.

Smithtown Mobil Tacks on Nearly $1 to Credit Prices

Tell us, would you use a station charging a $1 difference between its cash and credit prices, or is this price gouging?

If plastic is your preferred method of payment for gas, then be prepared to cough up almost $1 more per gallon at a local Smithtown Mobil station.

Readers alerted Patch that Mobil gas station on Jericho Turnpike in Smithtown, off Old Willets Path, is charging customers paying with cash $3.88 per gallon for regular gasoline. The gas station's price increases to $4.78 per gallon for credit, a nearly $1 difference. 

Customers looking for full-service at this station face an even steeper price. Customers here will pay almost $1 more, $4.79 per gallon of regular, to have it pumped for them and $5.69 per gallon to drivers paying for full service with plastic. 

An employee of the Mobil gas station said the nearly $1 price difference between cash and credit was not a mistake, but an intentional decision by the station's management. He could not explain the reason for the surcharge, and managers were unavailable Friday morning. 

A spokeswoman for Long Island Gas Retailers Association said gas station owners have the right to set a different price for customers paying with debit/credit, instead of cash. 

A Wave gas station at 278 West Main Street, Smithtown, roughly 1.8 miles from the Mobile gas station, has a price of $4.03 per gallon cash and $4.13 per gallon paid by credit. Wave is a full-service gas station with no extra service charge. 

Similarly,   charges $3.96 per gallon of regular for customers paying cash and $4.06 per gallon credit. According to a handwritten sign at the pump, that price also includes a free coffee.

Tell us, would you use a station charging a $1 difference between its cash and credit prices, or is this price gouging?

