Gas Station Owner Blasts Competitor Charging Extra $1 Credit Price

Local Gulf franchise owner says huge price gap seen at other Gulf stations may make people associate the high prices with his station's brand.

While local gas stations charging a $1 difference between cash and credit prices have ignited residents, a nearby station owner is saying his competitor's practice is going to hurt his business.

Several stations on Long Island owned by a single franchiser are , and a few of those happen to be Gulf stations. But Dan Ornstein, who owns three Gulf gas stations on Long Island, including one in the Hauppauge area, said is is worried people who see those high prices and associate them with all Gulf stations. For the record, on Wednesday gas at Ornstien's stations cost $4.05 per gallon in cash or $4.15 per gallon for customers paying with plastic, the standard price difference.

"It definitely impacts how we do business. Customers who go into a station like that and see a $1 discrepancy leave with a bad taste in their mouth," he said. "They don't see it's owned by a single dealer. To them, it's a brand name like Gulf or Mobil."

Ornstein fears he will lose customers to Hess, a brand that often charges one price whether cash or credit.

Michael Watt, executive director of Long Island Gas Retailers Association, called the $1 price difference between cash and credit “very peculiar and counter-productive.” Yet, it’s not illegal, he said.

“It’s illegal to charge for the use of a credit card, but it's perfectly legal to offer a cash discount,” Watt said.

Multiple attempts by Patch to speak with the owner or managers of the stations with the $1 price difference were not answered.

Both Watt and Ornstein said the practice of charging two different prices for a gallon of gas, based on whether payment’s in cash or credit, is due to slim profit margin in selling gasoline. Street competition drives station owners to a low markup, while credit card companies charge up to 3 percent per gallon on each transaction, according to Watt.

For example, Watt said if gas is priced at $4 per gallon, a station owner may be making 20 cents profit per gallon. But If the customer used a credit card, 12 cents would go to the credit card company.

“It’s really the credit card companies who are fleecing these gas station owners,” Watt said, who claimed station owners are the ones hurting as prices increase.

The matter gets more complicated for drivers who choose to pay using their debit cards. Traditionally, debit card transactions are given the cash price out of courtesy, but that may vary by station, Ornstein said.

“Whether or not the dealer chooses to have debit come out as a cash price or credit price is ultimately up to the dealer,” he said.

The only way to know for customers to be sure is to walk inside the station and ask a manager.

Watts admitted he was recently misled when he attempted to fill his car’s tank at a Mobil gas station on Sunrise Highway. Recognizing there was a fee for paying with credit, he attempted to pay using his Mobil credit card – since gas station cards are traditionally exempt from the credit mark-up at the company’s stations. Watt was still charged 10 cents extra per gallon.

State Sen. Lee Zeldin, R-Shirley, announced Wednesday that he would be seeking new gas legislation to protect consumers at the pumps.

“I am concerned that some gas stations on Long Island are getting away with charging consumers as much as $1 per gallon more for credit card than with cash. Moreover, the deceptive advertising that is happening is outrageous and has to stop,” Zeldin said in written statement.

His proposal would require gas stations charging more than a 10 cent difference between cash and credit prices to display both sets of prices on their street level displays. The senator plans to bring it before committee next month.

Until then, Watt recommended drivers gas up at stations where they know the business owner or trust the station’s business practices.

