JEFFJAGUAR

.....and when you add on the costs of maintaining cash, the theft of cash and the fact a credit card holder is much more likely to say, "Fill it up, please" rather than "$10 please" the station operators do much better with credit sales.

It just doesn't make sense.

cbn42

If you know so much about this business, then why don't you start your own gas station and charge the same price for cash and credit? Let's see how long you last.

The beauty of the free markets is that both buyers and sellers have choices. In this case, sellers have found it advantageous to offer cash discounts. In my city, just about every gas station does so. I highly doubt that they are all making a big business mistake and that you know more about selling gas than they do.

I can't tell if you're being facetious or if you actually typed that with a straight face.

Happy

From a pure accounting view point, the cash saved is NOW, Present Value. The perceived, or hoped for, value of the miles is future, A value needs to be discounted with the time - in this case it would mean the miles will only have theoretical value "on the book" but not a "realized" value until they are being used - who knows WHEN that might be? not to mention the inevitable devaluation.

Add to that when one has 300K Avios sitting in the account and near a million sitting in AA account plus multiple half million in other accounts, plus several K's airlines vouchers - whatever Avios acquired would be at the bottom of the barrel - almost like a dead cost but it is a very high cost!

It would only work for those whose miles and points account balances are very low or need to top up to reach an award, thus paying 3% cash rebate equivalent while a very steep price, it may still worth to those. Otherwise cash is the king in this scenario.

JEFFJAGUAR

It's elementary. In those states which prohibit surcharges on use of a credit card, if I use a credit card to purchase gas am I being asked to pay more or not. To me, that is a surcharge prohibited by state law in those states. A cash discount would mean that all pumps are set to the higher price and that is the price advertised on the sign and after a cash discount applied.

At least that's the way I see it. All the rhetoric in the world will not change that in those enlightened states that prohibit credit card surchages, somethjng is wrong and it has nothing to do with the free enterprise system.

sdsearch

No, that's not how it works at cash discount gas stations in Calfironai with pay at the pump capability. The cash price is displayed on the pump, and then moment you swipe a credit card (before you start pumping), the pump changes to showing the credit price. That way you see the price you're pumping even before you start to pump (as well as seeing the correct running total while you're pumping).

But note that this is Califnoria, a state that "doesn't allow surcharges". These are not at all new. I'm describing the Central Valley* (along route 99) gas stations, many (but not all) of which are cash-one-price-credit-another-price, and which have been that way for many years. (None of the "trucker" gas staitons, like Pilot/FLying J, Love's, etc, have a separate price for credit vs cash, and they usuallly at least match the "cash" price of the "conventional" gas stations, so that's where I most often gas up when driving the 99.)

*The Central Valley along 99 is not the only place where there are cash-one-price-credit-another-price gas stations, I've also seen a handful in Orange County, but not in Los Angeles County yet.

jamar

Point taken. In my case I'm one person redeeming for three (my mom, who has trouble keeping one credit card straight, let alone five or six, my sister, who trashed her credit with delinquency on her first credit card, and me), so none of my point balances have ever been above five digits except when lots of CC bonuses roll in at once or I buy them. Took me a while, but I now realize that other people here do indeed have lots more than that floating around with nothing to do with them.

Happy

Most folks have lots of miles do know what to do with them, and in general they are actually quite cost-sensitive in acquiring miles.

Bottom line - in anyone's case, it really boils down to a cost analysis.

The cost you incurred to collect your miles is the saving you forfeit when paying with a credit card. 3% means $0.03. That is a very steep price to pay for miles because often when you purchase miles directly from airlines you dont even pay such a high price... Several times a year the airlines also run promotions on various bonuses. If you are in great need of miles you can actually acquire your miles more cost-effectively this way.

benzemalyonnais

This could potentially turn into what I regularly experience in Holland, where CCs have become the #3 form of payment, behind debit and cash. I can't use my cards at supermarkets.....

I just booked a DUS-AMS train ticket online and paid a 2.5 Euro surcharge to use a CC. Since I don't have a Dutch debit card, I load up my transportation card whenever I'm at Amsterdam Centraal station for a .50 fee so I only pay it once. It's a necessity riding the buses and trams and trains.

Anyways, what would happen if Americans collectively stop preferring credit cards to debit cards because of fees passed on? It wouldn't surprise me, especially after the whole BOA debit card debacle. Americans hate fees, and those gas savings promotions I've seen popping up will definitely be a huge hit. Americans are also willing to spend 3 dollars driving around town to save 3 dollars on gas.....

percysmith

US$0.03 a mile?
With some cards in HK I can get as low as HK$0.04 a mile (Asia Mile) (US$0.005).

Of course only when the cards on promo tho.
There's one with a six-month long uncapped promo (the issuing bank is hurting!)
We're finding anything with a secondary market resale value - we don't have mint coins here in HK, but we're flipping iPhones, pharmarcy gift vouchers, supermarket gift vouchers, jeweller gift vouchers - anything that's can be sold to 97 cents on the dollar or better to scalpers.

cbn42

Well, I personally favor cash back credit cards rather than points/miles. Besides the fact that there is no annual fee, it is easy to determine what the cash is worth. For example, if I am getting XX% cash back on gas in a particular quarter, I can quickly do the math and see if I am better off with the cash back from the credit card or the cash discount from the station.

I would recommend cash back cards rather than airline cards unless you fly a lot with one particular airline and want the priority boarding, free bags, etc. They make the game a lot simpler.

jamar

Not a single airline, but rather long distances less than a month in advance. One recent redemption I made on behalf of my sister was YVR-PVG. She told me three weeks before she needed to go, and because of how the family is, not going is not an option. 62500 miles or $2400 cash for Y (it was because my sister regularly did this that I got into the game, actually). I would need more than 3% cashback to make that a better value than UR points->UA miles or straight-up UA miles.

Altaflyer

Merchants in Canada now usually give you 90-95% on a USD since a bank will generally give them around that when they trade it in for CAD.

AA_EXP09

RT or OW?
Dd she check EVERY available airline?
This was probably a last minute redemption, so this would be one scenario where I would use my miles to go in any COS (though I would try my best to get F first...)

jamar

RT. And my family is... picky. Everyone refuses to transit through an overly-complex airport or overnight in a third country (there actually was something cheaper at the time- YVR-NRT//HND-SHA or YVR-NRT(overnight)-PVG on JL was some $1000 cheaper but my mom- the reason my sister had to go to PVG and the person who would've paid for the ticket if we hadn't gone the award route- said no on the basis of my sister being "a young, vulnerable girl" who shouldn't be alone at night in a foreign country; for reference, she's in college) which limits options.

They're all perfectly OK with it if I'm with them, or if I'm going alone, just most of the rest of my family looks at me as some sort of frequent-traveler deity and such things as overnight transit in NRT are too arcane to understand for them (my extended family has an excuse; they're PRC citizens and as such have no guarantee that they'll get the 72-hour transit pass on arrival in NRT/KIX/etc, but not my sister).

This time, since I got a bit more advance notice, she's coming back in J on CX using AA miles with the latest bonus (going in Y, but there's only so much I can churn as a student without looking suspicious). Apparently transiting HKG sounds much less difficult with the promise of a J seat dangled in front of you. Especially CX J.

cbn42

Update: federal judge rules that merchants have constitutional right to impose surcharges.

News article is at http://finance.yahoo.com/news/judge-...8--sector.html

Ruling is at http://ia601904.us.archive.org/3/ite...12814.63.0.pdf