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Author Topic: An Idea - Fighting Price Gouging Back to Topics
Jbart

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Message Posted: Apr 24, 2014 4:25:26 PM

I don't know if this has been brought up here or not but I have heard that retailers get "dinged" a fee for every credit card purchase. If this is true maybe an effective tool for the masses would be to only buy $5.00 or $10.00 at a time and charge it every time until the greedy oil companies bring the price into line.(?) Just a thought.
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Mikeyl
Champion Author Cleveland

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Message Posted: Jul 12, 2014 9:32:27 AM

Credit card fees are generally a fixed dollar amount, but more often a percentage of the sale. They range from about 2% to up to 6% depending on the retailer and the bank processor they use.

So, multiple transactions would not do anything to hurt the retailer (assuming they are on the percentage of sale plan).
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FocusFree
Champion Author Ottawa

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Message Posted: Jul 2, 2014 7:12:47 PM

Except that it is the gas station owner that pays, not the company
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tiny1oh
All-Star Author Akron

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Message Posted: Jul 1, 2014 10:14:06 AM

good idea
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Treasurehuntxxx
Champion Author Toronto

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Message Posted: Jun 28, 2014 1:43:41 PM

ok
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catfish99
Champion Author Wilmington

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Message Posted: Jun 22, 2014 10:00:59 AM

Buick, those limits are driven by credit card rules. Generally the cards will reimburse the station owner if a stolen or fraudulent card is used, up to a 50 or 75 dollar max.
Becky, again how will not spending money in your community lower gas prices? I understand the urge to do something, but the only positive to your plan is a little less gas used over the weekend. How will McDonalds pressure the crude auction price? Or Kohls? Ask yourself - what did these companies do during past gas price spikes that lowered the number of people entering the store? Did they succeed in lowering prices through pressure? Or did they try different sales tactics to maximize profit from the folks that did come through the door?
Finally, check out the gas price charts on GasBuddy. Gas prices are essentially unchanged in the last six years.
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buickentury
All-Star Author Madison

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Message Posted: Jun 18, 2014 10:29:04 AM

I've run into stations that only allow you to pump up to $50 of gas at one time. With a pickup or big SUV, that gets you a half tank. The station has no problem with you running another transaction.

Not sure if its a theft/loss prevention measure as the workers can't explain why they do it or why they can't authorize me for $100 at one time instead of 2x $50 except that its "their policy". I don't think the stations are being overly hurt by credit card fees or they wouldn't do this.

However, my credit card company does not like this and often calls me or shuts down my card until I verify the transactions.
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Becky_Gelke
All-Star Author Cincinnati

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Message Posted: May 30, 2014 5:55:44 AM

@catfish99. You don't like my decision to abstain from buying anything in-store because it hurts the local entrepreneur. Well let's see. The one station I frequent the most usually has about 3 persons working there at any one time. The young people that work there are 21-22 years old at best. Anyone older is probably mom's with high school kids or older age moms. Much of the time the faces behind the counter are unfamiliar so I imagine turnover us unreal. If there is an entrepreneur that owns the place they are making themselves plenty scarce.

The other station was very typical. There was a person of middle-eastern decent. Nice person that was easy to talk to. If he owned the place he is keeping a low profile because he is driving a late 1990s Saturn that needs a paint job. Anyhow this station changed from Marathon to Shell over the winter and I never seen this person since the changeover.

If you don't like the idea of buying "stuff" inside the store you are going to simply hate what I am proposing now. Because of the $3.999 gas prices I am staying home all weekend. Outside of attending church services our cars stay parked for the weekend. No McDonalds, no Outback Steak House, no festivals, no Kohls and the super saver bucks, no cinemas or Kings Island. I urge everyone to do the same. Is this a crazy? Of course it is. Will it hurt the wrong people? Probably so. Local entrepreneurs will suffer, little Jenny the server will not get as much tip for her college fund. But these gas prices are crazy too. Maybe along the way we will pick up some higher profile advocates like McDonalds or Kohls pressuring our 'leaders' to do something. Just an idea that our household, something besides sayong "like, not gonna work."
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Becky_Gelke
All-Star Author Cincinnati

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Message Posted: May 30, 2014 5:23:36 AM

@Gas Buddy. An example: Your side of town is $3.99. Buy just enough gas to assure you get to a gas station 15-20 miles away at $3.69. In my case, my savings is in the neighborhood of $5.00.

