Why Can’t We Get A Refund On Gasoline?

[On Par]

It's a novel idea, and one I just imagined as I drove by a gas station and noticed them changing the price.

With most retail stores, if you purchase an item for say $49.99, and the following week, it goes on sale for $29.99, with no need to have the actual item, you can take your receipt to the store, and they’ll refund you the difference in the price. More succinctly, recently I purchased a new computer chair at Office Max at $129.99. Two weeks later, not one, but two weeks later, the chair went on sale for $99.99. With my receipt in hand, Office Max gladly refunded the difference, and would have done so up to 30 days!

So, here’s the question, if you purchase gasoline at $2.99 per gallon, and it goes on sale for say $2.69 the following week or even two weeks, why shouldn’t we be able to get a refund? Why should all of the money go in one direction and not the other?

Yes, I know what you’re saying. It’s a consumable product; you have nothing to return, or proof of how much remains in your gas tank. As I drove along this morning, I wrestled with that question. The answer became crystal clear. It doesn’t matter whether you consumed it or not. You purchased it. You have a receipt that shows date, price, and quantity. Therefore, with your next fill-up of gasoline and receipt in hand, you should be able to have your payment reduced by the difference in price of your last purchase to this purchase. And since your gasoline tank takes a finite amount, you are only getting a refund on the amount used, not the amount that remains.

In short, if the price goes up, you pay the increase and the oil companies get a huge windfall profit. But when the price goes back down, you don’t get the benefit of a refund from the higher amount, and the small windfall you rightly deserve. If the oil companies can get into our pockets, why can't we return the favor?

[DemocratSinceBirth]

1. You Could Use The Same Example With Food You Get From THe Grocery Store

nt

[tx_dem41]

2. Because they don't have to.

What's the incentive? It's surely not the huge logistical nightmare and increased overhead cost that you are proposing.

[iamjoy]

3. Here Is Why It Is Different

for the most part, you need gas at a specific time. If your tank is empty and you have no where to go, you have to fill it.

With the chair or other durable goods, the companies probably adapted their policy to overcome customer objections, "I don't want to buy the chair today, 'cos what if it goes on sale tomorrow?" A chair is not as much of an immediate necessity as gas.

And, the oil companies don't see why they should do anything to reduce their profits and help consumers? They are greedy jerks.

[tx_dem41]

4. What the OP is proposing has nothing to do with oil companies...

its the retailers that he is imposing this business model on.

[iamjoy]

12. Yes, that's True

but don't the oil companies have an impact on price?

[tx_dem41]

14. They have almost total control over the price at the pump...but..

if the OP is proposing that the oil company actually offer the rebates, this whole thread is an exercise in futility.

[lectrobyte]

5. Never happen. A retail store may be willing to offer a sale-price

difference guarantee as an incentive, since they know you have lots of choices, and many of those types of purchases are optional, you can wait for a sale, etc. You have to drive every week, so you will be buying some amount of gas, high price or not.

[madokie]

6. Its a novel Idea, one I could embrace but

They will simply say they are only passing down the cost.

[On Par]

9. If They Pass On The Cost When The Price Rises...

...they need to pass on the "refund" when the price goes down!

Remember too, the price of the gasoline the retailer has in their storage tank, isn't reflected in the change of the weekly price. If nothing else, with a 14 or 30 day refund policy, the price would not rise or fall with seismograph frequency.

[tx_dem41]

11. You assume the retailer is setting the price of gas...

they really aren't give or take a penny or two.

[On Par]

7. I Agree The Oil Companies Don't Have An Incentive....

...but all it takes is "One Franchise" like the "Sheetz" company we have in the Pennsylvania area. Not only would it increase their initital sales at the pump and in their convenience stores, but they would be hailed far and wide for it being the American Way!

With it's success, and other retailers seeing a drop in their business, would need to follow suit! And with enough retailers joining the refund policy, pressure "would" come to bare on the oil companies.

[tx_dem41]

10. "With it's success"....that's your assumption.