We Heart Long Island March 16, 2012 at 01:48 PM
Oh, I didn't known that. Thanks.
DFUSCO March 16, 2012 at 01:58 PM
I . hate. you - But you haven't explained why if all you have explained is so ,how does big oil announce new record high multi billion dollar quarterly profits when the prices of oil skyrocket-is that just them being victims of circumstance? I hate to say this, but this is one area where govnmt must be involved for regulation
Chances.are.i.hate.you March 16, 2012 at 01:59 PM
You're welcome
John from Kings Park March 16, 2012 at 02:24 PM
Yep, that's right. Run along, little man...
Chances.are.i.hate.you March 16, 2012 at 02:29 PM
Fusco, With the gas and oil prices going higher, the oil and gas companies do report record profit because the price of what they sell has increased. It's like if I was in the business of selling rocks. When i first started selling rocks they cost $1 per pound, then the next quarter those same rocks are determined by the market to be valued at $4 a pound. My cost associated to gather those rocks most likely increased, as well as my processing and maintenance cost but my "profit" looks much larger. However, that is a very macro view of my business. I'm not one for regulation of industry but the cost associated with carbon based fuels must be dealt with. As stated earlier alternative energy sources should be pursued further. And John, I don't think offering a knowledgeable opinion on something is considered trolling. However, if you choose to view it like that, feel free to continue being a part of the problem.
John from Kings Park March 16, 2012 at 02:38 PM
I'm not going to get into this with you. I'm simply going to state that you can express your opinions till the cows come home but there's no reason to be complacent & talk down to people every time one of their opinions don't match yours. I'm just letting you know from experience, the editors in here have a zero tolerance policy on that sort of thing & it furthermore makes everything you have to say irrelevant. Nobody's listening to you when you speak like that, nobody's taking you seriously, they're only looking at your ugliness...
Chances.are.i.hate.you March 16, 2012 at 02:38 PM
My comments were deleted. Haha! Who was the big man that shed some tears to the board moderator? He's being mean to me! Boohoo.
John from Kings Park March 16, 2012 at 02:40 PM
Nobody had to cry anything to anybody, the editors keep a very tight leash in here... Don't say I didn't warn you, dude.
Chances.are.i.hate.you March 16, 2012 at 02:48 PM
We heart long island, this will be the last time i respond to you. You are bringing zero to this conversation. You are a part of the problem. John, I'm just trying to bring what i know about the topic to everyone here. When I see people that are talking about things in which they have little to no understanding of but, they are trying to convince people they know what they are talking about, its frustrating. The biggest enemy in situations like this is lack of understanding. Giving people wrong information is the issue. So, when I read people saying "its the president's fault" or "this is how they do it at Macy's" it's annoying. It's not that i disagree with their opinions, i get annoyed with their lack of understanding. Specially when they try and convince other people that what they are saying is factual. When in reality, that couldn't be further from the truth.
We Heart Long Island March 16, 2012 at 02:55 PM
I'm not in the oil industry. How could I be part of the problem? What part of my Macy's analogy is incorrect? Do they have two prices for cash and credit? No. Do they build their credit processing fees into their cost of goods? Yes. Do they make more money from their cash paying customer? Yes. Those are retailing facts.
Chances.are.i.hate.you March 16, 2012 at 02:58 PM
I know you aren't a part of the oil industry. What industry are you a part of?
Henry Powderly (Editor) March 16, 2012 at 02:58 PM
All comments that include personal attacks will be deleted. We'd love to allow for the debate, but our terms are clear when it comes to these attacks.
Chances.are.i.hate.you March 16, 2012 at 03:00 PM
Henry, sorry. I didn't take the time to read the bylaws of the site. If we are throwing stones though, why are the comments that address me as a troll still here?
LCDR March 16, 2012 at 03:07 PM
Look for HESS Gas Stations. They are all "cash or credit same price". And, their prices are as good or better than their competition.
DFUSCO March 16, 2012 at 03:10 PM
I don't Know- maybe your right and I am Dumb but your rock scenario makes no sense. If your rocks sold for $1and your profit was fifty cents and now the arabs are fighting and speculators are driving up the price of rocks because they know everyone needs those rocks and have no choice to buy those rocks- your price to buy those rocks is now $3.50, you maintain your $0.50 profit and sell for $4. you can't have it both ways and say it costs oil co.s more money to buy the oil at the exchange (first post), but then also say the "profit looks larger" (we are talking about net,net,net profits) is made at the the wholesale level.
Chances.are.i.hate.you March 16, 2012 at 04:56 PM
Fusco, Overall costs of goods sold increases dramatically. Those are what the headlines read, "record profits". That doesn't mean its actually the case. What you said is 100% correct, my profits do not actually change. But, some times the reports show that "XOM makes record profit of $4 billion." Chances are very high that those results are pre-expense and published with an agenda. That agenda is mainly to put the blame on the oil companies, when realistically, the oil companies have little to nothing to do with what the price of their raw and/or end product is.
Chances.are.i.hate.you March 16, 2012 at 04:59 PM
Henry, sorry. See below. Aren't i being attacked by being called a troll? I mean, my feelings are very hurt.
We Heart Long Island March 16, 2012 at 05:07 PM
I think your dictionary is broken. Here use mine. prof·it/ˈpräfit/ Noun: A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something.
jozee March 16, 2012 at 05:18 PM
as i visit new jersey, i noticed they only charge around 6cents a gallon more for credit that i can live with not a dollar!!!!
DFUSCO March 16, 2012 at 07:18 PM
All the reports I read indicate "Net Profit" which means to me at least after ALL expenses. So XOM sets up a drilling rig, pumps the oil out of the ground, ships it to their refinery, ships their refined product to their dealers, but has nothing to do with the price of the raw or end product is? Listen - if I raise chickens from hatch and sell them in my little store for $.50 a pound and am making a nice profit at that ,and the arabs start fighting and speculators drive up the price of chicken to $5.00 lb, everything for me above $.50 is pure profit - so XOM makes millions per boatload on the trip from the well to the refinery as the speculators drive up the cost. So if the government says show me your cost to pump it, ship it and refine it and then allows a 2% profit - the profits would still be in the billions just not the hundreds of billions
chefcristo March 16, 2012 at 10:43 PM
chefcristo March 16, 2012 at 11:25 PM
i truly feel sorry for you, chances.are.i.hate.you. i really hope you don't live up to your patch name in real life. all the best and good tidings to you.
keith dratch March 17, 2012 at 12:59 AM
10 cents a gal is just about what the credit card co charges the gasoline retailer for a gal of gas. I would love to be making 20 cents a gal, but as the price rises, our profit margin shrinks in order to remain competitive. I think that I can speak for many service station owners, and say that there is big money being made on gas. But not by us
keith dratch March 17, 2012 at 01:16 AM
And yes, $1 more for credit is crazy!! You can bet that the person that made that decision was not a local buisness person with any connection to his/her community. They should be ashamed. Support your local station. We have no control over these price spikes, and we are only passing along these increases.
chefcristo March 17, 2012 at 10:16 AM
he's part of the put-your-neighbor down industry. seek another job, chances.are.i.hate.you.
chefcristo March 17, 2012 at 10:20 AM
any government that allows the entire oil industry to rule with such economically ruinous force should be ashamed.
Jimmy Bones March 17, 2012 at 02:32 PM
Hess is killing the competition. Thats how all this started. There stations always have cars gasing up while other stations look empty.
chefcristo March 17, 2012 at 08:04 PM
THAT makes sense, doesn't it JIMMY BONES? hess should have crowds and the others should look empty until they change their cash/credit pricing policy. even the personnel at the pumps and in the convenience store people are really nice.
Frank P. March 19, 2012 at 02:28 AM
I did exactly that this past Friday at Big gulf on 111 and 495. Purchased a whopping $0.10 worth of gas on credit!!


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