Also I am hearing all the time from the 'experts' that the stations don't make money on gasoline because the margins are thin. The 'experts' also say the stations make more money luring you in the store to buy soda, coffee, pizza slices... If this is the case not buying "stuff" in the store should hurt.
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JKazakus
Veteran Author Indiana

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Message Posted: May 28, 2014 10:09:16 AM

I don't use bank cards at all
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bballpurdue22
Rookie Author Indiana

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Message Posted: May 28, 2014 9:45:23 AM

Or the stations raise their prices to cover the extra costs...which do you think will happen, lower the cost of fuel so people buy more or increase the cost of gas? I think that is a no brainer.
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rumbleseat
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Message Posted: May 27, 2014 8:32:58 PM

Before I retired, I had a lot of experience with debit and credit card purchases.
Note, debit, especially, is different in Canada, it all goes through Interac. The highest debit card transaction fee I have ever seen is 17 cents, and most stations have enough volume they would be paying 10 cents, no matter the size of the transaction. Some restaurants and other businesses with lower average transaction amounts and overall volume charge a debit card fee, usually 25 cents.
I have never seen a service station charge a debit card fee, and would never return to one that did.
We never paid a swipe fee as such for credit card transactions, we paid a flat monthly fee, and a percentage on transactions. So, other than time, going in 3 times to buy $5 worth of gas wouldn't cost the station any more than going in once to buy $15. It would, however, cost you in wasted fuel for the extra stops.

[Edited by: rumbleseat at 5/27/2014 8:34:06 PM EST]
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catfish99
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Message Posted: May 24, 2014 9:52:35 AM

Becky,

THe big oil companies generally do not own gas stations. Pick any random station in the US and the odds are it is owned by a local person who is just trying to make a living working for himself or herself. As you note, they do not make much on gas, maybe a dime a gallon before credit card fees (the credit people often take half or more of that profit). And this does not even consider fixed costs of running the pumps.
The only way your neighbor down the street is making money is on the coffee, bread etc that he sells, not the gas.
So you are making a decision to attack a struggling local person to somehow get even with a huge multinational corporation doing 75% of its business overseas.
Now does that make sense?
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Gas_Buddy
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Message Posted: May 23, 2014 9:13:06 PM

Becky_Gelke:

Your ideas don't make sense. If you have to put in $5 worth of gas in order to get across town to buy less expensive gas, that means you're essentially at the empty point. In that case, is it really worth driving across town, however many miles it is, to save a few cents at the pump? If gas is costing $3.80 a gallon near you, and it cots $3.60 across town, and you honestly get 20 miles to the gallon, driving one mile will cost 19 cents at the station near you (the $3.80 a gallon station); actually it won't cost you anything because the station is right there and you don't have to drive out of your way to it. Driving a mile using gas from across town costs 18 cents a mile. If you're driving 10 miles across town to get cheaper gas, and 10 miles back, you're using one gallon of gas, lets' say $3.60 worth of gas. I you filled up 15 gallons near you (at $3.80 a gallon), it would cost you $3.80 times 15 gallons, or $57 to fill your tank. If you drive across town and get 15 gallons, (actually 15.5 gallons because you're using a half gallon to get there), it would cost you $3.60 times 15 gallons, or $54. And you'd be using another half gallon to get back home from across town. So you're saving $3 on a full tank of gas by driving across town, but you're paying $3.60 in gas to drive back and forth (actually paying more), plus you used time to spend that extra money.

As for boycotting the other things a gas station might sell, how does that help you? You already said you know gas stations operate on thin margins. I they're not making money on gas, and they're not selling anything in the store (because you're boycotting it), how does the gas station have income to pay rent, salaries, pay off it's loan (and son on), and stay in business? And if the gas station doesn't stay in business, if it closes, there's less competition, meaning that the other gas stations can raise prices without worrying about competition selling for less.

Sorry, but I don't see how your ideas or methods helps anything. It surely doesn't help keep prices as low as possible, let alone lower prices. And, as an aside, we haven't even said anything about wasting gas driving across town, something (unnecessary gas use) that causes prices to increase because of the further demand for the product.

