Consumers hunt for price relief at the pump

Certain payment methods can save you pennies per gallon, but that can add up.

Bob Child
12-cent difference : A Hess station in Hamden, Conn. offers discounts for cash-paying customers.

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."

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 – 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."

Over the course of last year, the number of people holding credit cards with rewards for gas purchases grew from 6 percent to 10 percent, according to a survey of about 1,400 credit-card holders by Auriemma Consulting Group. Evidently, that's a sizable gain: "Relative to growth in other categories surveyed, that 4 percentage points … represents fairly strong growth for a category that is not brand new," says Scott Strumello, associate at the Westbury, N.Y., firm.

One website,, ranks its most preferred gas cards. In order, its top five are: Chase PerfectCard MasterCard; Blue Cash from American Express; Discover Open Road Card; Citi Dividend Platinum Select Card; Capital One No Hassle Points Rewards.

The Chase PerfectCard offers a 6 percent rebate on all gasoline purchases for the first three months after the card is issued, reports. After that, the rebate drops to 3 percent with a monthly $15 rebate cap. Card holders also earn a 1 percent rebate on all other card purchases. Gas cards are a "great way for consumers to save money," provided they fully pay off their card balance every month, says Bill Hardekopf, CEO of in Birmingham, Ala.

But consumers need to grasp a cards' terms and conditions. "Usually, these cards give a higher rebate percentage when you first sign up for them and over the first specified amount of months" – after which the rebate percentage may drop, Mr. Hardekopf notes. Moreover, some cards cap the rebate amount given during a given year.

Then there's the issue of getting the rebate. Rebates can come in the form of a check or a reduction in a card's balance. "But to get the rebate, most of the time you have to do something, such as calling and requesting it," Hardekopf explains.

Consumers who want more immediate rewards, but prefer not to pay in cash, can try other types of payment cards. Keith Reid, editor-in-chief of National Petroleum News, estimates that a "half-dozen more notable" organizations offer such programs. Among their features, proponents say, are payment methods with much lower costs for merchants than they have with other credit-card networks. Such savings can be passed on to customers.

Take the National Payment Card. Unveiled in January 2007, NPC allows consumers to turn their existing cards, even drivers' licenses (in 24 states) and loyalty cards, into private-label debit cards to pay for gas. Since the system has comparatively low transaction costs for merchants, participating retailers can pass on the savings. In fact, consumers using the NPC system can expect a price cut – the size determined by the merchant – right at the pump, officials say.

Users of Revolution Money's new RevolutionCard, a PIN-based credit card, can also expect savings at the pump. Indeed, at Tom's Stores in Pennsylvania, gas buyers using a RevolutionCard immediately get a 10-cent-a-gallon discount, notes Duncan Evans, senior vice president and general manager of retail business at the St. Petersburg, Fla.-based Revolution Money.

Launched in February, the RevolutionCard is accepted by more than 150,000 retailers, including 1,000 gas stations, it says.

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