Friday, June 27, 2008

High prices, credit-card fees force some rural gas outlets to shut down pumps or card readers

Rural drivers may find it more difficult to find gasoline in their community, Marci Royal Huggins writes for The Fayetteville Observer. Several gas outlets in North Carolina's Cape Fear region have stopped selling fuel, and others are considering it, because of fees charged by credit card companies. "Somebody's got to do something," station owner Tony Coats said. "It hurts everybody. It puts the little man out of business."

"While gasoline may have doubled in the past year, the stations that sell it to you are operating on an even slimmer profit margin, especially when customers use credit cards to pay for their purchases, reports show," Peter Williams writes for the Richmond County Daily Journal. "Stations that might have made a profit of 10 cents per gallon on a cash sale a few years ago now find themselves actually losing money selling gas to customers who use a credit card." Companies are charged between 2 and 3 percent per transaction. Many customers assume that $4 per gallon gas results in high profits for gas stations.

"People don't understand," station owner Boddy Wiggs Jr. to,d Williams. "If I use credit cards at the self-service pump, I lose money. I pay $300 to $600 a week in credit-card fees. I know a couple of friends who have stopped selling gas for that reason."

Some gas outlets are convenience stores that may survive food and drink purchases, but many of their customers are cash-starved, which makes them more likely to pay with credit cards at the pump and not enter the store. "The problem with higher gas prices is it leaves less discretionary spending, so maybe when you get gas you can't afford to go inside and bu the other items that you would have before," said Gene McLaurin, a spokesman for Swink-Quality Oil and Gas in Rockingham, N.C. "You may not be buying that Coke and the pack of crackers. I've talked with other oil distributors who said this is the worst market conditions they've ever seen. If you go drive around the countryside you will see old abandoned gas stations, and I think you're going to see another round of that, but it will be convenience stores in a lot of rural areas."

One alternative to closing is to cease taking credit cards. Rural stations cannot always benefit from discounted loads because the cannot fulfill a full 8,000-gallon tanker load. "I'm honestly afraid we're going to see another round of small, independent stations going out of business," McLaurin said.

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