Are you sure you don't want to reconsider your ideas?
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Becky_Gelke
All-Star Author Cincinnati

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Message Posted: May 23, 2014 2:09:26 AM

I have bought $5 worth of gas before as a way to get to stations across town that sell cheaper.

But I think a more valuable tool would be to not buy anything other than gas. I always hear about "the margins are so thin we don't make much money on gas". I will take them at their word. If that is the case I would boycott buying other things like sodas, hot dogs, sub sandwiches, milk, coffee, cigarettes, bread...
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jmtvt
Rookie Author Colorado

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Message Posted: May 19, 2014 1:20:23 PM

The $5 or $10 purchase idea would just increase their costs which, surely, would get passed on to us.
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maxstar
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Message Posted: May 14, 2014 8:47:43 PM

What is interesting gmarn. Your reply makes no sense.
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gmarn
Rookie Author Kansas City

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Message Posted: May 14, 2014 6:46:03 PM

Interesting
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mandoid
Champion Author Alabama

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Message Posted: May 11, 2014 7:27:19 AM

hurts the local retailer
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braves89
Champion Author Chicago

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Message Posted: May 4, 2014 9:58:05 AM

everyone has an idea not sure they will work but ideas are good
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SC444
Sophomore Author Twin Cities

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Message Posted: May 4, 2014 9:08:39 AM

k
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must87searcher
Champion Author Maryland

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Message Posted: May 4, 2014 7:29:13 AM

Things like this cans always come up in the market. Be sure to do more research to know all the facts on how it works.
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gman32MI
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Message Posted: May 4, 2014 2:40:51 AM

k
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jetskijerry
Champion Author North Carolina

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Message Posted: May 4, 2014 1:04:33 AM

Jbart, that's pretty stupid logic. The LOCAL MERCHANT has to pay a fee every time you use a credit card. The big oil companies don't pay a dime!
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tpguess
Champion Author San Diego

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Message Posted: May 3, 2014 7:38:25 PM

I buy where I get a cash price for using the ATM card.
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muquee
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Message Posted: May 3, 2014 10:21:53 AM

Tough.
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piggyster
Champion Author San Francisco

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Message Posted: May 1, 2014 3:24:06 PM

retailers pay the fees, not the oil companies
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PrototypeDevil
Champion Author Los Angeles

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Message Posted: May 1, 2014 1:46:46 PM

awesome
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Smartywife
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Message Posted: May 1, 2014 9:34:08 AM

That would only hurt the retailer. The Refinery and oil company would not be affected.
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shea33
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Message Posted: May 1, 2014 9:07:07 AM

Too many people get profit from gas.
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texashoudini
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Message Posted: Apr 30, 2014 4:00:31 PM

I think gas stations work just like any other business. The credit card company always gets a percentage of the sale. Perhaps 23%
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ryeguy27
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Message Posted: Apr 28, 2014 9:22:18 PM

This doesn't affect the oil companies as the "station" is just branded by the company they sell gas for, all you would be doing is hurting a small business owner working for a big oil company. The retailer has to buy the gas from "big oil" and sell it to us the consumers, and is getting pinched just like you and I for every nickel.
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ggg452
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Message Posted: Apr 28, 2014 12:19:54 PM

Love it....sounds good.
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Michael29644
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Message Posted: Apr 26, 2014 1:21:57 PM

Another thing people who suggest this little pointless game never consider is that many banks now place a hold of between $75-$125 on their cards per transaction, regardless of the actual transaction amount. That hold remains in place for about 3 days, or until the actual transaction gets posted to their account. So let's say someone wants to buy 20 gallons of gasoline, and wants to (wrongly) punish the station by buying it on their credit card two gallons at a time. If their bank puts the higher $125 hold per transaction on their card, they drive away with $1,250 in holds on their card until those transactions clear. If they stop on the way home to eat at a restaurant to celebrate their "victory" over an innocent station owner, depending on their balance and credit limit, they could find their card being declined after they've eaten their celebratory meal, all because they chose to punish an innocent third party in a petty, vindictive way.
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Gas_Buddy
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Message Posted: Apr 25, 2014 9:34:18 PM

