Soaring gas prices have driven so many motorists to use plastic at the pump that gas station owners are offering discounts to customers bearing cold, hard cash.
Retailers have to pay now-exorbitant fees for every credit-card transaction, while more credit-card transactions also cause delays, so a growing number are offering up to 8-cent-per-gallon breaks.
Hit hard by what he estimates will be $90,000 in fees this year to AmEx, Visa and other major cards, Arnold Grimaldi launched such a discount two month ago. Since then, sales have risen 20 percent as more and more fed-up customers rumble across his Roslyn Car Care Station on Long Island.
Forest Park Service in Queens also began offering a 6-cent-per-gallon cash discount two months ago. Its cash sales, too, are up 20 percent, while credit-card transactions have dropped 35 percent, says manager Paul Weiss.
“It was slow getting started, but now that a lot of stations have broken three bucks a gallon, our $2.75 discounted price has been packing customers in,” Weiss told The Post.
But not all customers approve of these breaks.
“A lot of them think because our cash prices are lower, we must be jacking up the cost on credit-card transactions,” said Grimaldi. “The challenge is to make them realize our prices are on par with the competition – just less when they pay cash.”
“Our credit customers are upset, but what we’re doing, providing a discount for cash, is legal,” said Weiss.
Many owners, meanwhile, don’t realize that discounts for cash are an option, due to confusion about a state law that says they can’t charge more for credit-card purchases.
But as Ralph Bombardiere, director of the Gasoline and Automotive Service Dealers Association of New York, points out, it’s perfectly legal to discount for cash transactions.
He says that since gas prices began shooting through the roof in June, he’s been getting many calls from retailers asking how discounts for cash work. He estimates there are nearly 100 stations in the New York area now offering discounts for cash. Last year, there was none.
Most owners point to high credit-card fees as the reason for jumping on the bandwagon.
At $3 per gallon, they must fork over about nine cents on every gallon purchased with plastic – leaving them with razor-thin profit margins.
That’s a steep jump from about three cents per gallon they paid just a few years back, when gas was under $2 a gallon.
“It’s all found money for the credit-card companies,” said Grimaldi. “They’re not working any harder for it. But we’re getting slammed.”