Rhode Island news
Lynch says cash, credit prices allowed for gasoline
01:00 AM EDT on Tuesday, July 15, 2008
State law allows gas station owners in Rhode Island to sell gasoline at a lower price to customers who pay with cash instead of a credit card, as long as the retailer “clearly and conspicuously” displays both the cash and credit prices.
That is a legal opinion issued yesterday by Attorney General Patrick C. Lynch, who was asked by the state’s Department of Business Regulation to clarify whether state law allows dealers to charge two different prices for gasoline for different payment types.
Michael Marques, director of the DBR, said his agency had received complaints from some consumers who believed they were misled into buying gasoline at stations that displayed one price, but charged a higher one at the pump for using a credit card.
State law does not specifically prohibit nor allow a station to charge different prices for cash or credit, Marques said. So in May, he asked the attorney general to clarify the state law that governs gasoline sales.
In a three-page letter, Lynch said his office reviewed the two relevant statutes.
“These statues allow a retailer to sell gasoline for prices the retailer sets, as long as those prices are properly displayed,” Lynch wrote.
“It is clear that any gasoline station that charges a different cash and credit price must clearly and conspicuously disclose both of those prices to consumers in a manner that gives fair and actual notice of the differences before the consumer incurs any expense,” Lynch wrote.
Credit card fees have become increasingly burdensome for gasoline retailers as the price of fuel has risen to record highs.
Most credit card companies charge gas stations a fee of 2.5 percent to 3 percent of the sale, according to the National Association of Convenience Stores, the trade group for the stores that run more than 80 percent of the country’s gas stations.
At yesterday’s average price of $4.11 a gallon, that 2.5-percent fee amounted to about 10.3 cents for each gallon sold. Last year, when the average price was about $2.98 a gallon, a 2.5-percent fee cost the gas station owner about 7.5 cents per gallon.
Marques, the DBR director, said that debit cards are usually categorized as being another form of cash. But since the state law regarding gasoline sales doesn’t say anything about debit cards, he said it is unclear whether gas station retailers will consider them as cash or credit. Unlike credit cards, a retailer pays a flat transaction fee for each purchase, regardless of the purchase amount.
He said that motorists may now see four different prices displayed at gas stations, one for each of the combinations of self-serve or full-serve and cash or credit.
“It’s going to get more difficult for consumers,” he said. “They’re going to have to pay more attention.”
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