More Gas Stations Switching to Cash Versus Credit Pricing
Local expert says blames tough profit margins and increased credit card fees for increases when paying by credit/debit for gasoline
It is no secret that gas prices are on the rise across the nation. But locally, it seems like the margin between cash and credit prices at local stations is increasing as well. Add in several closed gas stations in recent months, and it's a tough time just to fill your tank.
Several gas stations in Ocean County and the surrounding area have switched from one price per gallon to separate prices when paying by cash versus credit.
These changes are not sudden and can be blamed on a low profit margin, according to Fred Rozell of the Wall Township-based Oil Price Information Service (OPIS). Rozell is the Director of Retail Pricing for the internationally recognized organization.
"The average profit per gallon sold for a local gas station was about 18 cents in 2011, but the profit has been as low as 9 cents in recent years. It averages about 14 cents a gallon," Rozell said.
OPIS estimates that credit card fees for gas stations range from 2.5-3 percent of sales. The Association for Convenience & Fuel Retailing says that credit and debit card fees averaged 4.7 cents per gallon when factoring in all gasoline sales (cash or credit) in 2009.
"It's hard to operate at such a low profit margin when most of these stations are probably only doing about $50,000-$80,000 of business a month.
In Toms River, the Exxon located at 1299 Hooper Ave. and the Lukoil at Routes 166 and 571 recently closed. At the same intersection of Lukoil, the Shell station is now separate pricing for cash and credit.
Many gas stations, except Wawas, seem to display a different price for cash or credit purchases.
Wawa operates six gas stations in Toms River, and all offer the same per-gallon price regardless of the method payment. How can this be? The answer is simple, Rozell said: convenience stores make the difference.
"Wawas are doing about $500,000 a month in business, and the trick is they're getting people inside. If a gas station doesn't have a popular convenience store, they're in trouble," Rozell said.
Local representatives from Wawa, Exxon and Shell did not return Patch's phone calls about their profits and credit fees.
The switch to separate pricing for gasoline is not hard for consumers to notice. Toms River resident Mandy Pearce said she'd be surprised if any consumers were happy about the change. For her, it's a matter of convenience.
"I don't carry that much cash on me," Pearce said. "Why penalize me for that?"
Beachwood resident Kim Hartman said as a result of the switch she's seeking out locations that still offer the same price no matter how you pay. Most cases, that's Wawa.
She doesn't buy the argument that credit card fees are eating into gas station profits. "Maybe for a smaller independent station, but for a big company like Shell or Exxon, it doesn't add up."
Rozell says consumers shouldn't see an increased credit price as a penalty, but instead as a nature of the business.
And if you're looking for relief at the pump any time soon, think again.
"Prices should remain erratic through the spring, but we could hit record levels before Memorial Day" according to Rozell.
Catherine Galioto contributed to this report.
KAREN A KINCAID
7:17 am on Friday, February 3, 2012
gas prices are a crock of crap!! just another way of bleeding the Americans dry. It's time congress steps in and does something for the people who vote for them and stop giving away everything to other countries!! LIKE HELLOOOoooooo, with out our help other countries would have nothing, bleed us dry and we no longer have nothing to give!!!!! ( not even to our own people )
Jerry Harper
7:28 am on Friday, February 3, 2012
The same argument is used to allow "self service" gas pumping, "it will save you money". New Jersey still has the cheapest gas prices and although the profit margins are lower it is not a losing proposition. I will not use a station that charges extra for the use of credit cards. If the public uses their power of choice to bypass stations that charge extra, there will be a change in policy by those stations.
Jeff Lenard
9:55 am on Friday, February 3, 2012
New Jersey's prices are "cheap" because its taxes are the third-lowest in the country -- 32.9 cents/gallon. In New York and Connicucut, they are over 67 cents a gallon. That's the reason for the price differential.
