While smaller purchases can add up, very large fuel purchases are when profits take a major blow, he said. The store is responsible for paying credit card fees on every purchase, not just gasoline or diesel purchases. In addition to paying a 18-cent transaction fee, the store is also charged 2 percent of the total purchase itself.
Last month, the Moreland BP gas station paid $4,700 in credit card fees. Due to the sheer volume of customers, the station sometimes pays up to $200 a day for credit card transactions.
At the Lexington Avenue Chills Quick Stop, owner Chris Hill said the store pays $3,000-$4,000 in monthly credit card fees. At his other store, credit card payments are picking up. Charges can range from $600-$1,000 a day.
What's worse is that sometimes credit card systems charge each time a card is swiped, whether the card works or not, Glen Dotson said. Recently a customer ended up swiping a card four times just to get the machine to read it, and that adds up to almost a dollar for the gas station to pay in transaction fees alone.
According to a February report by the National Association of Convenience Stores, an international trade organization, the credit card fees paid in 2006 ($6.6 billion) exceeded convenience store profits ($4.8 billion).
Both Glen and Maxine Dotson have noticed the credit card fees growing in the past almost nine years of the store's operation. Their fuel company, Southern Petroleum, changed the delivery method of their credit card transactions. Instead of using a phone line to transfer the information, the store now uses a satellite system to process cards, they said.
This change has caused credit fees to rise substantially, they said. As a result, the Dotsons have started charging a credit card fee, which is about 6 cents more per gallon than buying gas with cash. The Dotsons say this has helped finance the amount of credit card fees the store incurs each day.
"Something is wrong," Glen Dotson said. "Somebody somewhere is cheating. We're fed up with it; we're tired of doing it."
Paul Chambers Sr., owner of Chambers Marathon in Danville, started noticing the credit card fees about a year ago. He's been in business for almost 40 years.
Chambers said he's more worried about customers using credit cards to buy less costly items such as soda or a pack of chewing gum. At his store, there is a 19-cent transaction fee for credit cards, in addition to an overall 3 percent charge for the purchase itself. Credit card charges are almost 11 cents per gallon of gas at his store. For debit cards, the overall percentage is 1 percent cheaper (2 percent). "Every time they come in, we lose money," he said.
Minimum purchase limits
Refusing credit cards is not a viable option at this point, since about half of his customers use credit cards to finance their purchases. Chambers said he would probably make more money if his store didn't take credit cards, but he wants to meet his customers' needs.
At Chills Quick Stops, Hill said he put a $5 minimum purchase price on credit card purchases because customers would use a credit card on small purchases. For example, if someone buys a pack of chewing gum for 35 cents with a credit card, there will be an automatic surcharge of about 13 cents to run the credit card plus a 3 percent overall charge. In total, the store will pay about 14-15 cents for a customer to buy a 35-cent pack of chewing gum.
Hill said he may stop taking credit cards in the future, if things get worse.
"People don't realize the fees associated with credit cards," Chambers said.
Every five days, Chambers' station gets about $30,000 worth of gasoline delivered. In his most recent gas delivery, he got an 8,400-gallon load. When customers buy fuel with cash, his store makes about 4 cents per gallon.
Hill said the high gas prices don't seem to be affecting his gasoline sales negatively. In fact, comparing last March to this March, his gas stations have sold about 9,000 gallons more this year with prices much higher. When he started his business five years ago, gas was $1.39 per gallon. Now gas prices are topping out at about $3.80 per gallon nationwide, according to AAA.
"Times have changed," he said.
With gas prices higher than ever, Hill sees many customers budgeting their money. Instead of buying cigarettes or candy in the store, they will just buy gasoline. But this also causes profit problems as more profit is made on in-store products than on gasoline purchases, he said. "We don't make anything on gas," Hill said. "I hate it."
Chambers said his store makes enough money to cover the bills, but it's still hard. What's really keeping the store afloat is customers paying cash for their purchases, he said.
The Dotsons at the Moreland BP have been telling their customers about the credit card fees, and many of them have started paying in cash as a result.
But even with credit card fees, convenience stores still find the strength to continue their businesses.
"We're doing the best we can," Hill said. "We watch our Ps and Qs and we've laid off some employees. We also have to make current employees work more hours."
