ARCO debit card fees–Again?

Oregon readers know about our gasoline rules. In Oregon, there is no self-service. So when you pull up to the pump and ask the attendant to gas it up, you commit to the purchase the minute the gas starts flowing into your tank.

ARCO does not take credit cards. Consumers can pay cash or with debit cards.

Over a decade ago, I did my first consumer class action against ARCO in Oregon. They were charging an undisclosed debit card fee for consumers who paid with debit cards.

After a hard-fought battle, we settled that class action case many years ago. Part of the settlement required ARCO to post debit card fee disclosure signs at the pump. We demanded the fee notices so that consumers would know before committing to the purchase that they were paying an extra charge.

That extra charge is now 45 cents per purchase. So when you buy five gallons worth of gas, it is nine cents per gallon more than the posted price if you pay with a debit card.

That’s right. It appears that ARCO, which is now a subsidiary of Gulf oil spill British Petroleum, is back to nickel and diming consumers. My annoyance knows no bounds…I really dislike nickel and diming consumers.

If you have had a problem with ARCO debit card charges in Oregon, I would appreciate a call or an email so that we can properly analyze and address this problem.

Leslie Pilotti says

Tired of the fee's regardless. I traded a propane tank at a local ARCO in California and was charged $.35 for my purchase. Is it not enough that they guzzle extra money from customers for gasoline, and now they are charging on propane exchanges too? This is the information posted on their website:

Why is there a $0.35 convenience fee for the use PIN debit cards?
In an effort to balance the customer's need for convenience and value, PayQuick terminals are available on our islands. PayQuick is an easy way for customers to pay for their gas using cash, debit cards, PumpPass or GasPRO Plus Cards. There is a 35-cent processing fee for debit cards only, in addition to any fees your bank may charge for this service. For all other transactions there are no additional fees. This allows our customers the flexibility of using a debit card.
*This 35¢ convenience fee is the amount ARCO® and ampm® charges for debit transactions. The amount of this convenience fee may change from time to time without prior notification.

According to this statement (which could be tricky by the way they worded it,) they charge for the payquick terminals, and all other transactions are not fined by their little $.35 trick...

Steven Collins says

So pay cash! I'm a Taxi cab driver, and AM PM/Arco saves me several dollars a day, even in my Prius.
It's just common sense, accepting credit cards or debit cards costs the retailer. Cash doesn't. If it's part of how they keep their prices lower than EVERY other station, I'm glad to tolerate the slight inconvenience. If the inconvenience is too much for you, just go pay more somewhere else. And quit your whining.

David Sugerman says

Thanks. As long as they follow Oregon law and clearly disclose their fees so that consumers know before they pull in, then I don't have a beef. But they can't add undisclosed charges without telling the consumer. It's really pretty simple that we should be able to rely on the posted price. It's also unfair to other stations that post their prices with complete information.

Bill Coffman says

So today I bought gas at the ARCO at Delta Park. The posted price was the best around. At the pump, I handed my AMEX card to the attendant who gave it back and said I'd have to pay inside when he finished. Having seen the big splash ARCO made about dropping credit card fees, I didn't think much about it. But, of course, when I went inside to pay, a 35 cent fee was added to my purchase. I don't know if there's any recourse for that, but I sure won't be going back to ARCO again. There was no notice of the fee on the big pricing sign. I don't think there was any notice posted at the pump either. It's pretty sleazy to operate in that way in my opinion.

David Sugerman says

Sounds familiar.

Ed Law says

Well, what about the Durbin act? Wasn't this supposed to alleviate high debit card transaction rates, ESPECIALLY for gas stations? On average, a merchant will get charged .25 a transaction for debit cards. So why is ARCO Charging .35 - .40?
If they are saying we are paying for the convenience of using a terminal to process credit cards, so what? Are you kidding me? What gas station in this country doesn't accept credit cards??
They are getting away with a fast one and I'm really suprised no one has called them on it.
Critics of the Durbin act (banks, typically) said that merchants wouldn't adjust their prices and pocket the extra savings, instead of passing it on to the consumer. Well, they were right! And with ARCO, they are sticking it to us with this .35 fee. They are making money off this fee.