George Ronald Adkisson
10:14 am on Friday, February 3, 2012
The federal reserve prints millions of dollar bills per day...and that number will increase too...as another inflationary portion of commerce in the uS. At the same time...banks will appear to be more lenient with the amounts they loan, but they are actually loaning a dollar that is worth less than it was a year ago...or even before 7 banks failed in the uS during January.
It is hard today to look at the land scape as exampled by Copper Hill...and see just what a one cent was worth in bartering when it was first introduced many years ago.
Our labor is the same...trees bear the same fruit...but our personality and physical conditions have deteriorated a great deal.It's like a french farmer once stated after the war with England in the 1700's...the social bonds have loosened.
Everyone have a good day...
RJisLiving
10:18 am on Friday, February 3, 2012
These are the stations I drive right past. Can't support anyone who conducts their business that way.
Rick
10:27 am on Friday, February 3, 2012
In the article Ms Hartman commented about there being a difference between independent stations and big companies such as Exxon or Shell.
Those stations are also independent. They are locally owned or franchised and the only thing the 'big company' owns is the sign
Sal Sorce
10:46 am on Friday, February 3, 2012
When I first started driving in 1956, regular was .17cents a gallon,
premium Esso was . 31 cents a gallon. My new Olds in 1957 was fed
only premium Golden Esso at .31 cents.
I know folks so salaries and costs of living were an also low and
insane ... relatives as police officers in 1968 were paid under $7,000
and that was Nork.
The 160,000 seniors that have moved to Ocean County when
tolls on the GSP were also ridiculously low .10 cent tolls with a smile
and uniformed collector.
The good old days are gone forever ... anyone who believes paying
cash is a benefit for a traveler, must have a County job with all the huge
benefits they worked so hard to earn, yeah and all the costs to live
in New Jersey are going to be lowered by so called caring politicos.
HA!!!
Rick
4:11 pm on Friday, February 3, 2012
Sal, I don't remember there being that much difference in between regular and super duper gas. The Parkway tolls started at 25¢ for the barrier tolls. Some of the exit toll booths might have been 10¢.
And, if someone was earning $7,000 in '68, they could also buy a new car for $2500 to $3000. Today someone earning $70,000 would have to pay $25,000 to $30,000 for a new car.
Duffer
11:52 am on Friday, February 3, 2012
I will not buy gas from a station that charges more for credit. It's as simple as that. Just go to Wawa. They usually have the best prices in the area and they don't charge extra for credit.
KAREN A KINCAID
11:56 am on Friday, February 3, 2012
and while your filling up, you can also get coffee and a sandwich, and pay inside!! PLUS, it's not owned by.... well you know!! So no franchising. only reason why i go there!!
Howard Effron
12:17 pm on Friday, February 3, 2012
Free enterprise at it's best. That's what makes this country the greatest in the world. If you don't want to buy from the guy that charges more for credit, you don't have to! If the guy wants to charge more for credit, he has that right! He put up his money to run his business the way he wants, the consumer and his bank account will tell him if he made the right moves. But please, leave Congress and the politicians out of American business, they can't even run the country!
Rick
4:19 pm on Friday, February 3, 2012
Well said Howard.
ALL businesses pass along their cost of doing business. They add in transportation costs, rent ect.
When you see a price online that looks lower than what you see in the store it looks good,
until you add in "shipping and handling" charges.
BeyondReality
4:07 pm on Friday, February 3, 2012
I refuse to buy gas from anyone who charges more for using a card. I dont carry cash and shouldnt be punished for that. The price for merchant accounts should be paid by the business not the consumer.
Anyone who runs their business in that manner will not receive my business.
Sean Conneamhe
8:12 pm on Friday, February 3, 2012
"Wawa--good gas prices, free ATMs, and dollar coffees."
Bob Hauser
5:30 pm on Saturday, February 4, 2012
Watch out for stations that hide the price difference between credit and cash. Many folks just look for the lowest price on the roadside sign and think thats the price they'll pay for regular on credit...not so. Just go to WAWA. Even at 4 bucks a gallon a while back there was no price difference