A Merchant must not directly or indirectly require any Cardholder to pay a
surcharge or any part of any Merchant discount or any contemporaneous
finance charge in connection with a Transaction. A Merchant may provide a
discount to its customers for cash payments.

I constantly see how stores are not allowed to charge extra for credit card purchases, which usually happens at the trash gas stations/convenience stores. However, I was reading the rules on the Mastercard website, and it reads:How is that not the same thing? In other words, if you buy this soda, it is $1.00 with cash, but $1.10 with credit card, because you are getting a .10 discount for paying with cash? It seems the rules are saying that is okay.

It is stupid, but basically all about how they word it:

VIOLATION:

Soda $1.00
Credit Card Fee $0.39
Total $1.39

Okay:

Soda $1.39
Cash Discount -$0.39
Total: $1.00

Same thing in my book. The bottom line is the credit card user is paying a higher price than the cash customer. Regardless of how the numbers are broken down, the net result is the same and that is a higher price for the credit card user.

I opt to not visit stores with "cash discounts" or split pricing such as gas stations that post a CASH and a CREDIT price.

"Cash discounts" do tend to be rare, though. In my experience, most by gas stations, and even then they seldom last at a given gas station for very long.

Cash discounts seem to be very popular at gas stations in California for some reason. They seem rare to non-existant anywhere else.

I have seen a few stations locally start a cash discount on gas, then eliminate it fairly quickly.

...especially when you report them.

Cash discounts seem to be very popular at gas stations in California for some reason. They seem rare to non-existant anywhere else.

I have seen a few stations locally start a cash discount on gas, then eliminate it fairly quickly.

...especially when you report them.

It is actually against the branding agreements of the major oil companies to have a "cash discount." He may mean until you report the station to the oil company that branded it.

It is actually against the branding agreements of the major oil companies to have a "cash discount."

Most major retailers forbid the practice. It’s usually only crooked independent places that attempt to pull this stunt.

Did you report them?

Most major retailers forbid the practice. It’s usually only crooked independent places that attempt to pull this stunt.

…which is why this scam is rare to nonexistent.

Did you report them?

I constantly see how stores are not allowed to charge extra for credit card purchases, which usually happens at the trash gas stations/convenience stores. However, I was reading the rules on the Mastercard website, and it reads:How is that not the same thing? In other words, if you buy this soda, it is $1.00 with cash, but $1.10 with credit card, because you are getting a .10 discount for paying with cash? It seems the rules are saying that is okay.

I have never seen any Exxon or Mobil stations that offer a cash discount. I have also never seen any Chevron or Texaco stations that participate in this practice. I have been through at least eight states since the beginning of the year with these stations, and have not seen this. It may be common practice in your area, but it isn't in others.

Are you familiar with the broken window theory? Sociological research suggests that non-enforcement of minor violations of laws or rules encourages further violations from others, resulting in a viscous cycle that continues to breed breaches of what is defined as acceptable behavior.

This isn't esoteric stuff. People are more likely to litter if a city does not respond to a litter problem with cleaning and enforcement. The mere presence of litter is likely to breed more litter, as those who are not inherently inclined to litter feel that they aren't creating a problem that doesn't already exist.

Anecdotal evidence presented in this forum suggests that violations tend to cluster. Certain cities, and even certain sections of cities, have a high concentration of violating merchants. Although correlation is not causation, the argument that violations breed violations does have merit.

Houston, Austin, Dallas for starters all have stations under the four banners that are offering cash discounts. I also saw some other brands in Oklahoma as recently as last month.

How very strange. I have not come across a Chevron that does this, and I've been to many in California both corporate owned and franchise/dealer operated or similar agreement.

It is also my understanding that Chevron's standard mandated (Nucleus; not all stations use it, but many do) register system does not support a multi price model, so it would be very interesting to see how the station handles giving customers a cash discount.

Just as some merchants violate the credit card rules, some gas stations violate their branding agreement. Just because you see something in practice does not mean it is legal.

"There's nothing in the franchise agreement that would restrict them from offering a different price," said Exxon Mobil Corp. spokeswoman Beth Snyder. The company, which has about 90 independent franchised stores in Connecticut, recommends that franchises stick with one price, but dealers make the final decision on pump price, she said.

Shell spokeswoman Anne Bryan Peebles said the Netherlands-based oil company doesn't promote discounts for cash, but doesn't ban them, either.

Tala said Hess Corp. was fine with his decision to offer a cash discount. He knew that Connecticut law already allowed cash discounts, but banned surcharges for credit, and decided to begin offering a lower price on Memorial Day weekend after credit card sales became 90 percent of his business. They had been only 40 percent when gas was under $2 a gallon.

Tala said he wound up paying about $12,000 to $13,000 a month at his Newington store for credit card fees. He wasn't making enough money to cover his costs.

Bill McKnight, president of Brandon, Fla.-based Automated Petroleum & Energy Co. Inc., a BP, Chevron, CITGO, Sunoco, Texaco and Shell distributor, has offered cash discounts since 2006, when gas prices — and his lessees' credit card fees — began rising significantly. More than 180 of the 300 stations the company supplies and leases offer 5 cents per gallon discounts for either cash or major oil company-branded credit card transactions.

"Why penalize the proprietary cardholder because of Visa and MasterCard's rates?" McKnight said, noting the discounts have helped the company build its proprietary card business.

The major oil companies initially took issue with McKnight's plans to offer discounts, he said, "but they don't have a problem with it now. They won't go out and promote it, but I know some majors are testing discounts with their branded cards."

I have never seen any Exxon or Mobil stations that offer a cash discount. I have also never seen any Chevron or Texaco stations that participate in this practice. I have been through at least eight states since the beginning of the year with these stations, and have not seen this. It may be common practice in your area, but it isn't in others.