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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y_p_w

It’s perfectly legal now under California law. I believe any merchant agreement in California either can’t contain such a requirement or that part would be unenforceable. A retailer can’t record the information, but they can make photo ID a requirement to accept a credit card.

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=civ&group=01001-02000&file=1747-1748.95

“1747.08. (d) This section does not prohibit any person, firm, partnership, association, or corporation from requiring the cardholder, as a condition to accepting the credit card as payment in full or in part for goods or services, to provide reasonable forms of positive identification, which may include a driver’s license or a California state identification card, or where one of these is not available, another form of photo identification, provided that none of the information contained thereon is written or recorded on the credit card transaction form or otherwise. If the cardholder pays for the transaction with a credit card number and does not make the credit card available upon request to verify the number, the cardholder’s driver’s license number or identification card number may be recorded on the credit card transaction form or otherwise.”
TonyA_says

The Bank of America ATM with Debit Card allows the Debit charges to be authorized with PIN or with SIGNATURE depending on merchant. I think they use VISA but I am not sure how that works.
TonyA_says

Joe the issue is when the customer was ready to pay (AFTER PUMPING), they told him the credit card machine was broken and only the ATM/Debit option was possible BUT WITH A SURCHARGE (FEE). So if this was a PREPAY instead, the customer would have known about the surcharge BEFORE he pumped. He can decide whether to continue or go somewhere else.
Ed Boston

Yes. Been through this one before. The key is “does not prohibit”. It basically says if a merchant requires it, they are not violating state law. However, if the merchant agreement says that on condition of accepting the card, they cannot require, then they cannot require. The law does not overrule the agreement. If MasterCard finds the merchant is violating the rule and is requiring ID, MasterCard has the right to pull the merchants ability to accept MasterCard. So basically, under state law you have the right to. But under the contract you signed, you agreed not to.
TonyA_says

Chris can you check your figures one more time.

I thought that the merchant paid more than 2% transaction fee for CREDIT card sales and about 23 cents only for a DEBIT card transaction.

The logic is with a DEBIT transaction, the customer’s money is just moved to you. While on a CREDIT card transaction, the bank has to lend money out.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

My understanding is that your card associated with your checking accout is one of more of the following:
1. ATM Card. Withdraw Cash
2. ATM with Point of Sale. Allows you to make PIN based purchases
3. ATM with VISA/MC Logo. Allows the transaction to be processed using the Visa or MC systems.
Today, the default at many financial institutions is a card with all of the above although it is possible to get one of more functions removed. A long time ago, #1 was the default, you could add #2, and sometime you had to apply for #3.
I don’t know when was the last time I say a checking account card that didn’t have all of the functions as the default.
TonyA_says

I believe you.

#3 Visa/MC SIGNATURE (offline, you sign like a credit card) Debit.

#2 PIN based (online) Debit using something like Interlink or another network. I believe the law requires the bank to use at least 2 unaffiliated network.

#1 use the automated teller to get cash.

I asked BA to get me #1 only. They looked at me as if I was nuts but they gave it to me anyway. Problem is I hate having to remember my PIN code so even #1 is no good for me. I am the type of person who uses the teller and always forgets my PIN code so I need to show ID.
Come to think of it. I don’t remember my BA and Citibank ATM PIN codes, so my dear wife gets the cash for me:-)
http://www.facebook.com/CarverFarrow Carver Clark Farrow

In my mind, the terms ATM and Debit refer to usage. My card is an ATM card when I use it to withdraw money. It’s an ATM or Debit card when used to make PIN based purchases, and a Debit card when used to make signature based purchases (i.e. Visa/MC)
Basically, I never call it a Debit card when withdrawing money from an ATM, and I never call it an ATM card when using a signature based purchase.
I don’t know if those designations are technically correct.
sershev

Sorry, I mean don’t accept credit cards. they do accept cash
Jeanne_in_NE

What’s her cut? ;-)
TonyA_says

I cook.
Jeanne_in_NE

My husband had to come downstairs to see why I was howling with laughter. Thanks for a bright ending to my day!
http://www.facebook.com/CarverFarrow Carver Clark Farrow

Yeah, I get that. Its the original post that seems wonky, even in the light of day. If you fill up at 20 gallons at $4.00 that’s $80.00. At 2.4%, the Merchant pay $1.92 to the CC company. At 50 fill ups per day that $96 per day paid to the credit card company. That’s about 35k annually that the merchant is paying to the credit card company, not $650.

