Gas stations can set cash price lower than credit card price

Some gas stations offer discounts to customers who use cash instead of credit to fill up because credit cards come with merchant processing fees.

You’ve probably seen a gas station list two prices for their fuel: one for cash and one for credit. The cash price is always lower than the credit price.

Yzael texted VERIFY to ask if this practice is actually legal.

“Is it allowed?” asked Yzael. “If not, how do we report this? If yes, why is it allowed?”


Can a gas station charge different prices for different payment methods?



This is true.

Yes, petrol stations can charge different prices for different payment methods.


Gas stations may charge different prices for cash and credit to cover credit card processing fees. Gas stations are subject to the same rules as other merchants, such as restaurants.

RELATED: Yes, a restaurant can charge different rates for credit cards and cash

Credit card processing fees at gas stations average about 2.5% of the total transaction price, according to the Association for Convenience and Petroleum Retailing (NACS). As of June 9, 2022, the national average for a gallon of gas is $4.97, according to the AAA, which would increase the handling fee to around $0.12 to $0.13 per gallon.

The National Merchant Association says there are two ways for a retailer, like a gas station, to charge different prices depending on the payment method: charge a fee for credit card purchases or give cash purchases a discount.

There are 10 states that have laws against credit card surcharges — the fee a retailer adds to a credit card purchase to cover the processing fee — says the National Conference of State Legislatures. But each state allows discounts protected by the US code so retailers can encourage customers to use payment methods that are cheaper to process.

NACS says consumers are far more likely to see rebates at the pump because fierce competition over gas prices makes gas traders shy away from surcharges. NACS has repeatedly surveyed customers about their price sensitivity at the pump and found that nearly half of all consumers would change their behavior to save 5 cents a gallon.

“NACS is not aware of any retailer implementing a surcharge program,” NACS said in a Q&A on credit card surcharges. “It’s important to note that discounts for cash or debit card payments are common, but these are discounts, not surcharges.”

Although most states have laws that require gas stations to clearly disclose both their cash and credit prices, the exact rules for how gas stations handle cash discount payments vary from state to state.

A Connecticut research report on gas station discount rules in Connecticut, Massachusetts, New York and Pennsylvania found that the four states had three different rules for signage.

In both Connecticut and Massachusetts, gas stations are required to “post clear and conspicuous signs with both credit card and cash prices.” In New York, street signs “are not required to display both credit and cash rates, but whatever rate is advertised should be clearly and correctly marked in letters large enough to be read from the street.” In Pennsylvania, must Gas stations “post the higher credit card rate on their street signs,” but they are still allowed to post the lower cash rate next to the credit card rate.

The Consumer Financial Protection Bureau says a discount can be given in whatever amount the seller wants, either as a percentage of the regular price or as a dollar amount. This means that any regulations governing the amount of a gas station’s cash discount are made at the state or local level. Typically, the price difference is between five and ten cents.

“Amounts for the rebate vary, but most retailers offer about five cents rebate per gallon to customers who pay cash,” NACS said on May 19, 2022. “Some retailers offer significantly larger rebates for cash, particularly when it comes to gas purchases.” another purchase is tied, such as a car wash.”

More from VERIFY: Yes, eligible Americans must apply to a federal program to receive discounted Internet service

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