ST. ALBANS: June 30, 2008-- A Kanawha County gas station's protest of credit card transaction fees may have caught the attention of Visa.

In part to sky-high gas prices, Mr. Ed's Chevron, at the corner of Kanawha Terrace and Walnut Street in St. Albans, stopped accepting Visa, MasterCard, American Express, Discover and other major credit and debit cards on June 1. The station was losing 98 cents for each $50 charge for gas.

Local news coverage turned into nationwide exposure for the mom-and-pop Chevron station, which has since been featured on CNN, Fox Business Network and newspapers across the country.

Now Visa, the San Francisco-based credit card giant, has announced it would reduce the transaction fees it charges gas retailers after filling stations such as Mr. Ed's complained about surcharges eating away at their profits. Visa said it plans to lower fees by 14 percent on a $60 fill-up, and by 43 percent on a $120 sale.

But it's not enough to lure Mr. Ed's back into accepting major credit cards.

"It sounds good on paper," said station manager Roger Randolph. "We'll have to wait and see. With today's gas prices and our profit margin, it probably wouldn't be enough. It would have to be a whole lot more."

For each cash transaction, the station makes only 1.6 cents per gallon, Randolph said. With more expensive fill-ups at $50 or more, a credit card transaction puts Mr. Ed's in the hole, he said, because card companies charge between 12 and 15 cents per gallon.

"The nice thing is that it's a step in the right direction," Randolph said about Visa's new plan.

Mr. Ed's has lost a few customers since dropping plastic from its payment options. Mostly out-of-towners will stop by the station, notice that it doesn't accept credit cards and drive off, Randolph said. Its regular customer base has remained loyal.

"For the most part, 99 percent have adjusted and have converted to cash without complaints," said Randolph, whose father, Ed, owns the station. It opened in 1964.

The station still takes Chevron and Texaco cards because they are parent companies and do not impose surcharges. The credit card fees are a fixed percentage of every transaction, usually less than 2 percent. Each time gas prices shoot up, so does the dollar amount of the fees. In addition to cutting the transaction fees, Visa said it would cap its fee for debit-card purchases at 95 cents. These changes will go into effect July 18.

Randolph acknowledges Mr. Ed's isn't the first to reject credit cards because of the transaction fees. He said several small gas stations across the country already had moved in that direction.

But the national media picked up on the St. Albans gas station.

The Daily Mail first reported earlier this month on Mr. Ed's no longer taking plastic. The Associated Press then wrote a story, which was picked up by several large newspapers including the Chicago Tribune and Detroit Free Press.

CNN and USA Today called Randolph last week for their own stories, and Fox Business Network interviewed him live via satellite.

"It's kind of neat to be part of something that brought about a little change," Randolph said. "I'd like to think this was the spark that brought the issue into the light. There have been folks around the U.S. that have not been accepting credit cards, but for some reason, we were the ones that caught the news."

Other small business owners around the country have called Randolph to express words of support and encouragement, he said.

"Small businesses understand," he said. "We're an old-fashioned service station. We're a dying breed and we don't buy bulk quantities of gas like other big chain stations. They have buying power. We don't have that luxury."

The average price of gas today in West Virginia was $4.08 a gallon, according to AAA. Last year it was $2.95.

Now that gas stations have the attention of credit card companies, maybe there will be a spiraling effect among oil companies, Randolph said.

"Everyone's making money but us," he said.

Source/Writer:

Charleston Daily Mail
By: Jake Stump