greedy bastards for keeping my piece of the action.

But that's besides the point. The point is that the technology to accept cash at the pump exists, and I think it would be nice if gas stations adopted it. BUT, remember that gasoline cards nowadays are issued by banks, who make money every time you use the cards; so to them, pay-at-the-pump is really just an inducement for you to use their cards. Most of the gas cards I've had rang up the gas at the cash price at stations with the same brand as the one of the card, even if the card itself was issued by a bank.

Hence, I doubt that we'll come across gas pumps that accept cash any time soon. The banks would make less money, and we all know that's never going to happen if they have any say about it.

Independent gasoline stations would also suffer if the pumps accepted cash. The retail markup on gasoline is so low, and the competition so intense, that many jurisdictions (including my own New York City) have laws specifying minimum gas prices, generally defined by an amount above retailer cost. In NYC, the last time I checked, it was six cents. In other words, the retailer isn't allowed to charge less than six cents more than he paid for the gasoline -- and six cents above their cost is what most retailers charge, especially in neighborhoods with multiple, competing gas stations. (In neighborhoods like mine that have only a few stations, or in the boondocks north of the city or way out east in Suffolk County, the gas prices actually tend to be a little higher due to less competition.)

Obviously, at six cents a gallon markup or thereabouts, gasoline retailers aren't exactly raking in the dough. In many cases, they actually lose money on gas, once all the overhead costs are factored in. They make it up on repairs, cigarettes, or whatever other stuff they sell or services they provide. Pay-at-the-pump throws a wrench in that. If you have to go into the store to pay, then there's a chance you may buy something there. Even if it's just a Pepsi, chances are that the retailer made more money on your non-gas purchase than your gas purchase.

I know one enterprising dealer out east who has a sign posted prominently on his pumps that says, "Coffee, Snacks, Cigarettes, and Clean Restrooms Available Inside." Parents traveling with children see the sign while pumping their gas, and ask the kids if they have to pee. The kids nod their heads and run into the store; and next thing you know, mom or dad is buying snacks and replacement liquids for what the kids just peed out. I often wonder why more gas stations that provide rest rooms don't use the same trick.

-Rich