WASHINGTON -- Isaac Newton said, "For every action, there is an equal but opposite reaction." The Electronic Payments Coalition (EPC) is calling on members of the National Association of Convenience Stores (NACS) not to display pumptopper advertisements that it claims "mislead consumers about the cause of high gasoline prices." The coalition said "the NACS ad gimmick is part of a high-cost lobbying campaign designed to provide a financial windfall to the world's most profitable companies at a cost to consumers."
The NACS pumptoppers, provided free for download or for cost from a signage [image-nocss] provider, provide these messages: "That pain you're experiencing is caused in part by secret credit card fees. Go to unfaircreditcardfees.com and click act now to tell Congress to pass the Credit Card Fair Fee Act" and "Tell Congress you want to know how much this fillup cost you in credit card fees. Go to unfaircreditcardfees.com and click act now to tell Congress to pass the Credit Card Fair Fee Act." (Click here to access the NACS pumptopper webpage.)
EPC director Peter Madigan said, "American consumers are looking for relief from skyrocketing gas prices—not gimmicks from a high priced lobbying campaign designed to line the pockets of the largest and most profitable retailers. This sort of deceptive advertising campaign about the cause of high gas prices does not do consumers any good and insults their intelligence."
NACS said the EPC press release urging retailers not to display the c-store group's pumptoppers is "rife with errors." In 2007, retailers paid the credit card companies more than two-thirds of every dollar they collected ($7.6 billion in credit card fees versus $3.4 in industry profits), said NACS. With today's gasoline prices, retailers are paying upwards of 10 cents a gallon in credit card fees, yet EPC notes that retailers only pay "a penny or so per dollar," it said.
"The fact that Visa and MasterCard don't want retailers to display these pumptoppers is the best reason to put them up," NACS senior vice president of government relations Lyle Beckwith said in a response to the EPC release. "Obviously, the credit card companies are concerned about the traction that the Credit Card Fair Fee Act has gained in Congress. We appreciate that the Electronic Payments Coalition is publicizing our pumptopper program, and giving more visibility to the issue."
Congress is currently considering legislation that would provide large retailers an antitrust exemption that would legalize collusion in order to artificially lower the prices they pay to accept credit and debit cards, EPC said. This government intervention to lower retailers' costs of doing business will ultimately increase the cost of credit for consumers, decrease or eliminate card reward programs and reduce access to affordable credit for those who need it, it claimed.
As an alternative, EPC has provided free posters and flyers, available as a download through the EPC website, to help them educate their customers on the true costs associated with a gallon of gas, as provided by a "credible source," U.S. Department of Energy. (Click here to view the EPC's poster.)
"It is grossly misleading—and frankly not even believable—to imply that the penny or so per dollar merchants pay to accept credit cards has anything to do with skyrocketing gas prices," said Madigan. "Credit and debit cards offer significant benefits, both to the gas retailers that accept them, and to the customers that pay with them. It is important that consumers have a clear understanding the full picture here."
According to the Energy Information Administration, which are official energy statistics from the United States government, the price for a gallon of regular gasoline breaks down accordingly: crude oil (74%), taxes (10%), refining (9%) and distribution and marketing (7%).
"We also applaud EPC for using data from the U.S. Energy Information Administration to communicate the cost breakdown of a gallon of gas," said Beckwith. "NACS has used these same numbers for years—and we continue to embrace these numbers in outreach materials like thepump price sticker NACS developed in February," said Beckwith. "Unfortunately, while EPC rightfully calls EIA 'a credible source' for data, EPC then misrepresents this data and actually communicates wrong numbers in its ads."EPC's stated mission is to protect consumer value, choice and competition in the electronic payments system. The coalition is a broad-based group of payment card networks, financial services companies and financial services trade associations whose primary goal is to educate policy-makers, consumers and the media about the value of electronic payments systems—including economic growth, convenience, speed, reliability and security—and to ensure the continued growth of global commerce by promoting consumer choice and the stability of the payment networks that connect millions of consumers with millions of retailers every day.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.