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Randomperson1362 t1_j2adwt7 wrote

Credit cards have fees. If you pay cash, the merchant avoids these fees. A cash discount also requires you to enter the store (where they sell things like soda and candy, that have a much higher margin than gas)

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Shorthawk t1_j2an795 wrote

The snack bit is big, never underestimate how much companies will push the snacks.

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ImReverse_Giraffe t1_j2bqwfh wrote

Because they actually make money on the snacks. They make a few cents per gallon, and that all depends on how many other gas stations are around.

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EightOhms t1_j2c6iue wrote

I've heard of gas stations where they make more profit on a single cup of coffee than they do on 8 gallons of gas.

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dl__ t1_j2d7f9x wrote

Just like movie theaters

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Jormungandrs-bite t1_j2buzr5 wrote

You may or may not know,.

But in the US. It's illegal to charge more for credit cards. But it's not illegal to give a discount on cash.

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Manyelynn13 t1_j2cl1ps wrote

It's not illegal in the US to charge a credit card surcharge in all but five states.

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EightOhms t1_j2c78ar wrote

Discounting cash sales is literally charging more for credit card sales.

So no it's not actually illegal because gas stations do it all the time.

The truth is this isn't a legal question but rather has to do with the service agreements the gas station signs with the credit card processor. For most stores, the CC processor forces stores to charge the same for cash versus credit cards. However they make exceptions for super low margin businesses like gas stations who literally cannot afford to pay the transaction fees and still make money on gasoline.

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Not-your-lawyer- t1_j2cdbjc wrote

...not the point.

I mean, they're at least partly wrong. Only a few states in the US—five, I think?—ban passing on processing fees to the customer. But what's banned is not having different prices, it's charging a fee on top of the listed price.

It's basically a truth in advertising rule, though it's weird that we made it for credit cards and not for sales tax. Anyway, the idea is that credit card surcharges feel like a penalty and cash discounts feel like a reward, even if there's not practical difference between the two at checkout.

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Legal-Mammoth-8601 t1_j2fnfcx wrote

Is it literally "Illegal" or just against the terms of the agreement with the credit card processor?

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wavform t1_j2ap7tq wrote

In addition, all these card companies have increased rates dramatically over the last 2 years. This (Cash v. Card pricing) will be the norm soon across most vendors that use cards daily. Most restaurants in my area already do this if they are not corporate backed to absorb those extra fees.

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152centimetres t1_j2btkxz wrote

netflix explained: credit cards also mentions how if enough customers are using credit cards they have to raise the prices for everything to account for the fees

make it easier for everyone - use cash or debit!

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amazonfamily t1_j2ae21t wrote

Credit card companies charge transaction fees. The gas station gives a discount for cash payers because they don’t have to cover a transaction fee when people pay in cash.

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biggsteve81 t1_j2aegop wrote

The tradeoff is that having significant amounts of cash makes you a target for robbers, and you have to count the money and take it to a bank for deposit.

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drunken_assassin t1_j2ajlky wrote

On the other hand, having significant amounts of cash transactions makes it much easier to launder money from your criminal enterprises!

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SparklyMonster t1_j2as0ic wrote

Though I guess there must be some sort of control since the station is depleting its stock of gas, so it's not like they can order more gas and say they didn't sell what they had... (or can it?)

Which is a different case from doctors and dentists who'll only accept cash or charge more for any other form of payment that is not cash (including the ones that don't have fees).

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drunken_assassin t1_j2av70y wrote

> Though I guess there must be some sort of control since the station is depleting its stock of gas, so it's not like they can order more gas and say they didn't sell what they had... (or can it?)

Conveniently, I wrote a handy-dandy tutorial er..uh...answer to a question about money laundering earlier this year that addresses supply-chain management and other money laundering tactics.

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ThatOneGuy308 t1_j2cav0q wrote

Debit cards exist, in case you were unaware. And I suppose physical checks, for the 8 merchants who still accept them these days, lol.

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biggsteve81 t1_j2cclwo wrote

I often do forget about debit cards, since I don't have one. But still those and credit cards are often safer for merchants than cash.

