September 28, 2012
GAS STATION CASH DISCOUNTS IN NEIGHBORING STATES
By: Duke Chen, Legislative Analyst II
You asked if certain states neighboring Connecticut, specifically Massachusetts, New York, and Pennsylvania, also allow cash discounts for gas purchases.
Connecticut and all of these neighboring states allow gas stations to offer discounts to consumers who pay cash for gas purchases (cash discounts). The authority for the cash discounts vary. Connecticut and Massachusetts permit cash discounts by statute, while New York and Pennsylvania allow the practice by executive agency rulings.
Gas stations offer cash discounts to consumers in an attempt to avoid credit or debit card fees. Credit card companies, such as American Express, MasterCard, and Visa, charge stations as much as 3% of the transaction. According to the Oil Price Information Service, credit card companies make between 10 and 12 cents on a $3.50 gallon of gas (http://www.ajc.com/news/business/some-gas-stations-give-cash-discounts/nQNMJ/).
Connecticut law allows any seller, including gas stations, to offer a discount to induce consumers to pay by cash, debit card, check, or other means rather than credit card (CGS § 42-133ff(c)). The law bans any contract or agreement that would prohibit offering cash discounts.
Connecticut regulations require gas stations to post clear and conspicuous signs with both the credit card and cash prices. Among other things, these signs must (1) be clearly visible, (2) have letters that contrast in color to the background, and (3) be large enough to direct consumers to the appropriate dispenser (Conn. Agencies Reg. § 16a-15a-2).
Massachusetts law allows any seller, including gas stations, to discount their price for consumers paying with cash (Mass. Gen. Laws ch. 140D, § 28A). The law bans credit card companies from prohibiting sellers from offering a discount to induce a cash payment.
If a gas station offers cash discounts, it must clearly and conspicuously post both the credit card and cash prices (http://www.mass.gov/ocabr/docs/dos/202cmr2-00final-clean.pdf).
According to the New York State Bureau of Weights and Measures, gas stations may give cash discounts if certain conditions are met. This includes making sure the (1) consumer is able to select “cash” or “credit” by using the dispenser controls, (2) dispenser window displays the correct price when the consumer selects “cash” or “credit,” and (3) “pump-topper signs” display both cash and credit prices.
The bureau states that the signs by the road do not have to show both credit and cash prices, but whichever price is advertised should be clearly and correctly labeled in letters large enough to be read from the road.
According to the Pennsylvania Department of Agriculture, Bureau of Ride & Measurement Standards, cash discounts for gas stations are allowed if certain conditions are met. The bureau's 2009 enforcement guidance requires, among other things, the gas station to post the higher credit card price on its street signs, but allows posting the lower cash price. It also requires the printed receipt to have the date, product, total units pumped, correct price per unit, and total price.