Debit CardsFeel like you're getting gouged at the gas pump amid rising prices? You actually are if you're using a debit card.

Despite the passage of the Durbin Amendment to the Dodd-Frank legislation last year, gas stations have yet to pass along more than $1 billion in debit card transaction fee savings to consumers, according to a survey released Monday by the Electronic Payments Coalition.

When the Durbin Amendment was under consideration, retailers stressed the need to cap debit card transaction fees to a flat rate of approximately $0.24, rather than allow it to be based on 1.15% of the total transaction, says Trish Wexler, a spokeswoman for the coalition.

"Consumers were used in Washington to get this legislation passed," Wexler said. "There's no evidence they've passed on these savings to consumers. They haven't been able to show they are lowering prices or offering discounts to people who use debit cards."

Indeed. Ever drive into a gas station expecting to pay the low price per gallon advertised on its sign, only to find that deal is only good if you pay in cash?

Ideally, gas stations should list three separate prices per gallon based on the grade: one price for a cash payment, one for a debit transaction, and another if a credit card is used, says Wexler.

To see what the Electronic Payments Coalition thinks consumers should pay at the pump when using a debit card, see their calculator to punch in the price at your local gas station and the size of your gas tank.

Turns out the cost savings, in some cases, could be a wash if you use cash. And that may be the least painful route to take, given that using your debit card takes the money from the same account from which the cash could be pulled.

Motley Fool contributor Dawn Kawamoto does not own stock in any of the companies listed. She is, however, heavily invested in using fossil fuel to run her megamonster gas-guzzler minivan.


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Denny

November 2008 gas was $4.11 gal, once Barack was
elected it dropped to $1.89 gal. then BP had to co ver
their 20billion dollarass whopping !!

May 01 2012 at 1:28 PM Report abuse rate up rate down Reply
NYtomygirl

The Mobile gas station in my town on Long Island is charging $2 more per gallon for credit. A $3.99 advertised price is actually $5.99/gallon if you pay by credit. Absurd!!

April 19 2012 at 4:06 PM Report abuse rate up rate down Reply
1 reply to NYtomygirl's comment
robsssss

I stopped using a Mobil on Long Island that was charging $.10 per gallon more if you use a credit card, even their own Exxon/Mobil credit card, there is another Mobil station not a half-mile away that does not charge more. But I have not seen one charging $2 more per gallon - that is just insane.

April 26 2012 at 10:14 PM Report abuse rate up rate down Reply
democracks0

Obamas not worried about gas prices being high. He says he's busy running around scouting out vacations spots in Columbia for him and Michelle, on the tax payers dime.

Obamasafiasco

April 18 2012 at 6:26 PM Report abuse +3 rate up rate down Reply
1 reply to democracks0's comment
mrspelosi

I do not worry about gas prices either dear. Since I have been riding in the back of the bus the last couple of years, all I need to do is worry about bus fare. With all my insider trading and the money I make off that, bus fare is chump change darling.

April 18 2012 at 7:50 PM Report abuse +2 rate up rate down Reply
ssauctions1

We need to go back to the days of riding horses!

April 18 2012 at 4:49 PM Report abuse rate up rate down Reply
MPC

It would have been nice had Ms. Kawamoto and Daily Finance actually asked gas-station owners about this unfounded, inaccurate attack by the banks and their front group.

We could have told you that instead of reaping a windfall from the Durbin Amendment that Congress passed last year, gas station owners are actually losing money these days.

Consider: Oil Price Information Service numbers show the average national markup, or gross margin, for gas was 13 cents a gallon over the first quarter of the year.

The convenience store industry estimates the costs of selling gas was around 15 cents a gallon, meaning many retailers lost money selling gas for the entire quarter to stay competitive.

That shows the banks’ utter duplicity when it comes to talking about the fees they charge merchants for processing credit and debit cards, the highest in the industrialized world. They never considered what retailers’ costs were or how they price their gas.

The banks say “there continues to be no evidence that retailers are passing along savings from this windfall.” They’re hoping news outlets and their reporters won’t look too closely at their argument, because when they do, it falls apart.

