SAN FRANCISCO – Is it alright for convenience stores to offer two different rates – one for people who pay with credit cards and another, lower rate for people who pay with cash?
Convenience stores say they’re entitled to offer a “cash price” and a “credit price.” The credit card industry opposes the stations’ terminology and wants more ambiguous language used, reports the San Francisco Chronicle.
Although it seems like this is a war of words, the stakes actually are high – and it may take a judge to decide who’s right.
With credit card fees cutting into thin profit margins, some station operators are offering discounts to customers who pay in cash. These operators often post their rates in terms of a “cash price” and a “credit price.”
Credit card companies say this is misleading because California law prohibits surcharges from being tacked onto retail prices for using plastic. They want the price paid with credit cards to be a station’s “base price,” and for the cash price to represent a discount from that rate.
“We believe this language is misleading and unfairly surcharges cardholders who choose to pay for their gas using their credit card,” Visa spokesperson Rhonda Bentz told the newspaper.
“It would seem that ‘credit price’ is clearest,” said Al Shelden, the senior assistant attorney general for consumer law, to the Chronicle. “I don’t think most people would know what a ‘base price’ is.”
NACS is also seeking clarity in the matter. “Credit card fees eat up about 10 cents a gallon at these gasoline-price levels,” said NACS spokesperson Jeff Lenard to the newspaper. “The whole reason for cash discounts is to move customers to a payment method that won’t cost so much.”
Lenard accused the credit card industry of playing “verbal shell games” to prevent consumers from having a clear idea about payment options at the pump and said Visa in particular is “good at parsing words.”
Lenard also noted that convenience stores paid about $6.6 billion in fees to credit card companies last year. At the same time, he said convenience stores registered total profits, after taxes and fees, of $4.8 billion. “The credit card industry made more off our business than we did,” he said.