Gas stations overehelmed by credit charges

July 2, 2008 6:04:51 PM PDT
The soaring cost of oil is sending tempers flaring at Bay Area gas stations, which are being squeezed by reduced demand for gas and by the fees they pay for credit card transactions. They want congress to move quickly on a pending bill.

It's not just consumers begging for relief at the gas pump. So are gas station operators like Tom Robinson. He's the president of Rotten Robbie with 34 locations in the Bay Area. He wants relief from the fee he pays Visa on credit card transactions.

"The credit card interchange fee on a gallon of gasoline right now is right in the two percent range. So, if you were to look at a $4.50 gallon of gasoline, it's about nine cents a gallon," says Robinson.

That fee, of course, covers the cost of processing the transaction and the service both to the dealer and the customer. However, gas retailers and other merchants are supporting a bill in congress to get a break.

"The most important portion of this legislation allows retailers to get together to negotiate collectively with the credit card companies," says Robinson.

Visa points out it lowered the interchange rates for gas stations last week. The new fee for a 15 gallon $60 fill-up will be 94 cents, a drop of 14 percent.

"We're a Bay Area company. We get how expensive it is to fill up the tank. I feel the pain every week when I do it myself. We stepped in to lower the rate on interchange for gas stations because we saw how expensive it was, plain and simple," says Visa spokesperson Jason Alderman.

Credit card fees are built into the cost of gas, so consumers tell us they embrace lower fees.

"I would agree that they should definitely re-negotiate that because we're paying for it, and we're already paying a lot of money for gas," says Santa Cruz resident Erik Gundersen.

Rotten Robbie's owners say they're getting squeezed, too. Gas sales are down three to five percentand sales of snack food and beverages are flat. Customers are even using credit cards for food.

"The bill is making its way through Congress, but there's only six weeks left in the current session, and the bill could end up dying if Congress doesn't move quickly.


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