Credit card terminal on a gas pump.
Whether or not to use paper or plastic for purchases isn’t a tough decision for most of us, but if you’re a gas station owner, you might disagree. They’re being crushed by the numbers and have begun finding new ways to break even, including credit cards. At some stations around the country, there is no longer a choice to use paper or plastic; it’s all about the green and if you don’t have it, you might be running on fumes.

Gas stations are finally reaching a breaking point over high gas prices; many of which are barely breaking even on gasoline sales. Alternative ways to increase; or, as it is in most cases, simply maintain minimal profits on gasoline sales are being tested every day. There is however, one universal method that has one station owner in West Virginia going retro.

Robert Randolph has decided that credit cards are unfavorable of his profits. Most of us know that credit card companies charge fees for purchases made using a credit card, and the combination of high gas prices and, an increase in the use of plastic to pay for it, have made some owners aware of just how much those fees are.

It’s called an interchange fee, and it is the price a storeowner must pay to accept credit cards as payment.

The fee is a percentage of each sale; many of us have been denied paying with a credit card for not meeting the minimum purchase amount, and it’s because the owner needed to clear the merchandise cost and the interchange fee for the transaction. The percentage is fixed in most cases, staying just short of two percent, but with gasoline topping $4 dollars a gallon, the measly 2% is adding up.

Jeff Lenard, of the National Association of Convenience Stores in Virginia, reports that in 2007, storeowners paid in excess of $7 billion dollars in credit card fees, while making just over $3 billion in profits.

Mr. Randolph is one of a few who have taken extreme measures, putting up signs on his pumps stating that plastic will not be accepted for gas. He says, “We’ve got generations of customers who come in here” and that “Most of them have accepted it.”

It’s news that the retail providers of gasoline are being affected just as much as consumers are, and just as savvy consumers are searching for new ways to minimize the use of gas in their daily lives, the storeowners are going to continue to seek relief wherever they can find it.

—————————-

Now it’s worth noting that the higher prices climb at the pump, the more we all need to come together and develop solutions to our problems. That’s right folks, our problems. You see, most gas station owners already charge around 10 cents a gallon for their own profits, and as the gas price increases so do the credit card fees associated with paying at the pump; something we all do almost every time we buy gas.

Station owners, due to the increase in fees, now have to either add more pennies per gallon to account for the fees, or accept a reverse in profits. It has been reported by the Associated Press that some stations are giving discounts to cash customers to encourage more people to leave the Visa at home.

The idea here, generally, is that it might be time that we all take the extra minute and pay inside with cash when we buy gasoline. Sure, paying at the pump is a great convenience, but at what cost? The credit card companies contend that their high fees are just the cost of doing business. In addition, Visa says that the fees are outweighed by the convenience of paying at the pump. Well, I say that if we do without that little gift of time and effort, then we can all save a little extra dough.

It’s simple really, we save the station money on credit card fees, and they in turn reduce their price for gas by a few pennies and still make a profit. Let’s just say your car takes 14 gallons of fuel on each fill up, and that this would result in a 3-cent discount at the pump, which seems to be a minimum at this point. That means you would save about 50-cents per fill-up. Most small and midsize cars have a fuel capacity of 14 gallons, while most trucks and SUV’s hold between 16 and 25 gallons of fuel; so no matter what you drive, unless it runs on a battery, you’ll stand to save some money by paying in cash regularly.

I know it’s not much, but that’s what the oil companies said a few years ago when they first hit $1.50 a gallon, “Don’t worry, it’s not much, people won’t complain for long.” Look at how well that has worked out for them so far, by saying “it’s not much” each time they raise prices, they have now more than quadrupled the price of gas since 2000. And we didn’t even really get mad about it until we could buy a pack of cigarettes for less than one gallon of fuel.

Just think about it.