David Sugerman says

Great question and a good point. I have not thought about this issue because the Oregon Unlawful Trade Practices Act provides strong protection for Oregon consumers. This is another great example of how much I learn from our readers. Thanks so much for the comment.

Joe says

How does Arco get away with passing surcharges on debit card transactions? Visa's website says merchants are not allowed to surcharge debit card transactions, and Arco seems like they are the only ones doing it. Did they have a settlement with Visa at some point that gave them this priviledge?

David Sugerman says

Good question. My understanding is that the Visa rule applies to its network. I don't think BP processes through them. I could be wrong, but that's my current understanding. Anyway, they are violating Oregon consumer protection law, so that's the bigger problem.

Jay Corna says

ACRO gas at AM-PM Almaden and Cherrie in San jose Ca. is doing the same , we hate it,, Please advise??

David Sugerman says

Please call my office (503)228-6474 M-F 8.30 am to 5.00 pm so that we can get more information.

Brian says

I have read countless articles that state in the state of California no surcharges can be applied to purchases made with debit or credit cards. The only way a merchant can recoup their fees is by offering a discount to cash purchases. I'm not sure why ARCO can get away with charging a $0.35 debit surcharge when the practice of charging a surcharge to debit cards is prohibited in most if not all of the United States. Additionally, while credit cards now allow the merchant to impose up to a $10 minimum, there is no minimum allowed for merchants who accept credit cards.

Does anyone know how ARCO legally charges a surcharge even if you use the POS terminal inside the store? Does it have something to do with the fact that the gas is paid for in stand alone terminals throughout the gas station.

I'm assuming that since ARCO is high profile, that they should know the laws and that what they are doing might be legal somehow. I just don't see their angle. It seems as if they are doing this illegally.

Another high profile company that assesses a $1.00 surcharge on debit cards is Carl's Jr. They don't use special terminals. You swipe your card at the POS terminal and they offer for you to choose debit or credit. Oddly enough, they impose no surcharge on credit cards. How does a high profile company get away with this practice.

I understand that small businesses like mom and pop's may get away with this by flying under the radar and because of customer's lack of awareness about this issue. I don't understand how high profile companies can get away with this practice.

David Sugerman says

Thanks for your comment. In Oregon, they did not get away with it. We're putting the final touches on the case here that will result in a judgment of approximately $340 million. As to California, I am not licensed to practice there, but you raise a really interesting question. If you contact me privately, by email or by phone 503.228.6474, we can put you in touch with California counsel. No charge for the call, of course. -David

Tina Coats says

San Bernardino, CA
They all charge .35 cents for getting gas. I thought by law they had to offer alternative ways to pay; debit, cash, credit card? They are forcing people to comply to the charge but what people don't know is that there is a law against this practice. They are breaking the law and what can we do to stop it??

David Sugerman says

Different states have different laws. The practice is illegal in Oregon. We got an injunction--we stopped them in Oregon. Not sure what rules apply in CA. I am not licensed there.

Casey says

This is ridiculous, if I go and buy a pack of cigarettes from my local convenience store in Gresham Oregon I get charged a fee for using my debit card, it's 2016 I don't carry cash and they know that, that's why they charge that fee, they know you don't have paper on you

David Sugerman says

There are special rules in Oregon covering gas sales. When you buy 10 gallons of gas at $3.50 a gallon, you should pay $35, not $35.35. If you're unhappy about paying a fee on your cigs., you can always walk away from the deal. Not so with gasoline. The gas is in your tank. That is why the jury and the judge found in our favor.

Michael Allen says

I am charged .10 cents per gallon of gas more because I use my debit card. This is posted and easily seen.. My question, is this legal? I will most likely find somewhere else to go.. but even at 3.5 percent of a transaction to cover costs is less than 10 cents per gallon..seems like making money more than covering costs!

David Sugerman says

We don’t give legal advice on the blog.

Michael Allen says

This is in Oregon by the way.

Comments for this post are closed.