Pay cash for gas, get a discount
Savings on cash for gas.
We noticed recently that the Mobil station at the corner of Washington and Colvin in Albany is now offering a seven cent discount when you pay with the cash. It's not much of a discount, but it adds up -- sort of. If you bought 10 gallons of gas with cash there once a week for a year, the discount would save you a little more than $36.
On a somewhat-related note: we also noticed recently that the Muddy Cup in Schenectady is now tacking on a 25 cent fee if you use a credit card.
Has anyone noticed other credit card fees / cash discounts? One more and we win lightly-researched trend story tic-tac-toe.
Hi there. Comments have been closed for this item. Still have something to say? Contact us.
Comments
The Hess on Route 9 in Latham has had a cash discount for a long time although they don't make it as clear as the Mobil station does. Also there is a gas station on Route 4 in North Greenbush (right across from The Mansions/Partridge Hill) that has started giving a discount for cash. Although I see the point since the station avoids paying credit card fees it can become kind of annoying when you're like me and hate carrying cash.
... said Emma on Oct 13, 2008 at 12:41 PM | link
I'm pretty sure all businesses that do this are violating their service agreements with Visa, Mastercard, etc...Every one of these agreements I have seen explicitly prohibit minimum charges or an additional charge tacked on for customers that use cards. That said, I understand why they do it -- that 2.5% fee can really add up.
Businesses of note that do this:
Maurice's deli in downtown Albany adds 25 cents for charges less than $15 (or $20, not sure)
Lark Tavern and a ton of other bars have $15 or $30 minimums.
Again, to my knowledge all of these businesses are not supposed to do this per their agreement with the card networks.
... said beaverstreetjugband on Oct 13, 2008 at 12:55 PM | link
Not too bad, though Mobil stations tend to have higher gas prices in general. If you can buy your gas outside of the City of Albany you can often do better. (Best gas prices I've found: both stations at Exit 10 on the Northway)
... said Eric on Oct 13, 2008 at 12:57 PM | link
A merchant may discount the regular price in return for using cash but they may not add a surcharge for the use of a credit card. What Mobil is doing is allowable while what the Muddy Cup is doing is not.
As for the minimum purchase agreements, those are not allowed either although just about every restaurant out there does it.
... said Sean on Oct 13, 2008 at 2:15 PM | link
I hope this trend doesn't continue -- using cash in this country is horribly inconvenient. If we had (readily available) $1 and $2 coins and prices were rounded to the nearest 20 cents I'd be more inclined to use it, but that's a whole other rant.
I never understood the minimum purchase rules -- 2.5% is 2.5% no matter how much someone spends. Is there a per-transaction charge as well?
... said Alsace on Oct 13, 2008 at 3:38 PM | link
Also, in some service related companies where you may leave a tip as part of the credit card charge the fee is then passed on to the person who provided the service. So if there is a 2.5% fee to the business for charging the card the business then deducts that percentage from the tip to the server (ie. waiter/waitress, chauffeur, etc.). I know of a few local businesses that do that.
... said Emma on Oct 13, 2008 at 3:55 PM | link
I stopped going to the Muddy Cup on Madison, mainly because it's dirty, but they've also been tacking on a surcharge for credit card purchases for awhile now. I guess their usual clientele doesn't know any better, but I hope they know now.
... said Zenzele on Oct 13, 2008 at 4:02 PM | link
Charging extra for the use of a credit card is not legal. The place in question could be reported and face a fine and have their credit machines taken away. When you take on the use of credit machines you understand that you are giving up a certain percentage, but you also gain more customers that would otherwise not spend money there because they do not carry cash. I know that when my family ran a business we were never allowed to deny a charge no matter how small because we always feared being turned in. Of course these days denying something for suspicion is another ball game.
... said BL on Oct 13, 2008 at 4:17 PM | link
Because Colvin Ave Mobil displays the cash and credit price on the street signs, they are technically not violating state law. If you display only the "cash" price on the street and show the credit surcharge on the pump, that's illegal.
Price discrimination is a violation of the merchant agreement with Visa/Mastercard (but not with American Express), and was against Federal law until the mid 1980's when the law expired.
Muddy Cup is just being stupid and greedy -- they sell a product with a 70% margin and get lots of extra or larger sales because of the convenience factor of accepting credit cards. They will lose their ability to accept cards and hopefully get fined.
I never go there, but I will go and charge it just to send the chargeback their way.
