Moolah-Moolah

When was the last time you stop to gas up your car and you paid with cash? As for me, I don’t know the last time I paid cash to fill up my tank.

Well, David Goldman at CNN Money wrote an article how buying gasoline with a credit or debit card could be hurting your local gas stations meager profits, and we may end up having to pay for it. Can you say $4.00 a gallon boys and girls!!

“Some stations raise prices in order to keep profit steady. But others are unwilling to risk the competitive disadvantage or unable due to contracts with suppliers, and absorb the hit.”

” In some instances, this credit card problem is turning to the straw that broke the camel’s back,” said Paul Fiore, vice president of Service Station Dealers of America and Allied Trades. Fiore said gas station closings are not yet wide-spread, but could turn into a bigger problem as gas prices continue to increase.”

In my neighborhood I usually fill up my tank from an independent gas station because it’s consistently four to five cents cheaper every week than most of the big chain gas stations(Exxon, Mobile, Chevron). However, If these small independent gas stations are paying high merchant fees from credit card sales, then I can see why they might go under in the near future.

The article goes on to say…. 

“Gas station owners with deeper pockets can also afford to compete for drivers by lowering their prices to the point that they don’t profit at all from gas revenue.

About 80% of gas stations include convenience stores and, with rising credit card rates, station owners make nearly all their profit from the drinks, snacks and newspapers inside the store, not on fuel.

Appearing before the House Judiciary Committee last week, Douglass testified that consumers are willing to drive an extra 10 minutes to save just 3 cents on a gallon of gas, putting added pressure on independent retailers.

“Wal-Mart and Costco choose to sell below costs down to bring in traffic, but we have to have a product that at least breaks even,” he said.

That means that some gas retailers that are unable to compete are forced to close down – especially those that do not have an attached convenience store to remain profitable.”

 

Ultimately, due to the convenience of paying by credit and debit cards, paying our gas with cash will continue to be the main exchange of currency at the pump.  As for me I will try and do my part and at least pay for my gas with cash once a week. But before I do that I will have to stop at the bank and pull out $100 from the ATM….go figure.