Kevin Hunt: Cash Vs. Credit (Gas) Or Consumer Vs. Business?


Consumers have a voice, especially in the we're-in-this-together world of The Bottom Line. So after a recent column about cash vs. credit gasoline pricing in the state (read it at cour.at/12vmB9X), we're turning this one over to you:

"Your Aug. 25 column seems to support the notion that consumers are getting a 'discount for cash' vs. a 'surcharge for credit.' The concept of 'discount vs. surcharge' is a 'glass half-empty, half-full' conundrum.

"Any reasonable observation of the marketplace [reveals] certain stations are really charging a 'surcharge for credit.' The original discount for cash concept is a failure, and the reality is that the stations are charging a surcharge for credit card use."

Chris Bertellotti, New Britain

"Here is what your column missed: Legislators were amazed to find out that the credit card companies who make billions on credit card fees prohibited retailers from offering cash discounts if they took credit cards. They also tried to prevent the public from knowing this information by saying in the credit card agreement that retailers are forced to sign from disclosing this information.

"Just two years after Connecticut passed this law [in 2008], the federal government also passed a law saying all retailers can offer a cash discount and as such made this part of the credit card agreements void. Consumers need to know what the cost is of using a credit card and then and only then will credit card companies reduce these fees.

"Why should business owners and consumers be forced to pay these huge fees without any choice?"

Michael J. Fox, Executive Director, Gasoline & Automotive Service Dealers Of America, Greenwich

"We spend about six months each year at our home on Seabrook Island, S.C., and the remainder of the time at home in Southington. In driving back and forth (four states), there has never been a difference between cash vs. credit price per gallon on gas purchases!

"In Connecticut, most local stations charge 6 to 8 cents more for use of a credit card. This, of course, is on top of the second-highest gas prices in the U.S. (because of state tax). There is consistently a 40- to 50-cent difference between South Carolina and Connecticut.

"The only reason I can imagine is that the state gas retailers association lobbied for this issue, which obviously is trying to preserve profit margins at the expense of the consumer. I have contacted my state senator, Joe Markley, and am still waiting for an answer."

Bob Morton, Southington

"If you look way back, we had a two-tier pricing system once technology evolved to allow this at the pump. Then-Attorney General Richard Blumenthal rendered an opinion that the two-tier pricing was actually a surcharge for the use of a credit card so gas stations had to reverse their technology to only have one price per grade. Then, just prior to his senate run he reversed his opinion and allowed stations to have the two-level pricing again.

"All of us in business face the issue of increased costs for credit cards, but most people expect to pay by credit. There is another interesting take on that. Certain credit cards that provide greater rewards or airline miles cost businesses more to process. So who is really paying for those pumped-up rewards? Not the credit card company, but your local business."

Stuart Lieblich, DMD, Avon Oral and Maxillofacial Surgery

"Cash discounts for fuel are not common in Massachusetts, so this was new to me when I moved to Connecticut. I was disappointed to find that my local Citgo station does not include debit cards in the cash discount, but assumed that it must be lawful to exclude them.

"Reading the statute quoted in your Sunday column made me wonder, because only credit cards were specifically mentioned and the language seemed to implicitly cover debit cards under 'cash, check, or similar means.'

"Looking up the latest text of the statute (read it at http://1.usa.gov/1fjNsbt) I find that the language has been clarified.

"Even this updated version of the statute may be ambiguous whether the discount, if offered, must apply to all categories of 'cash, debit card, check or similar means.' If debit cards can be excluded, I think filling stations ought to explicitly say so by posting a 'credit/debit' price rather than just 'credit.'

"So is it a violation for filling stations to exclude debit cards from their 'cash' discount?"

Dana Sawyer, Colchester

No, it is not a violation. State lawmakers did, however, discuss two bills earlier this year that would have made debit payments eligible for cash discounts. Gas retailers opposed the bill because of associated fees with debit payments.

"In June, I drove from Wallingford to a military reunion in Tennessee in my Explorer. I filled up here in Wallingford at a Citgo station that does not charge that fee and I did not pay any additional fees at any fuel stop between Connecticut and Tennessee.

"My personal opinion is the state allows the store to apply the additional fee so that their customers have to go into the store (they're no longer service stations) and make secondary purchases. I refuse to buy anything but gas at those places that charge the additional fee."

Ray Gomes, Wallingford

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