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ThatOneGuy308 t1_j2ckvhk wrote

Ah, I misread and thought you meant cash was unsafe for customers to carry around, lol

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biggsteve81 t1_j2dm2uk wrote

That is actually also true. The number of muggings in the US is down significantly since most people don't carry a lot of cash anymore.

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ThatOneGuy308 t1_j2dmcwe wrote

Makes sense, no real point in mugging someone for their cards when they're just going to cancel them before you get a chance to use them anyway.

I suppose at this point muggings are probably focused on jewelry or small items they could take and sell rather than direct cash, which is probably enough work that it stops a lot of muggers from bothering.

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biggsteve81 t1_j2dnuod wrote

Yep. The tradeoff is that digital crime has increased significantly, since your money can now be stolen by people anywhere in the world.

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logicaltuvok t1_j2ddv4c wrote

Debit cards are still generally authorized on the credit card network and are subject to transaction fees (Visa and MC mostly)

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ThatOneGuy308 t1_j2dh718 wrote

While this is true, the fees for debit cards are usually smaller than the fees from credit companies, so it's still preferable to credit for a lot of businesses.

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alek_hiddel t1_j2ael9p wrote

You'll see this at more than just gas stations, it's not uncommon for smaller convenience stores having a "minimum purchase amount" required to use credit cards.

The reason for this is the way that credit card and debit card companies make money. For every transaction there is usually a fee of a couple of percentage points of the purchase. So if you go in and buy a soda for a dollar where the store may only be making $0.05 profit, and Visa charges a 3% fee, then the store owner just lost 60% of their profit on the purchase.

Larger companies and chains have the leverage of massive buying power to negotiate these fees down, or even get them waived entirely. So Walmart for example, is paying almost nothing if anything at all for credit card processing, and thus won't have those kind of limits.

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jaminfine t1_j2cdpfy wrote

Actually I think the reason is more like this:

In addition to charging a % based fee, credit companies also charge a flat fee per swipe. For example, they might charge $0.07 + 3%. So if the total is $1, the fee is $0.10, or about 10% of the price. The flat fee matters less as the price increases.

This is why places have minimums for credit cards.

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Medium-Average9169 t1_j2adwqt wrote

When you use your credit card anywhere from 1 to 3% of every purchase goes to the credit card company. So by paying cash they are giving you a break on those fees.

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homeboi808 t1_j2ahtfq wrote

Besides charging interest on late payments, cash advances, etc., credit card companies / networks make money by charging the store/merchant a fee (usually a mix of a % and a fixed fee, something like 2.5% + 15¢); this is one reason as to why they can offer cash back/miles as rewards. Debit cards also have a fee, but a bit less.

This is also why American Express isn’t accepted everywhere, as they charge a higher fee.

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Ok_Cat_7675 t1_j2cefgj wrote

The owners have a limited understanding of how the fees work and are passing the cost on to the customer. There is no genuine reason to do so, the owner may of just been an investor who wanted to own a simple shop however neglected to understand that there may be extra work involved, like checking the totals add up at the end of the day. It might appear superficial but the business could be someone's life savings

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wayanonforthis t1_j2cvnmz wrote

Handling cash costs money too (not just the risk of theft for employees but banking it, counting cash, fraud, requiring change..). In the UK/Europe I don't think we have the pay at pump system in many places so everyone has to go to the shop.

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Pansy_pots681 t1_j2dmkm7 wrote

Im in the US and pay mostly with cash. If I'm spending a lot of money I'll ask if there is a cash discount. Maybe half the time it works? The dentist is a big one. Small vendors and restaurants even have cash discounts signs.

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Hoppingmad99 t1_j2av2v6 wrote

Because the owners are morons who don't understand the costs of cash money because there isn't a single fee like there is with card payments.

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ExistentialReckning t1_j2b839b wrote

>costs of cash money because there isn't a single fee like there is with card payments

There can be. Some banks will charge commercial deposit customers a fee for their cash deposits based on the amount of cash being deposited (usually once they cross some threshold, such as $.0075 per $100 for cash deposits exceeding $10,000 during the statement cycle). Then they will also be charged by the bank for change orders to replenish their cash drawer and keeping appropriate change on hand.

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