“No evidence” seems to mean they didn’t bother to look at that question. You certainly can’t find any proof or statistics on their front group’s Web site. The banks essentially have done nothing more than estimated the drop in processing debit-card changes on gas sales over the course of the year under the Durbin Amendment and simply left it at that.

And that’s just the beginning of false statements the banks throw around on the issue of credit and debit cards, an area where they have operated in secret using fixed prices for years

They don’t mention that any savings from the Durbin Amendment and debit cards are also going to be at least partially offset by credit card fees, which were not affected by Durbin and on which MasterCard and Visa can still set rates in secret as a vast, hidden duopoly.

Meanwhile, consider this: card fees have waxed so large that they are convenience stores’ second-largest operating cost after only labor, ahead of utilities and rent.

For the last six years, according to figures that come directly from store operators – most of whom, by the way, are small businesses – the banks with their high fees make more selling gas than the convenience stores.

This is a hypercompetitive business. That’s why the Energy Information, an impartial organization that has actually looked at the data, found that 100% of cost reductions for gas retailers get passed through to consumer prices. The banks haven’t even bothered to do the research.

And in fact 48% of all consumers say a retailer near them has a discount of some kind on gas sales – and much of the time debit cards qualify for “cash” discounts (which the banks’ front group didn’t bother to find out).

So when banks tell you small business people are sitting on a windfall, don't believe them.

April 18 2012 at 9:04 AM Report abuse +1 rate up rate down Reply
1 reply to MPC's comment
Rickrak

This is just another example of government getting into business that they know nothing about.
The new Durbin rates have negativly impacted the poorer people that use debit cards. Banks are choosing not to issue unprofitable debit cards to unprofitable low income uncredworthy customers. Merchant are having a difficult time trying to survive this economy. Not just gas stations, but all businesses. I dont see anyone passing on savings. A typical small merchant might see $20.00 less a month in fees. I dont think a restaurant even if they save $100.00 is going to print a new menu so it can pass on those savings.

April 18 2012 at 1:05 PM Report abuse +1 rate up rate down Reply
k4jlp

There is no shortage of crude or gas at the pump, as a matter of fact refiners are EXPORTING millions of gallons daily overseas. Should be 1.89/gallon NOT 3.99/gallon. Hold you elected BOUGHT OFF Congress accountable. The huge TRANSFER OF WEALTH is still going on...WAKE UP!

April 18 2012 at 7:00 AM Report abuse +2 rate up rate down Reply
joe

Have a task force that looks into it. $10,000.00 per violation shopuld cover their operating costs.

April 18 2012 at 1:53 AM Report abuse rate up rate down Reply
1 reply to joe's comment
Rickrak

The Durbin ammendment does not require businesses to pass on the savings.............the merchants are not breaking any law. All businesses are fighting to survive in this economy. Any savings in accepting credit cards is helping them survive. Besides a penny a gallon is no big deal

April 18 2012 at 1:08 PM Report abuse rate up rate down Reply
Kerry

I own two gas stations and my average for credit card/debit card fees went down by .01% (that is 1/100th of a percent). The savings we thought were coming were not realized. Banks raised there credit card fees to make up for the difference. I have paid more in credit card fees every year than my husband and I make ourselves. I am most certainly not gauging anyone.

April 18 2012 at 12:55 AM Report abuse +1 rate up rate down Reply
1 reply to Kerry's comment
robsssss

ok - then its back to cash for all of us until the banks decide to stop ripping off everyone - merchants and customers.

April 26 2012 at 10:19 PM Report abuse rate up rate down Reply
kentblackdog

Sounds like a multi billion dollar class action suit in the making----- just a matter of time

April 18 2012 at 12:02 AM Report abuse +1 rate up rate down Reply
GERRY

PEOPLE LIKE JOY LING AND LL SHOULD NOT BE ALLOWED TO ADVERTISE IN THE COMMENTS IN THIS COLUMN. YOU ARE SUPPOSED TO COMMENT ON THE STORY ********!! IT DOESN'T HAVE ANYTHING TO DO WITH WHAT THE STORY IS TALKING ABOUT.

April 17 2012 at 11:35 PM Report abuse +1 rate up rate down Reply