... said Duff on Oct 13, 2008 at 8:34 PM | link
The Citgo gas station on Crescent Road just off I-87 exit 8 also offers a cash discount.
... said Amy on Oct 14, 2008 at 8:50 AM | link
I need to clarify, I did not mean that the Mobile Station could get in trouble. I was talking about Muddy Cup which adds a fee for making a charge transaction. That is 100% against the TOS for having a charge machine.
Offering a cash discount is a smart move and like Duff said perfectly legal so long as it is clearly stated.
... said BL on Oct 14, 2008 at 9:58 AM | link
Well, all of your comments have helped me figure out what I'm going to do for current state of not-enough-caffeine-- I've made the devastating error of running out of coffee at home. So, I'm going to walk to the Muddy Cup and pay CASH for my cup of coffee, then walk to Price Chopper and purchase more coffee to make at home when the caffeine level wanes.
I'll wave to everyone who's happily filling up their cars on less expensive gas feeling like they're getting a great deal at the Mobil station on Madison and W. Lawrence. Meanwhile, of course, I have no car payments to make no need to fill the tank, or pay for oil changes, service, or insurance -- ahem...who's the one saving all that money? Me baby, me. So what if it takes me at least twice as much time to get everyplace I have to relying on my own two feet + CDTA??
... said ThisQualityLife on Oct 14, 2008 at 11:23 AM | link
As a local Relationship Manager for one of the nations largest and most respected payment processor in the nation I thought I should pass on this information and what I have found.
Per VIsa and MasterCard Regulations:
Visa regulations 5.2.F Prohibitions:
A merchant must NOT establish a minimum or maximum transaction amount as a condition for honoring a Visa Card or Visa Electron card.
MasterCard regulations 9.12.3:
A merchant must NOT require or post signs indicating that it rquires a minimum or maximum transaction amount to accept a valid MasterCard card.
Additionally, depending on the industry many merchant types should be realizing "small ticket" or "convenience purchase" pricing for those transactions under $15.00 (Visa) and $25.00 (MasterCard) respectively.
The way around the regulations if so inclined is to offer a cash discount and it must be worded as such.
Now for the reality check.
Those establishments that give their customers a reason to spend less by offering an incentive when paying with cash are not seeing the big picture nor do they fully understand their true cost for payment processing. Focusing on an ill preceived negative and not the positive that electronic payment transaction activity offers, only encourages and rewards lower overall sales and average ticket, therefore costing the merchant even more in the end!
Everything has a cost. It it just a matter of which ones are being measured. Is anyone measuring the cost of losing a customer?
By the way, establishing a minimum transaction amount is also a form of discrimination and that is illegal.
... said RonVF on Oct 14, 2008 at 3:18 PM | link
Credit cards are for suckers, pay cash and buy what you can afford, live within your means, its not convent its paying high interest rates to a credit card company for no reason. Save your money and pay cash
... said Jim on Oct 14, 2008 at 10:20 PM | link
Jim, although I see your point, don't forget that most check cards (those attached to a checking account without an interest rate) are used as credit when making purchases to avoid paying a fee from the bank to use it as a debit card.
... said Emma on Oct 15, 2008 at 9:07 AM | link
I always thought that merchants are encouraging cash payments to avoid reporting those sales to IRS.
... said Lu on Oct 18, 2008 at 11:00 AM | link
My friend who lives in the neighborhood says that Muddy Cup in Albany hasn't charged her to use her debit card the last few times she visited. Either they've stopped it, or the staff forgot.
... said Laurie on Oct 18, 2008 at 1:05 PM | link
I know someone who works at the Muddy Cup on Madison avenue and she tells people about the charge before they use a card. The reason that they do this, she was told by the owner, is the credit card company charges the Muddy Cup every time they perform a transaction. They have no credit card minimum so they do it this way. Minimums and charges are dumb but I guess some places see it as necessary. The solution would be to carry some cash around.
... said kevin b. on Oct 19, 2008 at 12:39 PM | link
Why should people who are willing to pay cash be penalized to subsidize those who don't. Swipe fees should be the responsibility of those who incur them, not me. I actively seek out any and all merchants who offer cash discounts. If you want to pay more to use plastic, you go right ahead. Just don't ask me to pay more to make it more convenient for you. You incur the swipe fee, you pay it. The end.
... said Bob in Tx on Jul 31, 2011 at 9:00 AM | link