Let’s hear it for this gas price bait and switch!

November 20, 2012

Cheaper isn’t always better.

On a recent trip to Bend, Ore., I discovered that cheaper can actually mean more expensive.

The scam was perpetrated by a service station selling unleaded gas that’s 10 cents lower than the other stations along the road. With gas prices pushing $4 a gallon, a 10-cent saving is nothing to sneeze at.

So I pulled in to the service plaza, and before I could whip out my credit card, an employee walked over said, “I’m sorry, but our credit card machine isn’t working.”

No problem, I thought. We’ll do this old school. I’ll just go inside and give the attendant my card.

And that’s when the scammy gas station sprang its trap.

A small sign near the counter informed me that this particular station didn’t accept any of the major credit cards — only a debit card, to which it added a 50-cent transaction fee.

By the time I’d done the math in my head, I was at the front of the line, at a less-than-honest gas station with an empty tank of gas and a family that needed to be fed lunch.

But the numbers worked out like this: The gas station was charging me a little more than its competitors, once you factored in the ATM fee. And after adding the transaction fee from my bank, I was overpaying for the fuel in a major way.

Ridiculous? Many of you will agree. Some of you won’t. Some of you will say, “Hey, that’s the free market. You could have gone somewhere else.”

To those of you who feel the gas station — which shall remain nameless because it doesn’t need any free advertising — was being completely ethical, I have just one thing to say to you: You’re wrong.

It would have been one thing if the ATM fee had been clearly disclosed before I pulled up to the station. But instead, I was told the machine was “broken” (later I asked how long it had been down, and learned it had been many months). The signs warning of the ATM fee were small and inconspicuous, one inside the store and the other near the pumps, but in small lettering.

Now, to be clear, there’s nothing illegal about any of this. But unethical? Yes.

And this kind of absurdity repeats itself in other parts of the travel industry as well. It’s the party of five that eats at a restaurant, only to discover that a “tip” of 20 percent has been added to their bill. (Check the fine print on the menu, it’s disclosed there, and by ordering from the menu, you agreed to it.)

It happens in airlines and hotels, too, whether it’s the surprise $100 fee to carry on your bag or the mandatory “resort” fee your hotel failed to mention.

The smart customers among us might suggest that if we were just as enlightened as they are and read every contract more carefully, heeded all the warnings, then we wouldn’t fall for this nonsense. But I take a different view. I think anyone can fall for a scam, and I include myself in that group. I think that while we should always be on the lookout for businesses that prey on helpless travelers, we also deserve to be protected from them.

You might not share my point of view. But when you’re standing at a gas station in Bend and you’ve been conned out of a few bucks by a fast-talking gas station attendant, maybe you’ll change your mind.

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http://www.facebook.com/profile.php?id=1275578005 Noah Rosenthal

@comanchepilot:disqus, you keep repeating that merchant agreements do not allow askign for IDs, but you leave out a key limitation: ONLY IF THE BACK OF THE CARD IS SIGNED. In my experience in retail (which, though rather extensive, is over 10 years old at this point), the vast majority of people do not sign the back of their cards. In fact, nearly as many people write “please ask for ID” in the signature block as actually sign it.
bodega3

Most of the agencies I have worked for never have had a machine to swipe nor does our family business. Our merchant account charging is done online, same at the agency.
bodega3

For airline tickets, we must have a copy of the credit card, front and back or a signature on file. ARC rules.
bodega3

Actually as a business owner, I have the right not to accept your credit card. Look, we are all in this together but it is the merchant who gets burned if the card is fraudulent and we haven’t taken steps to protect ourselves.
With checks, according to the local police, we must have a DL written on the check before they will even look at a bad check.
bodega3

Exactly!
bodega3

Also, if you have ever been burned by a customer, you might think differently.
Ed Boston

It is not legal. You can refuse to pay it if it is not disclosed. If it is a required charge, for example the California charge for computer screens, it still has to be disclosed. You could try disputing the charge and explain it was not disclosed.
Ed Boston

And did you realize, as a merchant, you are not allowed to accept cards that do not have a signature? If all they have written is the “Ask For ID”, you can’t process it until they sign it and yes, in this case, you can require ID.
Ed Boston

So it sounds like your business isn’t even the type we were talking about this rule applies to. You don’t have a store front where people walk up and hand you a card and you get a confirmation number from the credit card company.
Ed Boston

In your situation, yes you have to have the ID. Your business was not the type being discussed about the ID rule. The rule does have a clause about requiring ID *IF* it is a transaction that requires ID by law, like alcohol and tobacco. But a regular store front type business, they are not allowed to require ID.
Ed Boston

Actually, according to your agreement with the credit card company, you *DO NOT* have the right not to accept a customers card. Your business is not the type that was being discussed with the ID issue. And with the DL written on a check, in California, that is a violation of State law.
Ed Boston

If you have been burned by a bad transaction, it is because you did not follow the rules.
TonyA_says

Actually we are supposed to have a SIGNED COPY of the UCC Credit Card Authorization Form. Since that is (close to) impossible to get, to protect our behinds, we make the customer sign nd fax a credit card authorization form, the front and back copy of the card, and a State-issued ID. Card must be issued by a US bank (Warning: Barclays cards are UK), and we Address Verify.

