Credit Card Only Stores? Whatcha think?

I've noticed that Covid has rapidly accelerated the move to a cashless society. I've went to a college football game last weekend. The tickets were all electronic, the college student union was credit card only and some of the places only took online orders. Picture a coffee shop where you ordered and paid electronically and picked up your coffee at a window, no in person ordering at all. The stadium vendors were all electronic as well.

1 Reply

@engineer,

Yeah, we have a car wash that went to all "card" only transactions due to Covid. Do you ever get the feeling that many companies in retail are using Covid/pandemic as an excuse to do exactly what they always wanted to do?

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1. I noticed something while I was pumping gas in my car today.
2. It was probably always there. I probably just never noticed it.

Right above the fuel nozzle I read the following:

Due to the rising processing charges for debit and credit transactions,

there is now a discounted fuel price for customers paying cash.

1 Reply

@Real Music,

It's probably always been there. I know of several stores that will pass on part of the 2% transaction fee on to customers who pay cash, usually Mom and Pop places. You can do that when shopping for big ticket items too if you go to a place where the prices are negotiable.

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1. It appears that businesses are charged fees for every debit or credit transaction.

2. It appears that businesses avoid those fees when customers pay in cash.

3. It appears that Banks and credit card companies are the ones who are encouraging cashless transactions, because they are the ones making money from those transaction fees.

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@Real Music,

Real Music wrote:

1. It appears that businesses are charged fees for every debit or credit transaction.

Yep. Those fees are around 2%.

Real Music wrote:

2. It appears that businesses avoid those fees when customers pay in cash.

True, but they incur other fees including maintaining security, internal theft and labor for handling and depositing the money. That doesn't even account for all the headaches of accepting checks.

Real Music wrote:

3. It appears that Banks and credit card companies are the ones who are encouraging cashless transactions, because they are the ones making money from those transaction fees.

It comes from both sides. The banks want to get the fees, sure, but also avoid all the in person transactions from handling all that business cash, providing and counting coins, etc. The businesses want to avoid all those things as well and reduce the need for staffing just to handle money. That is why they want a cashless system. They can't maximize their efficiency as long as they still have a duel system. For many businesses, paying 2% is a small price to pay to reduce all the cash overhead.

1 Reply

@engineer,

1. I hear everything you are saying.

2. And you have articulated some good points.

3. Do you have any theories of why the convenient store gas station would offer a discount to anyone who pays for gas with cash?

4. Wouldn't the Convenient store gas station follow your reasoning by wanting people to not use cash for the reasons you have articulated.

5. They are making a business decision to reward and incentify its customers to buy gas with cash.

6. It would appear that with everything that you have articulated, the gas station convenient store still prefer that its customers buy gas with cash.

7. Do you have any theories of why the gas station convenient store isn't doing the opposite by trying to discourage its customers from buying gas with cash?

8. Or at the very least , not encouraging cash payment with discounts.

9. I am not a business expert.

10. I don't claim to be correct.

11. I am only forming these conclusions based on my observation.

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1. For the record, I use various methods of payment transactions

2. I sometimes use debit card.

3. I sometimes use credit card.

4. I sometimes use cash.

5. I greatly appreciate having all of those options available to me.

6. The keyword being 'ALL'

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@Real Music,

I can offer opinions, whether they are right is always up to debate. Gas stations that offer discounts for cash used to be very common, especially after the gas shocks of the 70's and early 80's, but they started to disappear when the credit card pump was invented. Now a gas station can have 8, 12, 16 pumps with just one or two attendants because people don't have to go to the register to pay for gas. You definitely don't want to incentivize people to not use that feature. But there are still small gas stations out there, mom and pop type places with a few pumps, that want you to come inside so they can save the 2% credit card fee and maybe get you to buy something else while you are there.

Maybe we should take a poll, how many stations of the ones you regularly use offer discounts for cash and how big would you say they are? The two I primarily use are large (12 and 16 pumps) and do not offer a cash discount. Our favorite stop between here and Raleigh is also large with no discount. I'll keep an eye out for others, maybe go looking for smaller stations to see if it matches my hypothesis.

1 Reply

@engineer,

We have some towns that do not allow the average Joe to pump their own gas. Weird huh? I guess they do not think we are capable of doing this safely.

Those towns are where I see the most that provide cash discounts for gas and charge a higher price for credit.

Not sure if this is the case 100% but yes I do know many of the gas stations in these towns offer the lower price for cash. In my town I have not noticed any that offer this difference or one of the other towns next to me - these are a handful of gas stations I tend to go to just that are in my usual driving route and tend to have either the standard price or maybe a few pennies less.

1 Reply

@Real Music,

Quote:

1. It appears that businesses are charged fees for every debit or credit transaction.

Debit transactions aren't charged a fee where I get gasoline, but credit purchases are. I think this is because debit transactions, like cash, are immediately deposited in the creditor's account.

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@Linkat,

In my limited experience, that is what I've seen as well. The savings of the cash transaction is not passed on to the consumer, it is kept by the business. I see this in taxes as well. NC has higher gas taxes than SC but stations just inside sthe SC border tend to charge about the same for gas and the NC stations because that is their competition. It is only when you get twenty miles or so over the border that you see the price drop.

1 Reply

@hightor,

Could be, but that is strange to me since the processing fees for debit are only slightly lower (1-1.5%).

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@hightor,

hightor wrote:

Quote:
1. It appears that businesses are charged fees for every debit or credit transaction.

Debit transactions aren't charged a fee where I get gasoline, but credit purchases are. I think this is because debit transactions, like cash, are immediately deposited in the creditor's account.

You can use your debit card like a credit card (instead of entering your pin you select credit) - I believe if you use it that way there is a fee associated with it.

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@engineer,

engineer wrote:

In my limited experience, that is what I've seen as well. The savings of the cash transaction is not passed on to the consumer, it is kept by the business. I see this in taxes as well. NC has higher gas taxes than SC but stations just inside the SC border tend to charge about the same for gas as the NC stations because that is their competition. It is only when you get twenty miles or so over the border that you see the price drop.

More than likely also supply and demand is factoring in - for instance when you go to a gas station just off the highway, the gas is typically higher than if you drive a few miles further.

1 Reply

@Linkat,

My thoughts exactly. Supply, demand and competition sets the price, not vendor costs. Some of this is in play in places that charge extra for credit transactions. They are advertising the same price as the station down the street and hit you with the extra charge when you are already at the pump.
The pump price is the "credit price" from the other stores then they hit you for a credit surcharge again.

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Credit Card Only Stores? Whatcha think?

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