MARGINS too thin - Gas retailers stop accepting Visa, MasterCard

Chad Bryan • Sunday Gleaner Writer

In a harsh economic climate where several businesses have struggled to stay afloat, gasolene retailers are now methodically moving to implement a number of cost-cutting strategies.

Recently, the Jamaica Gasolene Retailers Association (JGRA) held an emergency meeting amid concerns that several retailers have either gone out of business or are on the brink of failure. One of the decisions taken was to stop accepting Visa and MasterCard credit cards for fuel.

President of the JGRA, Trevor Heaven, stated that "among the other reasons, the predominant reason is that the payments to the bank are significantly larger than the retailers' margin".

He said: "Credit-card charges range from three to three and a half per cent, tax included, and it makes no sense to accept MasterCard and Visa credit cards. We are also aggressively pursuing our own gas card to replace this."

The move does not affect debit cards.

AFFECTS ALL JGRA STATIONS

The decision affects all service stations that fall within the JGRA's ambit.

"This is something we have been pushing for a long time. We were not serious until now, so this is just a part of our cost-containing measures," said Heaven.

However, JGRA member stations will continue to accept NCB Keycard, which costs about 1.3 per cent - a cost that Heaven points out his organisation is seeking to lower.

"We have had our discussions with NCB and Scotiabank regarding the international Visa and MasterCard credit cards and the rates set, which are internationally determined and they can do nothing about it," Heaven pointed out.

He said JGRA is "a little disappointed" that two banks have elected to do international debit cards for dealers, "as our understanding of this is that these banks want to remove traditional debit cards and replace them with those".

The JGRA, which celebrated its 61st aniversary this year, states on its website that it represents over 85 per cent of the country's gasolene retailers.

Other cost-cutting measures being examined by the JGRA include having more self-service operations. This, however, will not result in job cuts, the JGRA president said.

"We do not intend to make anyone redundant. Our staff has been with us for a long time. We may have to deploy them to other income-generating situations. We had on the table recommendations to start charging for air at the tyre pumps. It will be a small token charge and this will help to also offset costs," said Heaven.

One person with whom Automotives spoke says she will be severely affected by the move to stop accepting Visa and MasterCard credit cards. She said that she 'juggles' her credit card, using it to pay for utilities and gas in a particular month and then clearing her bill when she gets paid.

"This means I will have to find another way to pay off the credit card, as the money I would normally use I will now have to pay cash for gas," she said.

Customers hoping for a reprieve at the pumps with the new cost-cutting measures will be disappointed, as the cost of fuel continues to increase.

"Prices are subject to Petrojam changes. We are not seeking to reduce prices at this time. If prices trend downward, so will we. We are trying to cut cost and contain our cost size. We are trying to offset costs, rather than cause increases to the public," explained Heaven.