If I don’t get all the above, I don’t sell. People are free to buy from someone else and hopefully do not get screwed by them :-)
I couldn’t care less what Visa/Mastercard/Amex says because the real merchant is the Airline through ARC Corp. (An airline obviously checks your ID for TSA purposes so go ahead and complain. ha ha ha)

I have returned my swipe machine many, many years ago since it is a pain in the rear to maintain it and the paper. No reason to have it unless the customer is coming to the office where you can swipe the card. Moved to online (terminal) since then. But recently we considered getting rid of that, too, since it served very little or no purpose when all we do is key in the customers credit card number in the GDS or on other supplier’s sites.

Also want to clarify the Debit Card MERCHANT FEES. Different vendors TYPES have different arrangements with their card processors. Large supermarket chains, I believe, pay the least percentage fees. Gas Stations (AFDs) pay more than supermarkets. But the vast other type of merchants pay at least 2% of the sale to card processors. Visa/Master already will allow (some) merchants to add a card usage surcharge. That is part of the settlement they had with huge vendors. When people complain that a gas station adds 50 cents to a debit card charge, they need to understand WHAT A VENDOR IS GOING THROUGH paying the banksters just to use their networks. Don’t get mad at the vendor, get mad at the banks and the money networks.
TonyA_says

Ed, I’m curious, are you a vendor with a merchant account?
I am sure you read about all the FRAUD perpetuated on vendors with fake cards.
If we know our customers already, we go easy. But if someone with a thick
“Nigerian” accent calls or wants to buy a ticket to that part of the world, we ask a lot of questions. We chose to whom we sell or we might lose our shirt.
bodega3

I do own a store front business that takes walk in business. We process all credit card charges through a POS merchant account online, similar to the brick and mortar agency I work with. We process service fees online though a merchant account. Both gives me a approval number or declines the card.
bodega3

No DL, no acceptance of the check. All businesses here require it. One agency I was with took a check and no DL and there was nothing the police could do.

I certainly do have the right not to take a credit card. There is nothing in our paperwork about having to accept any card.
bodega3

No I we were burned because the jerk who wrote a bad check filed for bankruptcy and closed his business. Since that happened, our county has now opened a bad check department in the District Attorney’s office that has been very helpful for merchants. We are more cautious now, use small claims (successfully!) and also use a collection agency.
Ed Boston

I used to work at a store front where we took CC. The owner had several cards used over the time I was there that had been stolen, but not reported yet. Because we had the authorization number on each of those transaction, they were covered and we got our money.
bodega3

I just checked and it is not a violation of State Law for a DL to be requested, plus it can be written on the check.
Ed Boston

If you are not swiping a card, you fall under a different set of rules. But I have never experienced a store front that didn’t have a terminal to run the transaction. When you don’t have a card swipe, there are a different set of rules that get applied in regards to fraudulent charges.
Ed Boston

You have to remember that those comments were made *BEFORE* you disclosed the information about the business you have. If you look back at my posts, I posted a link to the MasterCard Rules and it says that a merchant *MUST* accept a properly presented card. Your business falls under the clause in the rule that covers purchase of items that require ID to be presented.

And for the DL, I said in the State of California. If you are not in California, you state laws may be different.
Ed Boston

When did checks come into the discussion? The discussion was about CREDIT CARDS companies having rules stating that merchants can’t require ID. Checks are a whole different matter.
Ed Boston

Did you not note that I said that was in CALIFORNIA?
TonyA_says

Ed, the Patriot Act required airline travel agencies to “KNOW THY CUSTOMER” – meaning to collect ID info and lookup some database. But the Treasury was assigned to make the rules and they did not include travel agencies in the enforcement of the law. Asking ID to buy an airline ticket (if they do not know the customer) is SOP for almost all travel agencies who want to protect themselves.
TonyA_says

If you do NOT swipe the card then you have no protection, period.
TonyA_says

You SWIPED and got authorization code, that’s why.
With CARD NOT PRESENT (CNP) there is no guarantee.
y_p_w

There are several chain restaurants (Chevy’s, Denny’s, Olive Garden, Ruth’s Chris) in San Francisco that aren’t fast food. While they do have standardized menus, almost all chain restaurants have custom printed menus for each location, complete with different prices and sometimes different menu items. I have been to Cheesecake Factory, and they constantly reprint menus for changing menu items and prices.