To follow-up the other posts, the retailers get dinged (to use your word) but it's not by the greedy oil companies. The "ding", called an interchange fee, is charged by the credit card companies or financial institutions; retailers are charged a percentage of the cost of the price at the pump, not a fixed price per sale or per gallon, but a percentage of the price at the pump, generally 2.5 to 3.5 percent. To be simplistic, if a gas station charges you, the consumer, $1 a gallon for gas, then the fee the gas station pays for the credit card transaction is 2.5 to 3.5 cents per gallon; if you buy 10 gallons, then the station is paying 25 to 35 cents in credit card fees.

Let's now say that the gas station, because it's paying a higher wholesale price for gas, let's now say that the gas station is charging you the customer $3 a gallon. That means that the gas station is now paying credit card fees of 2.5 to 3.5 percent of $3, meaning that the gas station is paying credit card fees of 7.5 to 10.5 cents for every gallon you buy, meaning that if you're buying 10 gallons of gas, the gas station is paying 75 cents to $1.05 per gallon in credit card costs. That doesn't count any fixed transaction fees that the gas station has to pay for the "card swipe", which can be about 20 cents, regardless of how much the sale is.

That's not enough? Okay, how about the thought that most gas stations have a per gallon mark-up of about 9 to 12 cents (the same as it's been for the past 30 or 40 more years. That means that if the gas station is paying $1 a gallon wholesale, it's selling for about $1.10 per gallon; if the gas station is paying $3 per gallon wholesale, it's selling for about $3.10 a gallon. From that "mark-up" the gas station has to pay the credit card fees, meaning that it could be paying as much in credit card fees as the mark-up per gallon is, meaning that the gas station is breaking even. Breaking even until you realize that it still has operating expenses such as rent, salaries and employee benefits, paying off it's loan or investment in the business, franchise fees, maintenance and upkeep, advertising, local taxes (and accountant fees), and trying to get a return on investing in the business - let's call that last thing trying to get a profit just like any business owner wants so they can live as well as continue to operate the business.

Assuming that you're not buying a lot of items in the attached convenience store (if there is one), the gas station doesn't have a lot of ways to make enough to cover expenses in order to stay in business.

Oh yeah, something else. If there's other gas stations that are competing for your business, this gas station might have to lower it's mark-up per gallon in order to be competitive because the station management knows that you'll shop next door if their price is a penny or two per gallon cheaper.

And you know what? The "greedy oil companies" aren't the ones getting involved in the credit card fees. The credit card companies and the financial institutions (call them banks, if you will) are the ones that are making the credit card fee "dings".

What will happen if you buy only $5 or $10 at a time and "charge it every time" is that the gas station will keep paying the same percentage on what it sells, you'll wasting time buying gas over and over, or wasting time and gas if you buy small amounts at different stations, and the gas station will still have to pay the transaction fee for each sale, regardless of how much or how little the sale is. And if it's paying more in credit card fees than it's mark-up per gallon, the station operates at a loss; and if the station operates at a loss, sooner or later it stops operating, just as the company you work for will have to do. If it stops operating, if it closes, there's less competition in the market place for you to choose from.

All that said, to use the last words in your original post, "Just a thought."

Want to "...every time until the greedy..." something? Try to get the credit card companies and financial institutions to charge one fixed price for each sale, not a percentage of the price at the pump, because as the base price goes up, the more the gas station pays because its now paying a percentage of a larger amount. Making up a figure, get the credit card companies and financial institutions to charge the gas station a dime per transaction, and the station can work that into the price at the pump.