DFUSCO March 12, 2012 at 06:34 PM
The guys #'s were just examples - plug in 3.25% as the profit and thats your scenario. You as the dealer are making a pittance, but the main office, Gulf, Exxon, SUN, etc are making multi billions in net, net profits. You should be complaining to them to lower your wholesale price or using your gas lobby to re negotiate your credit card fees with Visa. Otherwise don't accept Visa at your station and see how that change affects your business. Imagine a retail shopping scenario where Shop Rite had a cash credit price for everything on their shelves. We are not mad at YOU the little guy at the retail end - we are mad as hell at BIG OIL CO's who manipulate the prices keeping them artificially inflated and driving the economy iny recession #2.
DFUSCO March 12, 2012 at 06:49 PM
I have often wondered how a government can regulate the price of milk, a drink of choice, but not regulate the price of gas - a necessary commodity. I am not a fan of government involvement in anything, but I think this might be an area where it may be needed to stop the manipulation of the pricing. If you were regulated to only a certain % of profit, you would want to sell more volume and not shutter refineries to control product on the market to drive up prices amongst other scams currently going on.
We Heart Long Island March 12, 2012 at 07:02 PM
My point was to build in the CC fees into your price and have just one price. Of course your final price needs to be competitive. The problem is your margins are too low. Who is getting the rest of the $4? That's what needs to be fixed. Then you wouldn't need double signs.
Dan O March 12, 2012 at 07:16 PM
There are no simple answers at this point. It is a very complicated issue. And it gets even more complicated at the street level. A company like Hess doesn't have any locations that are independant dealers like myself. They are for the most part, all company operations. Hess explores, refines, distributes, and finally retails their own oil. There are no middle men making money. Where as a company like Gulf (who now owns all northeast Mobil locations) is nothing more than a distributor. So at the street level you have gas stations that are owned directly by Big Oil companies like Hess. Then you have stations that are owned by Distributors (which can also be Gulf) Then you have stations who are owned by dealers who either own the property or lease from a distributor. The bottom line is what is happening at the above listed locations of Mobils and Gulf's is unethical. This is being carried out by a single yet powerful dealer. He owns roughly 28 locations on the island. I would never be in business to mislead or deceive any customer. Any businessman who would do so, is someone whom I would never give my business to. I am in this to make a living and to provide the best experiences for my customers. Hopefully I was able to shed a little more light on this subject, and I look forward to and encourage more comments and questions on this matter.
Irondog March 12, 2012 at 08:26 PM
I am thinking the real question here is what can the consumers do? It never seems like there are many options other than just suck it up, which sucks. And definitely not patronize any gasoline retailers that are clearly taking advantage. I know it's a tough business. When I looked into this business a few years back, my accountant (who by the way is my old boss, so I know I was getting the right feedback) told me between all the paper work, reporting requirements, environmental requirements, etc., it is difficult to turn a decent profit ethically and being able to sleep at night.
Alex March 12, 2012 at 11:59 PM
Hess in south Medford charges extra for credit.
John Gruber March 13, 2012 at 12:25 PM
merging the 2 prices doesn't make sense, why should someone who pays cash have to pay more? 2 options=choices. if a fast food place is charging extra for dipping sauce, they wouldn't charge people who don't order it more to cover the costs, they charge the people who buy it. you want it, you pay for it or go somewhere else.
We Heart Long Island March 13, 2012 at 12:33 PM
That is how all retail works. CC cost are built into the stores margins. If you pay cash at Walmart, McDonalds, Macy's etc. They make more money off the transaction. You are not paying extra using cash but they are making a higher profit.
DFUSCO March 13, 2012 at 01:14 PM
DAN O- Is your station in Commack or close by? If you have same price cash/credit I would support you with my business as I assume many others in this town would
John Gruber March 13, 2012 at 01:23 PM
Some stores eat the cost, others make you pay it while some require a minimum charge so there is variation among industries and it depends on the store, big companies like walmart and macy's obviously don't let these fees affect them too much (otherwise prices would be much higher) but individual small owned companies might not be able to eat these fees, hence the disparity in prices. most people are just lazy and don't want to go to the bank.
We Heart Long Island March 13, 2012 at 01:25 PM
All cost of doing business is paid for by the customer.
DFUSCO March 13, 2012 at 02:42 PM
When I was a kid, people would say that some day there would be no such thing as cash which I couldnt fathom. Well today with all the different credit cards, debit cards, electronic transfer, direct deposit, etc those people were pretty much right. There is no reason to go to the bank for cash, its not a matter of being lazy. Every store takes cards, maybe its time they all renegotiate their processing fees - shouldn't it be minimal as they are just moving money from A to B?
Dan O March 13, 2012 at 04:27 PM
DFUSCO, Of my three locations, there is only one left that is still same price cash credit. The other two offer Debit at the same discount as Cash. We also offer Gulf Cards, and Gulf Mastercards that all offer the discounted cash price and percentages back on purchases. The location that is still same price cash or credit is in Holtsville on the LIE service rd and North Ocean Ave, so it is rather far from you guys over in Commack. The reason that location is still the same price cash or credit is because it is a much higher volume location. I am able to work on lower margins because of this. However, as much as I hate to say it... I think the days are numbered of the same price cash or credit there as well. This problem really escalates as the price of gas goes so high. And I would also assume that processing fees would be minimal, or at least they should be. However, they are not. If I told you how much money I send out a month in credit card processing you would be blown away! And these fees become so crucial in the sale of a product that has no margin to begin with. I talk with other business owners all the time. Businesses that make 30/40/50% margins on their products, and even they are having a hard time with it. Even today, I called to order a part for a motorcycle and the guy doesn't accept Amex. Why? Because the fees they incur are insane... the same ones I incur when I do business.