If they’re not including a disclosure, it’s not because they can’t put it in. They can easily customize their menus. For CF, they would simply need to add a “notebook page” to their menu. I have been there (upstairs in Macy’s Union Square), and decided against it when I was told the wait for a table was 2 hours.
y_p_w

The merchants prefer the PIN based transactions because it costs them less. Visa prefers the signature based transactions because they can charge a percentage like they can for regular credit cards. I don’t know if the banks really care either way. With most point of sale terminals, they’ll ask if you want credit or debit. I’ve even seen some disclaimers taped to the terminal asking that the customer use debit if possible.

http://epx.com/blog/2010/the-surprise-demise-of-pin-debit-debit-networks-have-been-quickly-diminishing-the-cost-advantage-of-pin-vs-signature-debit/

How it all gets sorted out by the bank and service provider is too complicated for me to understand.
bodega3

I am in CA and our local police told us to get the DL plus I looked up the law and it isn’t a violation in CA.
Ed Boston

Yeap. You’re right. The Song-Beverly Credit Card Act only covers recording credit card numbers on checks.
TonyA_says

Good article. Even if it LOOKS the same to me as the customer, I would like to know which method least penalizes the vendor. Since I make it a point to buy from family owned local stores as much as possible, then I would like to do whatever it takes to make them survive. I think they would prefer cash.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

That’s because those store employees were poorly trained and.or sloppy. Bodega, who is neither poorly trained, nor sloppy, would not operate that way, so the comparison fails.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

All commodities are priced that way.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

The story states that at the time Chris paid he had an empty gas tank along with a hungry family. That suggests away from a prepay situation.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

If they can. The competition in an area might prevent that. A nearby Arco perhaps which does not acccept credit cards might put a crimp on those plans.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

The problem is that using a PIN generally gives you little or no protection if the purchase goes bad. Even with a Debit Card, you can dispute a transaction
TonyA_says

Don’t you guys in CA use Telecheck or something like that.
You need to input DL to check.
TonyA_says

In that case he’s lucky he found a gas station :-)
Ed Boston

Actually, because of the business Bodega is in, where the ID is a required part of the transaction because of Federal Law, his experience was not part of what was being discussed.

But as for the poorly trained sloppy employees, that is why the credit card companies don’t want merchants to be ID police. The clerks are not trained how to check for ID. I had one representative from MasterCard explain to me that if they had a case of fraud and discovered the merchant was asking for ID, even though the merchant did have an authorization number, they could charge it back to the merchant because they were violating the rule.
y_p_w

For whatever reason, ARCO stations don’t seem to put other gas stations out of business. In my area there’s an ARCO station (used to take credit cards but I don’t know if that’s true now) right across from a Shell station. Both have stayed in business for over 25 years, even though right now that Shell station has prices about 40 to 50 cents higher per gallon. I actually wonder how they stay in business since that Shell station has prices right now that are about 30 cents per gallon higher than the other “name brand” gas stations less than a mile away.

Heck – there’s even a gas station where the gas is almost a dollar per gallon higher than any place else nearby. They get some retail business, but I suspect the prices are because the city has a contract to fuel up there. There might be a volume discount, but they probably base it on the retail price.
http://twitter.com/dotcah dotcahill

they should not be allowed to accept credit cards and should be out of business ..u should name them maybe some of the cc companies will hassle them…
http://www.facebook.com/CarverFarrow Carver Clark Farrow

My understanding is that gas station barely break even on the gas. They make money on the concessions. Which makes sense as gas stations tend to be clumped together in close proximity and comparison shopping is easy as the prices are prominently displayed.
ajaynejr

And all the while I am arguing with the clerk, my car sits in front of the gas pump. I don’t know how long it will take and I’m not about to use up gas and time moving my car and losing my spot in line.
http://www.facebook.com/BarryMichaelGraham Barry Graham

Not if you don’t have any gas in your car! If that weer the case I’d buy what I needed (and pay cash) to get safely to the next station.
Opinionated12cents

great point
http://www.facebook.com/profile.php?id=1275578005 Noah Rosenthal

Yes, I do realize that. Totally non sequitur to my point.
Ed Boston

Well, given that the conversation was about properly presented cards, and your example was about something covered by another rule, I would say that your response was the one that was non sequitur.
oldpro

or just hand over ,with a “sweet smile,” 75¢ or whatever small change is in your pocket…let the station use it’s time and tie up a pump…be sure to wash ALL your windows, too!

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