I suspect you multiplied 20 gallons by 2.4% to get $0.48, (not .48 cents) but that’s mathematically meaningless as categories are being mixed.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

I agree 100%
technomage1

Yes, I was wondering about the cash, too. I always carry extra cash for those little wrinkles in life, but it seems that is a lost practice.
bodega3

If you refused to show me an ID at our business, if we were to ask, your purchase would be canceled. As a merchant, I have to protect myself. I don’t see what your issue is with it. I was asked twice by merchants just today and had no problem with showing it.
Tracy

I”ve noticed that more gas stations are going back to one price for cash and one for credit again. I remember it being that way when I was a kid and I’ve noticed it again over the past six months or so.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

I found out something interesting which I had never considered. The higher the gas prices, the less money the station makes. How is this possible? The markup for stations is relatively fixed regardless of the gas price. But as the price rises, they pay more in credit card fees.
bodega3

We had a gas station as a client and were surprise to find out how little per gallon they actually make. The one out here by us when it was a Texaco station, asked people to apply for a Texaco card as they paid less in fees than if you used MC, DI, VI or DS, which cost them a lot more to accept.
bodega3

When I was a kid, we would get gas at the local corner station and just sign our name to a tag. At the end of the month the owner would total the receipts up and my parents would write the owner a check. We did the same at the corner grocery store. We never paid with cash and credit cards weren’t even used back in the dark ages.
grannana

in hendry county fl. they charge 5 cents a gallon extra if you use a credit card. the signs are small but when you put your credit card in the price goes up.
http://flyicarusfly.com/ Fly, Icarus, Fly

I think the point is that both he couldn’t use his credit card (which would’ve been free) when the gas station advertised he could AND he had to pay the transaction fee levied at the station in addition to his bank’s fee. While the bank fee isn’t on the station, they’re complicit in that they forced him to use the debit card without prior warning.
http://flyicarusfly.com/ Fly, Icarus, Fly

What’s a liter? (I jest.)
http://flyicarusfly.com/ Fly, Icarus, Fly

Not abuse, but reality check. If you were single, in a normal mood, then yes. But if you have a carload of hungry kids, have waited in line, etc., then paying $2 or whatever more isn’t as much of an issue. I’m sure we ALL have paid extra for something just because we couldn’t be bothered. Doesn’t mean we like it!

(When I first moved to Cambodia, a local friend was helping me buy a cell phone. We drove all over town to like four shops. In the end, we saved $2. I was like: WTH?!? But to him, it was worth it…)
http://www.facebook.com/CarverFarrow Carver Clark Farrow

I’m with you. Much like the locks on my front door. It won’t protect against all criminals, but it will deter enough of them.
http://www.facebook.com/CarverFarrow Carver Clark Farrow

I stumbled across one ARCO station that accepted credit cards in my 25+ years living in California,
Ed Boston

The issue is when you agreed to accept MasterCard, you also agreed *NOT* to require ID to complete a transaction. By requiring ID, you are in violation of MasterCard rules and subject to having you ability to accept the card revoked. Merchants expects the consumers to abide by the rules for using the cards they agreed to for using the card. Why do merchants feel they don’t have to give the same consideration to the consumer? Requiring ID gives absolutely *ZERO* protection to the merchant.
Ed Boston

requiring ID won’t deter anyone wanting to commit credit card fraud. The times I have shown ID for purchases that did require them (purchased online – pick up at store type), I just show it in the little windowed part of my wallet. Never had to take it out. I could have easily printed up a fake ID and put it in there and they would never have known the difference.
TonyA_says

