Parker's Pumps Up Gas Discount

Offers 15-cent debit-card promotion to match local competition

SAVANNAH, Ga. -- If gasoline sales were a poker game, Greg Parker has called Flash Foods' 15 cents. Motorists are benefiting from an ongoing price war among stations competing for customers using store-issued debit cards, according to a report from Savannah Now.

The competition heated up Jan. 31, when Parker rolled out a debit card at some of his 25 stores in the Savannah area. Customers who have an e-mail address, checking account and driver's license can sign up for a Parker's debit card that gives a discount of "up to" 10 cents a gallon at the pump.

Parker [image-nocss] said at the time he hopes the discount will be at least 10 cents a gallon, but he couldn't guarantee that price; that's why he said "up to" 10 cents, according to the newspaper.

Murphy's gas stations and Flash Foods stores already offered a debit card through the same company--National Payment Card Association. Murphy's offered a discount of 3 cents per gallon to customers using its card; Flash offered a discount of 5 cents.

Then Flash upped its discount from 5 cents to 15 cents at eight locations near Parker's stores. A company spokeswoman told the newspaper the move was made so they could match Parker's prices and remain competitive.

In the latest twist, Parker has upped his 10-cent discount to 15 cents at some stations.

"We are committed to being the low-price leader where we compete," Parker said Wednesday, adding that he's taking the fees he would have paid to MasterCard and Visa and passing them along to the customers.

With the 15-cent discount, "we're losing money," Parker said. "We'll do it as long as our competition does it."

Click hereto read more about Parker's gas-pricing strategy.

Prices on Monday at Parker's in Port Wentworth, Ga., were $3.23 for the debit card and $3.38 for credit cards. At the Flash Foods three miles away, the prices were the same. Nearby Enmark and Pilot stations, as well as a Murphy's, were priced at $3.39 a gallon. Enmark offers a 10-cent, pre-paid discount card, according to the report.

Gasoline prices in Savannah averaged $3.47 a gallon Monday, up from $3.07 a month ago, Patrick DeHaan, senior petroleum analyst at GasBuddy.com, told the newspaper.

"It's good for motorists," DeHaan said of the competition. Gas stations in other parts of the country also are courting debit-card users, but the discounts are 5 cents to 10 cents, not 15 cents. Fifteen cents is unusual, he said. "Essentially, they're punishing each other," he said of the warring stations.

The competition is healthy until it begins to hurt the bottom line, DeHaan said. "That extra 5 cents may feel good now, but if stations close and you lose competition, that's bad."