New Gasoline Pricing Scam – Let the Buyer Beware!

May 11, 2009

In a new attempt to mislead consumers, gas stations everywhere are resorting to a new technique – advertise one price and charge another. As you are driving down the street looking for a fill up, you see the following sign advertising gas at a very reasonable rate:

You pull in, insert your VISA card, and fill up with high test at what you think is $2.29 per gallon. If you bother to look carefully at the price on the pump or at your bill, however, you see that you’re really being charged $2.34 per gallon. In a typical 18 gallon tank, that’s almost a dollar more than you thought you were going to pay! What gives?

Well, take a very close look at that sign advertising $2.29 per gallon:

Stuck off to the side is a very small sign reading: “Cash or Citgo Credit Card.” What does that mean? If you pay cash or use the company’s proprietary credit card, only then are you getting the lower price. Otherwise, you’re paying the unadvertised price of $2.34 per gallon. Doesn’t it make more sense to say that the regular price is $2.34, but that if you pay in cash or use their special credit card you get a 5 cent discount?

Most states have laws regulating the display of gasoline prices at gas stations. In Florida, any price disparity based on mode of payment must be disclosed in a “clear and conspicuous manner.” According to the Florida Department of Agriculture and Consumer Services, “tier pricing” (basing prices on mode of payment) started in Florida about six months ago and is now catching on across the state.

Is the tiny sign stuck to the side of the large pricing panel “clear and conspicuous?” Is it “clear” that using a normal credit card will cost you another dollar? Is this fact advertised “conspicuously?” What do you think?

And if you’re the competitor across the street advertising $2.34 per gallon, and seeing that all your potential customers are being lured by the “cheaper” gas of your competition, what are you going to do? No wonder this deceptive practice is catching on in Florida and elsewhere.

We think that tier pricing should at least be accompanied by a sign as large as the advertised price stating that this price is only good for cash payments or specific credit cards.