Cash Can Buy You Cheaper Gas

By Barbara Kiviat

In a throwback to the 1980s, when it was common practice to charge different prices for cash and credit, some gas stations are knocking a few cents off each gallon for customers willing to pay with paper, not plastic. That's because as the price of gas has soared, so has the amount of money that stations pay credit-card companies, which take about 2-3% of each sale charged. Since drivers are quick to defect to another station to save just a penny or two, owners are slow to raise prices to cover their increased costs--and at times even lose money when a customer charges a fill-up. "We get hurt when the price goes up--the opposite of what the customer thinks," says Stewart Spinks, who runs 38 Spinx stores in the Carolinas and Georgia. With gas at $3 per gal., Spinks hands credit-card companies about 7-c- per gal.--half of what he makes before paying employees and spending on equipment. So he has joined station owners in Tennessee, Minnesota, New York and elsewhere in trying to avoid credit fees altogether by enticing people to pay with cash. The break is normally 3-c- or 4-c- per gal.--enough, they hope, to get customers to whip out the greenbacks.