And, something else to consider, something I've deliberately held off until now. Most gas stations sell between 65,000 to 100,000 gallons per month. Yes, some sell less and some sell more, and some have a per-gallon mark-up of as low as 3 to 4 cents per gallon, and others have mark-ups as high as 14 or 16 cents per gallon, and some slightly higher than that. And some, especially at "convenient" locations such as intersections or adjacent to highway entrances/exits, pay significantly higher rental fees for their "prime location". But, for the sake of discussion, a gas station charges 10 cents per gallon mark-up and sells 100,00 gallons per month. That means, before any expenses are paid, before credit card fees, before rent, before salaries, before paying off it's loan for the business, it's taking in $10,000 a month. Sounds like a lot? That means it's taking in $120,000 a year. If there are three employees, each earning $7.50 an hour, 40 hours a week (meaning the station isn't operating around the clock), the gas station is paying each employee $300 a week, meaning that it's paying three employees $900 a week in salaries, or about $4,000 a month in salaries. Let's say the rent is $3,000 per month. And let's say that only 75 percent of the gas station sales - at $3.60 (the current national per-gallon average) - are paid for by credit card. The credit card fees for 75,000 gallons of gas sold to you (the driver) at $3.60 a gallon is about $8,000.

Add up those expenses, for selling 100,000 gallons of gas per month at about 10 cents per gallon mark-up, with a 3 percent credit card fee charged to your gas station, rent salaries and credit card fees, and then try to figure out how to pay the rest of the operating expenses without anyone using the convenience store, let alone try to make a profit as a business owner.

Again, using your words, "Just a thought."
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Jbart
Rookie Author Ontario

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Message Posted: Apr 25, 2014 4:53:04 PM

OK, I've learned some things here, which is partly what I was looking for. In my initial post I was kind of fishing for info about some ideas I had and now I know more about how the retail end works I concede that my ideas aren't good. Back to the drawing board.
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Michael29644
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Message Posted: Apr 25, 2014 1:14:04 PM

AnnieDriver,

Could you please clarify? Is that $.35 per transaction or per gallon. A surcharge of $.35 per debit card transaction doesn't seem unreasonable as they appear to just be passing along close to the actual cost to the people who use the convenience. The highest difference I've seen per gallon is $.10, which again, for credit card use, doesn't seem too unreasonable, since credit card use involves higher discount rates. That's in part how credit card companies can afford to give cash back on purchases.

I accept credit cards in my business, and some of my invoices cost me up to $50 in just credit card fees. I accept it as a cost of doing business, but in reality, that cost is factored into my hourly rate. The people who pay by check subsidize the people who pay by credit card, but then I have to run to the post office to pick up the checks and then to the bank to make a deposit, which costs me money, too.

[Edited by: Michael29644 at 4/25/2014 1:14:58 PM EST]
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AnnieDriver
Rookie Author San Bernardino

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Message Posted: Apr 25, 2014 1:15:26 AM

I wonder why Arco charges 35 cents to debit at their gas station, while most others don't charge? I don't buy gas at Arco for this reason. It's petty but it's principle for me.
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Michael29644
Champion Author Greenville

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Message Posted: Apr 24, 2014 10:59:43 PM

"I don't know if this has been brought up here or not"

Only a few dozen times.

"but I have heard that retailers get "dinged" a fee for every credit card purchase."

Yes, the retailer pays swipe and discount fees for accepting credit and debit cards. Notice I said retailer. More on that in a bit.

"If this is true maybe an effective tool for the masses would be to only buy $5.00 or $10.00 at a time and charge it every time until the greedy oil companies bring the price into line.(?) Just a thought."

And not a very well thought out one. Why would you think that raising the retailers' costs would result in lower prices? They'd be forced to pass the increases along to stay in business, or quit accepting credit and debit cards.

And hardly any gas stations are owned by oil companies any more. They are almost universally owned by a franchisee, who is likely a member of your community. So why would you want to punish them for something they cannot control?

[Edited by: Michael29644 at 4/24/2014 11:01:30 PM EST]
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Jbart
Rookie Author Ontario

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Message Posted: Apr 24, 2014 6:07:56 PM

Here in Ontario Canada the gas prices prices just jumped about 10 cents a litre at the same time at almost every gas station just as the weather starts to get good. Maybe it's not gouging but it feels like it to me. I guess I'm ready to strike out at anyone or anything I can, hurt the retailers, they complain to the oil companies maybe. I don't know. Our news reporters on TV say there is no reason or explanation from the oil companies and all refused to return calls.
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maxstar
Champion Author Chicago

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Message Posted: Apr 24, 2014 4:39:52 PM

Where have you seen this gouging taking place?
And how would "dinging" the retailer impact the oil companies?

[Edited by: maxstar at 4/24/2014 4:40:50 PM EST]
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