When you use your credit card anywhere from 1 to 3% of every purchase goes to the credit card company. So by paying cash they are giving you a break on those fees.

Credit cards have fees. If you pay cash, the merchant avoids these fees. A cash discount also requires you to enter the store (where they sell things like soda and candy, that have a much higher margin than gas)

Credit card companies charge transaction fees. The gas station gives a discount for cash payers because they don’t have to cover a transaction fee when people pay in cash.

The tradeoff is that having significant amounts of cash makes you a target for robbers, and you have to count the money and take it to a bank for deposit.

You'll see this at more than just gas stations, it's not uncommon for smaller convenience stores having a "minimum purchase amount" required to use credit cards.

The reason for this is the way that credit card and debit card companies make money. For every transaction there is usually a fee of a couple of percentage points of the purchase. So if you go in and buy a soda for a dollar where the store may only be making $0.05 profit, and Visa charges a 3% fee, then the store owner just lost 60% of their profit on the purchase.

Larger companies and chains have the leverage of massive buying power to negotiate these fees down, or even get them waived entirely. So Walmart for example, is paying almost nothing if anything at all for credit card processing, and thus won't have those kind of limits.

Besides charging interest on late payments, cash advances, etc., credit card companies / networks make money by charging the store/merchant a fee (usually a mix of a % and a fixed fee, something like 2.5% + 15¢); this is one reason as to why they can offer cash back/miles as rewards. Debit cards also have a fee, but a bit less.

This is also why American Express isn’t accepted everywhere, as they charge a higher fee.

On the other hand, having significant amounts of cash transactions makes it much easier to launder money from your criminal enterprises!

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The snack bit is big, never underestimate how much companies will push the snacks.

In addition, all these card companies have increased rates dramatically over the last 2 years. This (Cash v. Card pricing) will be the norm soon across most vendors that use cards daily. Most restaurants in my area already do this if they are not corporate backed to absorb those extra fees.

Though I guess there must be some sort of control since the station is depleting its stock of gas, so it's not like they can order more gas and say they didn't sell what they had... (or can it?)

Which is a different case from doctors and dentists who'll only accept cash or charge more for any other form of payment that is not cash (including the ones that don't have fees).

Because the owners are morons who don't understand the costs of cash money because there isn't a single fee like there is with card payments.

> Though I guess there must be some sort of control since the station is depleting its stock of gas, so it's not like they can order more gas and say they didn't sell what they had... (or can it?)

Conveniently, I wrote a handy-dandy tutorial er..uh...answer to a question about money laundering earlier this year that addresses supply-chain management and other money laundering tactics.

>costs of cash money because there isn't a single fee like there is with card payments

There can be. Some banks will charge commercial deposit customers a fee for their cash deposits based on the amount of cash being deposited (usually once they cross some threshold, such as $.0075 per $100 for cash deposits exceeding $10,000 during the statement cycle). Then they will also be charged by the bank for change orders to replenish their cash drawer and keeping appropriate change on hand.

Because they actually make money on the snacks. They make a few cents per gallon, and that all depends on how many other gas stations are around.

netflix explained: credit cards also mentions how if enough customers are using credit cards they have to raise the prices for everything to account for the fees

make it easier for everyone - use cash or debit!

Man, do we sell a lot of soda, tho.

You may or may not know,.

But in the US. It's illegal to charge more for credit cards. But it's not illegal to give a discount on cash.

I've heard of gas stations where they make more profit on a single cup of coffee than they do on 8 gallons of gas.

Discounting cash sales is literally charging more for credit card sales.

So no it's not actually illegal because gas stations do it all the time.

The truth is this isn't a legal question but rather has to do with the service agreements the gas station signs with the credit card processor. For most stores, the CC processor forces stores to charge the same for cash versus credit cards. However they make exceptions for super low margin businesses like gas stations who literally cannot afford to pay the transaction fees and still make money on gasoline.

Debit cards exist, in case you were unaware. And I suppose physical checks, for the 8 merchants who still accept them these days, lol.

I often do forget about debit cards, since I don't have one. But still those and credit cards are often safer for merchants than cash.

...not the point.

I mean, they're at least partly wrong. Only a few states in the US—five, I think?—ban passing on processing fees to the customer. But what's banned is not having different prices, it's charging a fee on top of the listed price.

It's basically a truth in advertising rule, though it's weird that we made it for credit cards and not for sales tax. Anyway, the idea is that credit card surcharges feel like a penalty and cash discounts feel like a reward, even if there's not practical difference between the two at checkout.

Actually I think the reason is more like this:

In addition to charging a % based fee, credit companies also charge a flat fee per swipe. For example, they might charge $0.07 + 3%. So if the total is $1, the fee is $0.10, or about 10% of the price. The flat fee matters less as the price increases.

This is why places have minimums for credit cards.

The owners have a limited understanding of how the fees work and are passing the cost on to the customer. There is no genuine reason to do so, the owner may of just been an investor who wanted to own a simple shop however neglected to understand that there may be extra work involved, like checking the totals add up at the end of the day. It might appear superficial but the business could be someone's life savings

Ah, I misread and thought you meant cash was unsafe for customers to carry around, lol

It's not illegal in the US to charge a credit card surcharge in all but five states.

Handling cash costs money too (not just the risk of theft for employees but banking it, counting cash, fraud, requiring change..). In the UK/Europe I don't think we have the pay at pump system in many places so everyone has to go to the shop.

Just like movie theaters

Debit cards are still generally authorized on the credit card network and are subject to transaction fees (Visa and MC mostly)

While this is true, the fees for debit cards are usually smaller than the fees from credit companies, so it's still preferable to credit for a lot of businesses.

That is actually also true. The number of muggings in the US is down significantly since most people don't carry a lot of cash anymore.

Makes sense, no real point in mugging someone for their cards when they're just going to cancel them before you get a chance to use them anyway.

I suppose at this point muggings are probably focused on jewelry or small items they could take and sell rather than direct cash, which is probably enough work that it stops a lot of muggers from bothering.

Im in the US and pay mostly with cash. If I'm spending a lot of money I'll ask if there is a cash discount. Maybe half the time it works? The dentist is a big one. Small vendors and restaurants even have cash discounts signs.

Coffee is pure margin

Yep. The tradeoff is that digital crime has increased significantly, since your money can now be stolen by people anywhere in the world.

Is it literally "Illegal" or just against the terms of the agreement with the credit card processor?