Irondog March 13, 2012 at 05:03 PM
OK. So I need to chime in on this thread again. I am upstate NY just about every weekend from Albany to Utica and North to Watertown. How is it that no single gas station I go to "discounts" the cash price for gas. It is same price always, cash or credit. And they have much less volumes, especially in smaller towns. Even in Canada, there is no "discount" for cash. This "discount" for cash logic sounds a bit fishy.
We Heart Long Island March 13, 2012 at 05:14 PM
If I have a 30% margin business and have to kick 3% to the credit card companies, how can I have a hard time? If the "sale of your product has no margin" CC fees should be the least of your worries.
DFUSCO March 13, 2012 at 06:10 PM
I've been saying that same thing for a while not only upstate but all the surrounding states around here( Mass, NH, NJ, Conn) have the same prices cash or credit. Another guy answered it was the cheaper rents off LI, but then why aren't hamburgers at burger king, big gulps, pizza pies,etc. much cheaper?
DFUSCO March 13, 2012 at 06:11 PM
I dont think I have ever seen a car in that station let alone getting gas, always wondered how it stays open
Mary March 13, 2012 at 06:14 PM
This gas station is awful... I NEVER go here because of the sickeningly high prices compared to other stations in the area. It baffles me when I see customers pulling in, knowing that there are at least three other stations within a mile. Why on earth would anybody so willingly overpay for already high-priced gas??
Irondog March 13, 2012 at 08:47 PM
I will be going past this Mobil tonight on my way out. Maybe I will stop in and fill my 32 gallon tank and pay with a credit card. Yeah right. That thief will never see my hard earned money.
Irondog March 13, 2012 at 08:53 PM
Here's an idea. Let's get a consortium of local residents to lease that old gas station on the corner of Harned and Jericho. Put one new regular gas tank only in there with one pump, pay for the tank to be filled out of our own pockets at hopefully a wholesale price and only use it for the members of the consortium. No employees to pay, we pump our own gas when needed. The only problem is that the additional overhead and other incidental costs would kill us. Too bad there wasn't a way to do this. The real answer is convert our vehicles to run on both gasoline and natural gas and tap off our natural gas lines at home.
Irondog March 13, 2012 at 08:57 PM
We really need to get smarter about this. There are too many forces against us unfortunately from the Arabs wanting to ruin the Western economic environment through manipulating the supply and price of oil to the greedy American oil companies who's main goal is to keep the shareholders happy by maximizing shareholder wealth through us, the consumers, and the credit card companies fall into this category as well through their extortion-like fees.
Ray March 14, 2012 at 11:31 AM
What really kills me is that you always find people filling up at these outrageous gas stations. The Gulf on 454 and Old Motor Pkwy has crazy cash spikes to begin with and someone is always giving them business. I use Hess along 347 and Jericho Tpke. They have always been fair. Same price for cash or credit
Dan O March 14, 2012 at 02:04 PM
Ray, that station is also operated by the same owner. DFUSCO, I see many locations out of state that are seperate cash/credit pricing as well. The rents are much higher on LI, as well as the taxes... and just about everything else. Not to mention this is one of the most competitvely dense areas in the country in terms of the number of stations per square mile. And you commented about the cost of goods, and why aren't they cheaper out of state? Well, they are. You just don't notice. Probably because gas is a product people hate to have to buy. We all have no choice, every single week but to buy gas over and over again. So if you pay ten cents more for a soda, no one thinks twice about it... but ten cents on a gallon of gas, now that is a different story. As most of you are aware, the topic on hand has made the front cover of Newsday. Thank you again for the good discussion regarding these issues, everyone's opinions here are extremely valuable to me.
Jimmy Bones March 14, 2012 at 03:20 PM
If Hess can continue to have same price Cash\Credit I think they will be only one standing tall in the end.
Dan O March 14, 2012 at 07:41 PM
I have heard Hess will be testing split pricing at sample locations.
Irondog March 14, 2012 at 08:13 PM
If Hess starts charging more for credit, then I go with a handful of change and singles when I fill my 32 gallon tank. Yeehah!!
Jimmy Bones March 14, 2012 at 11:12 PM
My bet is they stay same price. Hess at kings park rd always busy when I drive by. I use Hess at Home Depot. Attendant says they are doing well.
JonCBooBoo March 15, 2012 at 11:08 PM
Hess in South Medford does NOT charge extra for credit. It's the Hess in Patchogue (South of Sunrise ) that DOES charge extra for credit and it's more expensive. I know, as I'm a local and I've been using the South Medford Hess as my regular station for years. It's only a few pennies more then the local Turkish run discount stations.
Gas station owners in most cases are just trying to cover there cost tp process credit cards. On average it should never cost more then 2 to 3% more for them especially when the prices are on the rise. In most cases there max rate is 1.90% or the better of max rate of .95 cents. ($40x1.90%=$0.76) thats what they will pay to process the card you gave them. Much less if a debit card. When gas prices are on the rise I guess some places like the stations mentioned are taking advantage. $60 x 1.90%=$1.14 but there max rate cost to them is .95 cents.There protecting themselves by saying they are charging for the full service which to me is not right. If they are charging $1.00 per gallon, they are making about $14.00 more based on an average 15 gallon fill up.As the summer comes its time to keep our radars on for this. Make it a rule to never pay more then 11 cents above.
Alex April 24, 2012 at 07:42 PM
Sorry, I meant Patchogue. You are absolutely right.

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