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Cash or Credit: Disparity in Cash versus Credit Prices at a local gas pump

Discussion in 'Off-Topic' started by BvBPL, Mar 30, 2012.

  1. BvBPL

    BvBPL Pour Decision Maker

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    Near my house is gas station that offers different prices for credit card and cash purchases. The credit price is six cents a gallon higher than the cash price. At the cash price, their gas is among the cheapest in town, often only challenged by a few other places that charge more for credit card purchases or cash only places, and even when paying by credit card it is still relatively inexpensive. For a long time, the big sign they have at the corner of their lot showing the day’s price for regular 87 octane gas listed the cash price, but they changed it to the credit price and said “six cents off when you pay with cash.” When I asked the employees about this change, one told me that had received complaints about the advertised price being “incorrect,” and had received at least one threat of a complaint to our AG.

    In such a situation, what do you think the right price is to put on the big daily price sign? Cash or credit? It seems to me that cash is more accurate and perfectly valid and that the price discrepancy is an upcharge for the use of the charge card. But then more people do use their credit cards in paying for gas than cash.

    More generally, what do you think about merchants that offer different rates for cash versus credit card purchases? Have you ever tried to negotiate a lower price based on payment in cash instead via credit card (or check)?
     
  2. kochman

    kochman Chieftain

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    Most companies actually list the credit price... and on bigger purchases, if using cash, it is worth the time to bargain for that difference. Some places will act like the difference isn't there, but it is...
    Generally, they will knock of like something, and every little bit counts.

    I used my CC for everything, because I use an airmiles card to fly for free to places... I figure it comes out in the wash.
     
  3. Core Imposter

    Core Imposter Chieftain

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    Use of the plastic costs merchants fees.

    If you list the cash price you are getting into the realm of false advertising, in spirit if not in law. Good business practice to list the high price. Good business price to accept the cash and skim it.
     
  4. kochman

    kochman Chieftain

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    Sneaky to not make consumers away of the difference and gladly take the credit price when accepting cash...
     
  5. timtofly

    timtofly One Day

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    What is the effect on those who are now being forced to use only a debit card, much less a credit card. They told me that to them the debit card runs the same way as credit and they are charged a fee.

    Who carries around $50.00 to $90.00 worth of cash just to put gas in their car?

    One is forced to just put in a little gas, more often, or stop at an ATM, pay the fee there and use the cash for gas or just pay the extra for the credit price at the pump.

    Or "free market" it, and avoid that gas station altogether.
     
  6. warpus

    warpus In pork I trust

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    Yeah, small businesses really get hit hard by cc merchant fees.

    They should list the cc price, cause that's probably what most people use? Here in Canada most people would use a debit card, not a credit card, not sure how that fits into the equation here
     
  7. BvBPL

    BvBPL Pour Decision Maker

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    I do (although my car only takes about forty bucks to fill it).

    Cash is just better in a lot of situations. Cash is a better means to provide tips to waitstaff and delivery people. Cash isn't traceable, which is nice if you don't want your significant other to figure out what you are buying. Cash is the only acceptable means of payment for a variety of goods and services that are outside of the larger merchant economy, from paying a kid to shovel your snow to slipping the maitre d' a twenty for a table, from buying something off of Craig's List to engaging in the black market.

    Plus, cash is just faster for a point of sale transaction. How many times have I been behind someone in the green grocery who only has five items but spends five minutes getting her card out and running it through, etc?

    And if you're going out to dinner with your friends and are going to split it, why aren't you carrying cash around? That's the only good way to split a bill.
     
  8. kochman

    kochman Chieftain

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    I disagree here... that same lady takes just as long to get out the cash, especially when dealing with "I think I have a dime"...
    Credit card, swipe and done at many places... way faster.
     
  9. Core Imposter

    Core Imposter Chieftain

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    The whole credit /debit card evolution is, as you know, part and parcel of the grand scheme to encroach upon and eventually strangle the liberty of the people.

    You should be every bit as enraged every time you see a card as you are whenever you notice one of their spy cameras.
     
  10. LucyDuke

    LucyDuke staring at the clock

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    IIRC, the CC merchant agreement doesn't allow merchants to add an extra fee for plastic payments. The advertised price has to be the plastic price. The only way they can give a cash discount and stay within the terms of their plastic agreement is to do that - give a cash discount.

    (Same agreement prohibits minimum purchases, too, as far as I know, but we see how effective that rule is.)
     
  11. LucyDuke

    LucyDuke staring at the clock

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    I am. They're worse than the government. :mad:
     
  12. illram

    illram Moderator Moderator

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    In CA you have to show both on the big sign, otherwise it is a bait and switch and technically illegal. However they get away with it all the time, or do other sneaky things to get around it, the limitations on which I am only vaguely familiar with.

    I basically now just remember which gas stations do this and which ones don't, it is usually the cheaper ones like Patriot and so on.
     
  13. ghostmaker650

    ghostmaker650 Chieftain

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    Some places like arco advertise the cash price, but charge you a .45 cent fee when using your card. Outrageous if you ask me.
     
  14. Zelig

    Zelig Beep Boop

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    This is true, however, I don't know the case in the US, but the Canadian federal government specifically passed laws a couple years ago allowing extra fees to be charged for different methods of payment.
     
  15. rugbyLEAGUEfan

    rugbyLEAGUEfan Chieftain

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    There is an interesting alternative to this in the motor industry . One of the most common things I hear at work is "What's your best price since I'm paying cash?" (bank cheque , direct deposit , folding cash etc) . The implication being that there will not be the hassle of car finance .

    In fact , the cash customer is less valuable than the customer that takes out finance from us in our capacity as an agent for the bank . The dealership gets a commission for selling the loan .The bigger the borrow and the higher the rate , the bigger the commission .

    Now it is illegal in Australia to insist that we will only sell a car at a certain price if the customer takes our finance . However , 95% of the time it's easy to establish whether the customer will use our finance . If I am confident this is the case and the customer is driving a particularly hard bargain , I may sell a car at cost or even a small loss if we are making money on the finance . The finance department sends a portion of the commission my way and the deal is done .

    I wouldn't sell a car at such a low price to a cash customer. 5% of the time I'm wrong and just have to take my medicine .

    Obviously this differs to the situation in the OP , but when it comes to the outright price of goods , cash is not always king . Of course the finance customer accrues the interest over time , I just thought you may be interested to see how this can work .
     
  16. Bestbank Tiger

    Bestbank Tiger Chieftain

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    You're right. Basically a cash discount has to be under the table. If the credit card company finds out they might cut off the merchant.
     

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