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Rising Gas Prices Hurting Gas Station Profits

June 9th, 2008 by Mike Vasilinda

Were all paying record prices for gas, but if you think the guy behind the register is cleaning up, think again. As Mike Vasilinda tells us, the high prices are actually cutting into most gas stations profit margin.

Hear it Here: As Gas Prices, Credit Card Fees Rise, Gas Station Profits Suffer

Credit card fees are based on price, not gallons. So when the price of gas goes up, so do the processing fees. Station owner Charlie Rooney says the fees make it hard to turn a profit.

Ironically, the higher the price of gas goes, the more people turn to the credit card, which in turn makes higher fees, Rooney said.

The fee on this card is two percent. The fee on this one, as high as three. Which explains why not everyone takes every card.

Eight of every ten gas purchases are made with a credit card. So as the price climbs, more stations are beginning to offer a discount of a nickel or more per gallon if you pay cash. Motorists filling up liked the idea.

Id like to save as much as I can. Its really expensive, state employee Erika Norwood said.

That would be a good thing. I just put in 50 dollars. Thats 12 gallons, taxi driver William Wheat said.

Jim Smith of the petroleum Marketers Association says more stations will soon be offering cash discounts.

The average retailer is around 9.8 cents gross profit per gallon, Smith said And if theyre giving 8 cents to the credit card company, thats 1.8 cents a gallon gross profit, which theyre trying to make their living with and that doesnt work.

Some of major gas chains frown on cash discounts, but for some stations and motorists, they may be the only means of survival.

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