Jul. 19--Pumping gas awhile back, one man standing next to me asked: "Do you get the cash price if you use a debit card?"
At first, I thought he sounded a little silly. Cash is cash. And a debit card, well, it is plastic.
But if you think about it, a debit card is simply electronic access to the money in your checking account. So, why not?
Pulling up to the pump is painful in so many ways these days. We're paying more than $4 a gallon, spending $60 or more to fill up a tank and on top of that, we're stuck studying signs at the corner station as seriously as fine print to figure out how much we pay for gas if we use credit cards, debit cards or cash. The best price could be the cash-discount price.
Most gas retailers, though, aren't giving the cash discount if you use a debit card. I even tried a mini-test earlier this month and pulled out my debit card at the BP Lathrup Village at 12 Mile and Southfield roads.
I was charged $4.219 a gallon with the debit card. I would have paid the same price if I used a credit card.
Bring the Benjamins and you'd get that super-low price -- OK, low by today's standards -- of $4.099 for regular gas at the same station.
In Michigan, the average price for regular gas hit $4.189 a gallon as of Friday, according to AAA Michigan. That compares with $4.09 a gallon a month ago and $3.22 a gallon a year ago. The survey is based on credit card receipts at 2,800 stations in Michigan.
So, why shouldn't you get a break and pay the cash price for a gallon of gas -- as offered by some stations -- if you pull out a debit card instead of a credit card?
Bob Barrick, president of Barrick Enterprises Inc. in Royal Oak, said most gas retailers aren't giving cash discounts if you use a debit card because the retailers pay a fee that's associated with those debit cards, so it's not exactly just like cash. Granted, typically the fee on the debit cards for retailers does tend to be smaller than the fee on credit card transactions.
Starting Friday, Visa capped the interchange for debit transactions. The rate Visa used to charge the merchant's bank for debit transactions was 0.7% plus 17 cents. The rate will remain the same but will now be capped at 95 cents.
Jeff Lenard, vice president of communications for the National Association of Convenience Stores in Alexandria, Va., said he doesn't see the new fee structure offering much of a break, if any, in many cases for retailers.
After all, you'd have to spend roughly $115 or more to see any small savings with a cap set at 95 cents.
Barrick, whose company supplies gas to more than 200 stations in Michigan, calls the latest efforts by Visa to change the debit card rate structure -- and the credit card structure later this year -- "smoke and mirrors."
"They act like it's a big deal," Barrick said.
Randa Ghnaim, a spokeswoman for Visa in San Francisco, said Visa's changes will lower the overall interchange rate for credit and debit cards for fuel transactions. The savings could be up to 50%, depending on the type of transaction, she said.
Under the changes, Visa is also implementing real-time clearing for fuel purchases this fall so that transactions will be processed within hours, instead of at the end of the day. This could cut the hold times of a day or two days that some financial institutions place on cardholders' accounts after buying gas with a debit card.
Still, it's doubtful that consumers will see a discount for using debit cards.
In Michigan, many gas stations may be offering a big savings for using cash now, instead of debit or credit, as a way to make a point about the fees associated with debit cards and credit cards.
And that lower cash price also drives people inside the store to pay the bill -- and yes, maybe buy a cup of coffee, some pop and a newspaper.
Everyone isn't buying the cash-only bargains.
Barbara Sorrells of Oak Park paid the $4.219 a gallon earlier this month at the BP Lathrup Village. She knows the cash price is cheaper. She still used her credit card.
But she told me that she's not about to run to an ATM to get cash because she's tired of getting slapped with fees at the bank for using an ATM that's not owned by her bank.
Contact SUSAN TOMPOR at firstname.lastname@example.org.
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