A recent Huffington Post story reports on some gas stations on Long Island in New York doing something unconscionable: charging an extra $2 or more per gallon of gasoline for paying with a credit card.
Gas stations are allowed to charge a higher price for a different method of payment, and so far there is no law stating that gas stations in New York can’t do this. New York law allows discounts for cash, but not credit card surcharges. A prior story about this same issue from newsday.com contains this interesting tidbit:
The attorney general’s office said Tuesday that none of the stations
were prosecuted because the law doesn’t specify how to calculate the difference between a discount for cash or a surcharge for credit.
Before you wipe your brow and say “glad I don’t live in New York”, many other states including Texas have (or at least had) similar laws on the books. This ambiguity in the law appears to be a “get away with it” card for the gas stations who want to cash in on the convenience of paying with plastic.
I think it’s bad enough that merchant fees now allow a minimum for credit card purchases of up to $10 depending on what the merchant wants to set. Back when I had something of a blog about personal finance (I never really got it where I wanted it in terms of readership), these minimums were flat out forbidden by Visa and Mastercard, and were technically allowed by American Express and Discover if they applied to all credit cards equally (in practice, unless the merchant only took AmEx or Discover, it was still forbidden). These limits were struck down shortly after I closed the blog to new entires.
Cash is good for some things: buying into a home poker game, refreshments at a ball game, bus fare, coffee shops, fast food, etc. (Though there are cases for some of these where I’d prefer to pay with debit card even then.) But I think expecting the motoring public to carry cash with them to buy gasoline–which these days in the US, often implies at least $50 for a fillup–is ludicrous. If there is a valid reason for fees being this high, it needs to be addressed. If it’s what I think it is (that being pure greed) then it needs to be legally reined in somehow.
I would like to see cash remain an option for buying small amounts of gasoline or other motor fuels. However, it should not be the only choice. Indeed, since I don’t think gas stations take checks anymore, bilking credit and debit card customers for $2 per gallon would make cash the only real choice. And the law needs to catch up to the fact that there is really little difference between a discount for cash payment and a surcharge for non-cash payment. Trying to forbid the latter and allow the former is crazy when most people consider them one and the same. Either call them surcharges for non-cash (credit/debit) or cash discounts, and limit the allowable amount to something reasonable which would adequately cover the difference in the merchant’s costs in accepting one over the other.