Consumers hunt for price relief at the pump
Certain payment methods can save you pennies per gallon, but that can add up.
If you're fed up with gasoline prices swallowing more of your income, you're probably echoing the proactive views of Susan Graham of Bellevue, Wash. In her area, prices have swelled to more than $4.50 a gallon. So she, like ever more Americans, finds it "important to do something to curb costs."Skip to next paragraph
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Certainly, Americans can take steps to improve fuel efficiency – properly inflating tires, emptying the trunk, getting regular tune ups, driving more slowly, etc. But motorists can also save money at the pump.
Among the options: getting a discount for paying with cash; using a gas rebate credit card; or embracing newer technologies that combine some of the features of using plastic with the benefits of immediate discounts.
A customer who pays in cash can receive discounts from gasoline retailers willing to pass along savings created by cutting out fees they would have paid to credit-card networks. Those fees, station owners say, are rising with the cost of gas and further eroding their thin profit margins.
On a national level, gasoline retailers are giving discounts of from 8 to 14 cents per gallon to those who pay with cash, reports Michael Fox, executive director of the Gasoline and Automotive Service Dealers of America, a trade association for gas retailers in Connecticut. Although he and others have no national figures on how many retailers offer discounts for cash, about 50 Connecticut stations – those selling Hess, Shell, Irving Oil, or unbranded gasoline – had two-tiered pricing, Mr. Fox says.
Evidently, the lower price for cash can be a draw. Fox cites a Fairfield, Conn. gas station that discounts its unbranded gasoline by 20 cents a gallon for cash-paying customers. Prior to offering that cut this spring, the station received 87 percent of its payments from credit cards. That dropped to 30 percent in less than three weeks after launching its cash discount offer.
Experts give various reasons why the two-tiered pricing arrangement may not suit all retailers. Among them: the cost of new signage; in some cases, the need for a software upgrade to enable a cash register and a computerized pump to read the same price; and a reluctance to risk irritating customers.
Some drivers might feel penalized by paying more with a credit card, while others could resent having to carry large amounts of cash in order to receive discounts.
For convenience, two-thirds of consumers prefer to pay for gas with plastic. And evidently, gas rebate cards, which combine that convenience with a rebate, are gaining in popularity. Experts say such offerings differ from the proprietary oil company credit cards that have largely fallen out of favor. The newer cards – which, all told, number about 50, according to Curtis Arnold, founder of CardRatings.com – come with differing rewards strategies and may or may not be cobranded with an oil company.
"Some of these cards are marketed exclusively as gas rebate cards, others as general rebate cards but which give users an enhanced rebate on gas," Mr. Arnold says. "Thus, instead of a standard 1 percent rebate on all purchases, these rebate cards would give you rebates of between 2 and 5 percent on gas purchases."