Address Verification using the address from the Driver’s License does.
Maybe these are card not present sales. With swipe, the merchant is protected.
Ed Boston

Cards not present sales are not covered by the rule. That rule is for POS transactions.
Address Verification is for online type sales where the card is not present at time of purchase. Address Verification does absolutly no good at a POS since the merchant does not get the card holder’s address to compare against. And even with that, the billing address for the card does not have to match the residence address. And in California, when you move, you don’t get a new driver’s license. You just attach a note to the back of your license with your new address. So even if you had the card holder’s billing address at the POS, you still have no way of verifying against the ID.
TonyA_says

Ed, how about the zip code verification? My gas stations always makes me key thst in.
Ed Boston

That is actually a process put into place by the credit card companies, not the gas stations. Again, the merchant does not have that information and you enter the zip code of the billing address. I have one card who’s billing address is in San Jose yet I live in Los Angeles. Since I can’t produce any type of photo ID with the San Jose zip code, does that mean I am using the card fraudulently? This is why the credit card companies don’t want merchants to be ID police. I once had a business card that only had the business name on it. Anyone at the business could use it. How is the merchant suppose to check ID with that? The only way is for them to ask the credit card company if it is okay to do the transaction. That is the confirmation number they get back when they run the card through the terminal. It is the credit card company’s job to verify the valid use of the card, *NOT* the merchants.
TonyA_says

Ed, you just got me to read both the Visa and Mastercard guidelines for AFDs (i.e. Gas Stations).
Anyway, one quick thought. Anyone reading this and most of the articles here might get the impression that vendors are just a bunch of money hungry businesses that will do anything to “steal” from customers.
However, in my opinion, there is more fraud done by dishonest consumers out there. They can range from shoplifting, fake credit cards, nigerian scams, etc.
If you sell airline tickets over the phone, you will be amazed about how many try to buy with stolen credit cards. Also many dispute what they actually ordered because they FORGET what they say and do :-) During Hurricane Sandy, our phone system got hacked and someone made a ton of calls to the Carribean. So we did not only lose money due to no sales, we had to pay our long distance carrier for the fraudulent calls. Maybe we need a merchant advocate.
TonyA_says

I remember that, too. Life was simpler then. Now it is GLOBAL, meaning no one throughout the whole world trusts anyone. So, the banks and processors get to tax us 2-3% of everything we buy. Pretty stupid, ha? Need to go back to using cash.
Ed Boston

for me, i dont think of the merchants as money hungry businesses. but i refuse to do business with one that treats me as a criminal and have to prove to them it is my card. and they are not even the party with the right to determine if i can use the card.
y_p_w

Most will consider credit card fees in their markup.

Many stations are ticket off because of the high prices. People are stingier these days after paying $4 a gallon and aren’t buying the donuts and sodas that make the station owners their real profits.
Joe Farrell

Assumes facts not in evidence . . .
Joe Farrell

Ok – but most places do NOT require ID as a condition of accepting a credit card – its not posted anywhere – and if you use the self-serve checkout they don’t ask. So its merely an annoyance that they interject into human to human transactions . . .
Joe Farrell

Protect yourself from what? If you read your merchant agreement and follow what they tell you to do – you will not get a chargeback. You are not required and not allowed to ask for id as a condition of accepting a card. . . . there is no protection factor here. . .
Joe Farrell

Why would you have to pay for fraudulent calls? There is no requirement to pay for something you did not use.
bodega3

If we asked and you refuse, we would not sell to you. Do we ask? Almost never. But if we thought we should and were refused, we would cancel the sale. We don’t have a machine to run the card so no way to know if the strip is valid. All entries are through the computer.
Ed Boston

you dont have a machine but all entries are through the computer? do you enter the card info by hand? Are you a mail order business? I don’t see how you could have a store front and not have some sort of machine to swipe cards with.
bodega3

