CHESTER, Pa. -- Wawa has started a program it hopes will encourage its customers to pay cash at the gasoline pumps, bucking a trend of increasing use of debit and credit cards, reported The Chester Daily Local.
At nine of its stores, including one in Nottingham in southern Chester County, Pa., the company is offering a cash discount for gasoline purchases. Depending on the location, the discount is 1 to 5 cents, id Steve Gamble, gasoline services manager at Wawa, told the newspaper.
The intent is to "pass along savings to our customers," he added.
Five of the stores in the [image-nocss] program in the Lehigh Valley have been testing it for six months. Last week, it started at several stores in Maryland and this week, several stores in New Jersey will also offer the cash discounts, Gamble said.
In the Lehigh Valley, "customers are giving us positive feedback," he told the newspaper. "As we get closer to our core market in the future, we will start the second phase of testing."
One thing to consider is how the cash discounts will play out in different states, Gamble said. He pointed out, however, that if customers use the Wawa Visa card, the points back will be more beneficial than the cash discount. The Wawa credit card offers 10% savings on Wawa purchases for the first 90 days and 4%, thereafter.
Rolf Hanson of the Associated Petroleum Industries of Pennsylvania said while this is not a trend, it does happen usually as a way for individual companies to bring customers through the door. "It is a marketing opportunity," he told the paper. And Ross Dibono, executive director of the Pennsylvania Gasoline Retailers Association, told the paper that cash discounts are happening in different pockets of the country.
There is no conflict with the credit card companies because the store is not upcharging. Upcharging, Dibono explained, would be if a customer bought $50 in gas but was charged 5% more, or $52.50, if the customer used a credit card. Instead, it is offering a discount. If the customer rings up a $50 gas purchase, a 5% discount means the customer would pay $47.50 in cash."
We would love to see Wawa do this across the board," Dibono told the paper.
In addition to saving the customer money, cash for gasoline helps the retailer, the report said. Credit card companies charge an interchange fee. At present, that fee is 3%, Dibono said. At $3.30 a gallon, 3% is 9.9 cents. The retailer makes 10 cents a gallon, "if they are lucky," Dibono added.
As gasoline prices go up, interchange fees go up, too, "taking all the profit out for independents," Dibono said.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.