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Card companies take a percentage of sales from stations. As gas prices continue to soar, consumers may have to bear more of the costs.
NEW YORK (CNNMoney.com) -- Buying gasoline with a credit card could be hurting your local independent gas station owner - and you may have to pay for it.
no difference, but margins at mcdonalds are much higher. local gas station operators make pennies on the gallon and in the current gas market, they have to cut into their meager margins to attract customers with lower gas prices than the guy next door.
some gas stations around me have posted cash prices and credit prices recently because of this.
arco does not accept credit and makes you pay the 50c it costs to do a debit transaction in exchange for gas prices that are generally lower than other major brands.
to offset this, gas stations are relying more and more on food marts, auto service, and car washes(best margins) to make tangible profits after expenses.
ultimately if this keeps up that is what is going to happen and its going to lead to lawsuits from the creditcard companies(who are extremely powerful) for unfair business practices eventhough it isnt.
ultimately if this keeps up that is what is going to happen and its going to lead to lawsuits from the creditcard companies(who are extremely powerful) for unfair business practices eventhough it isnt.
1. I've seen this for many many years....I've also seen it in industries other than gas.
2. No idea what your timeframe is that they will wait before starting to sue but it's already been a while.
3. Sue <> win
sue doesnt mean win, but lawsuits like it(and the temporary injuctions that come with it) hurt the consumer in the longrun. someone has to pay for it, and it isnt going to come off the profits alone. and its the type of thing that companies will fight against(either in court or through public opinion which would lead to court) because it goes against the status quo.
the thing is that alternate pricing isnt widespread at major companies in any general consumer industry. what will happen is that if this becomes more widespread, other consumer industries will look into it. imagine if grocery stores started doing this, department stores, walmart, costco, etc. the whole industry for credit would take an enormous hit, which is why they would be leery towards allowing the status quo to change without some type of campaign to keep their viability intact(the main selling point now is that it brings in more customers to offset the cost). whether or not they could make a successful court case, the situation could have a lot of potential to hurt the consumer in the long run(most obviously through increased CC APRs and/or CC membership and useage fees)
ultimately if this keeps up that is what is going to happen and its going to lead to lawsuits from the creditcard companies(who are extremely powerful) for unfair business practices eventhough it isnt.
There's a difference between a credit card and a charge card. A charge card is readily identifiable because it has no logo for VISA or MasterCard (or any other banking entity). Examples of a charge cards would be JC Penny Card, Sears Card, Kohl's Card or any card issued by merchant, including oil companies (that does not have a VISA or MasterCard logo). A charge card is a two-way relationship between you and the merchant. Buying on credit is something people have done for thousands of years. What's different now is the fees that were added in the 1950s and then later the fees were dropped and interest was charged.
A credit card is a three-way relationship between you, the card issuer and the bank. With a charge card, it is the merchant who takes the risk, but with a credit card, it is the card issuer who takes the risk, since the card issuer guarantees payment to the merchant. The processing of credit card transactions does not occur in a vacuum. A merchant can either hire an army of clerks and data entry operators to process the the thousands of transactions through hundreds of card issuers, and pass those costs onto to you, or the card issuing banks can hire an army of personnel to process the transactions, or VISA/MasterCard can hire fewer employees to process all of the transactions (which is the way it works).
A business is charged a fee to use VISA/MasterCard based on the volume of transactions. The greater the number of transactions, the lower the fee. Discover and American Express also charge fees that are higher than VISA/MasterCard, which is why you often see merchants accepting VISA/MasterCard, but not Discover/American Express.
So, your claim that it will lead to lawsuits from the credit card banks is absurd, since it the banks who impose the fees on merchants the first place. The merchants can either eat the fees or pass them onto consumers.
I really wish that the credit/debit card fees showed up as a separate charge on your receipt, and that cash customers didn't have to pay them.
The problem is that counting cash has costs involved, and that to the business owner, sometimes its cheaper to take the credit cards, then have to manage cash and risk being robbed.
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