I have been in stores that have had signs saying two forms of ID would be required to make a payment with anything other than cash. Now cash is not even safe. Local banks around here are holding seminars on how to spot a phony bill as $5, $10, along with the larger bills. The crooks are getting good with using legal currency and changing the face value so even the counterfeit pens don’t work. For get about checks, Traveler’s cheques, too, as most small merchants won’t accept them.
Ed Boston

just because they put up a sign does not change the fact they are in violation of the contract they agreed to in order to accept the card.
BeckyAintheBay

Unless, like mentioned above, this was an Arco station (or similar) that has always only accepted cash and debit with pin (for $0.50). If this is the case, the attendant may only have been saying that the card reader at the pump was not working. Perhaps there was just some miscommunication between Chris and the attendant?
TonyA_says

LOL. Looks the males in the family are the misers. I do the shopping, too. My wife cannot see “SALE” signs.
TonyA_says

Unfortunately that argument did not work with our Service Provider. Cost me $2k in just 2 days. They called the same number in St. Lucia (758 area code) and Dominica (767 area code) again and again.

The phone company explained that CORRUPT CARIBBEAN PHONE COMPANIES (YEAH CORRUPT !!!) charge US carriers an arm and a leg to complete calls to their networks. So they pay hackers to go in private phone systems and call a number in the CARIBBEAN that is just some voicemail or answering machine THAT NEVER HANGS UP!!! Since PBXs have multiple lines, they make many calls at the same time!

If you use a PBX in your business, be careful!

I would never touch that place (Caribbean) even if you pay me. Good luck to those cruising there.
Joe_D_Messina

There are two fees mentioned–the 50 cents the merchant took and the fee he paid his bank for using his debit card. Chris says he spent more than he would have at a station charging 10 cents more per gallon. The 50 cent charge would only make that happen if he bought less than 5 gallons worth of gas, yet he clearly says the car was empty. He still comes out ahead on the deal if his bank isn’t ripping him off by charging him a fee to spend his own money.
Jeanne_in_NE

My apologies, Joe. I re-read the story and saw:

“And after adding the transaction fee from my bank, I was overpaying for the fuel in a major way.”

Okay, I don’t cuss much in public, but WTF? The BANK charged a TRANSACTION FEE to use its OWN card?!?!

Last month, I purchased a Travel Card from my local bank so that if my credit card acted up overseas (very, very long story) I’d be able to withdraw cash or make purchases until I got the matter straightened out yet again (told you, long story). The Travel Card looks and acts just like a regular debit or VISA card, but charges a 50 cent transaction fee for Every. Single. Transaction.

That’s the only scenario I can think of (using a Travel Card) that would explain why Christopher Elliott, author of Scammed, would have a bank card in his possession that charged him to actually use the card.
http://www.facebook.com/profile.php?id=1275578005 Noah Rosenthal

Here’s another example of such a fee, but this one, I think, is illegal. In San Francisco, many restaurants add a surcharge of 2-5% to pay for the “Healthy San Francisco” initiative, which is a City law requiring that all employers provide health insurance. I’m not a fan of the surcharges, but if they are disclosed on the menu, I think that’s fair enough. (I don’t really have a problem with the disclosure being in small print at the end of the menu, though I know others do. But that’s not what I’m commenting on here.)

Here’s the scam, though. Big chain restaurants have standardized menus. While there aren’t a ton of these restaurants in SF, there is a Cheesecake Factory. Cheesecake Factory uses its standard corporate menu at their SF restaurant. Obviously, no Healthy SF disclosure. But it’s on the bill. So, yes, the first time you learn about this fee is when presented with the bill. I cannot imagine that this is legal.

I’ve only experienced this at CF, but I imagine other restaurants (Chevy’s? OG?) may be guilty of this as well.

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