At the pump, a dash for cash

As credit card fees pinch profits, stations make it pay to use greenbacks

Dan Campbell IV pumps gas at Bursaw Gas & Oil in Acton, which offers a discount for cash. (Joanne Rathe/Globe Staff)

ACTON - When filling up at Bursaw Gas & Oil, it pays to leave your charge card in your wallet.

Here, where the line of waiting cars routinely stretches across the lot and to the street, most motorists know that paying with cash saves a dime a gallon.

Such savings are being offered by more and more area gas stations as a way to offer customers a break while also trying to combat the heftier credit card fees merchants must pay as the price of gas rises. To do so, many gas stations are walking a fine line between what constitutes an allowable "discount" versus a prohibited "surcharge" that penalizes customers who prefer using a credit card.

In Acton, Jeff Bursaw started advertising his station's discount - initially a 5-cent savings - two years ago, when he saw gas prices first starting to climb.

"It's nothing against the banks, but we're the ones out there pumping gas," said Bursaw, whose family has run the Acton station since 1915.

On Monday, when the Energy Information Administration logged New England's average retail gas price at $4.13 a gallon, Bursaw was offering gas to cash-paying customers for $3.96. The same "special price" was on display at a Mobil down the street from Bursaw's. A 7-cent discount could be found at Teele Square Auto in Somerville, and cash-paying customers at Hingham Harbor Sunoco on Route 3A saved 2 cents.

"When you buy one gallon of gasoline that's over $4 a gallon, it costs us 10 cents on the credit card," explained Scott Dummer, the general manager at the Hingham station. And that dime is enough to make or break many gas merchants, said Paul O'Connell, executive director of the New England Service Station and Auto Repair Association.

"A lot of people don't understand that if the gas station is making 10 cents a gallon and gas is $4 a gallon, the credit card fees could be 8 to 10 cents a gallon," O'Connell said. Charge card fees are based on a percentage of the sale; most fuel merchants say they are paying about 2.5 percent.

"The credit card companies are making more per gallon of gas than the gas station owners," O'Connell said.

So, more merchants are turning to the cash discount - a practice that had fallen by the wayside after the fuel crisis of the 1970s, said Charles Carroll, deputy director of the state Division of Standards.

"We're seeing it out there," said Carroll, whose office investigates fuel-related complaints. In order to offer a lower cash price, certain rules must be followed, he added.

First - in a rule that Carroll said "positively is semantics" - gas merchants must categorize their cash prices as a "discount" for paying with cash rather than as a penalty or surcharge for paying with a credit card. Carroll said gas merchants also must clearly post the cash and credit prices for gas atop all pumps.

Tristan Jordan, vice president of communications for MasterCard, said his company doesn't have a problem with such discounts as long as card-using customers are notified of the difference in price before they get to the cash register.

"You wouldn't want a situation where someone went up to pay and all of a sudden they were charged a different price because they used a card," Jordan said. "That wouldn't be fair to the consumer."

Customers filling up at Bursaw's Gas & Oil were well aware of the cash discount - it's posted on the station's main road sign. Cash and credit prices are also posted atop each of the station's four gas pumps.

"I always pay cash because it's the best price in town," said Acton resident Chris Johnson, who was filling up his 2006 Chevy Silverado on Monday.

Meanwhile, Scott Boyd handed over a Visa card to fuel his vehicle.

"No cash. Who wants to pay $78.50 with cash?" asked Boyd. "So, credit card. Sign of the times."

Bev Wall of Natick was of the same mind as she gassed up her BMW X3 with a credit card.

"Well, I get miles, so I can fly wherever I want and since gas is so much money anyway, I might as well pay for the gas and get the miles," Wall explained.

Erin Ailworth can be reached at eailworth@globe.com.