The retailer is buying the gas from the oil company. The oil company is not going to give him/her a rebate. Since retailers are usually only charging 1-3 cents more than they pay for a gallon of gas (and sometimes actually charging less...hoping to make it up on in-store sales), I would suggest that such a business would surely fail.

[gpandas]

8. ha ha ha ha ha n/t

[DemocratSinceBirth]

13. There's Also A Little Flaw In Your Argument

The price of oil fluctuates so consequently the price of gasoline from which it comes from fluctuates too...

[iamjoy]

15. Here Is Another Reason

Say a gas station had to pay X amount for a delivery shipment of gasoline. So retailer sells it at a reasonable profit/mark up. Next shipment of gasoline is at a lower price, retailer still doesn't get a refund for the gas sold previously. So how can retailer refund consumers?

I believe I read somewhere gas stations don't change their prices until they've gone through their current supply of gasoline and refilled the underground tanks.

In the case of a store selling a durable good, they already have the item in stock, they have already paid the wholesale price for that item, which isn't going to change. That is why consumable goods are different. It would be like staying at a hotel Christmas week and then when you see the rate is lower in early January, asking for a refund.

[DemocratSinceBirth]

16. I Don't Think That's Quite Correct...

I believe I read somewhere gas stations don't change their prices until they've gone through their current supply of gasoline and refilled the underground tanks.

But your largest point is true...


The price of gasoline is fluid...

[ProfessorGAC]

17. That's Definitely Wrong

The price is triggered by the change in wholesale prices at market. Stations change their prices all the time without receiving any new gasoline. I saw it, in fact, just by my house. They had a shipment on a Tuesday. The price stayed the same. Next morning. Still the same. On Wednesday afternoon, the price went up 20%! Shipment had been in the tank for 30+ hours.

The prices are based almost completely on the current market price. Because there are times the oil prices (and the subsequent unleaded gasoline prices at market) change only slightly, the stations will avoid making price changes. The thought has been that raising one cent one day, then lowering it 2 cents the next is far more inconvenient than keeping it the same retail price for both days.

But, if you read somewhere that they don't change the price until the gas is in the tanks, you were reading something the petroleum industry wants you to believe. It has, however, no basis in fact.
The Professor

[Xithras]

18. The oil companies would never allow it.

Most people have no idea how fixed this market really is.

In my area, for example, the oil companies require the retailers to keep their fuel price within 15 cents of each other. You heard that right...they REQUIRE it. When the Iraq war started and fuel prices shot up, we had one retailer who refused to raise his prices. He explained to the local newspaper that he paid price X for the fuel in his tank, so he could still sell it for Y. He even went as far as indicting his competitors for price gouging, calling them "unpatriotic" for raising their prices needlessly in wartime. His belief was that prices shouldn't rise until the actual cost of fuel rose.

The oil companies put a quick stop to that. Less than six hours after the paper hit the streets, he had an Arco rep in his store telling him that he had to raise his prices or they wouldn't refill his tanks when they went empty...EVER. In the follow-up story, the threat was basically "Get in line or we'll put you out of business". And yes, this is all 100% perfectly legal. In fact, the state of California has laws on the books that PROTECT this practice...ostensibly to protect small gas stations from "predatory" larger chains with bigger fuel tanks. I have no idea how many other states have similar laws.

Offering a refund could easily be interpreted as a price break, and would break the "rules" for fuel resellers. Unless a 500 pound gorilla like Costco tries it, any retailer attempting to offer that kind of deal would be quickly shut down.

[On Par]

19. You're The First Poster...

..that's thinking of "How" to do it, rather than "Why We Can't!"

If Sheetz Company, in our area, that has it's own refining through "Sun Oil" and a hundred or more stations were to do it, others would have to follow.

As I said, it's a novel thought, but we need to ah "refine" the idea rather than dispell it.

[javadu]

20. Why Not Sell Gas to Consumers Like they do to Commodities Brokers?

Oil and gas companies do this on a very large scale every day. Moreover, our local grocer has a gas station outside and you can buy $5$/$10/$20 gas cards for $.02 per gallon cheaper than the "cash rate." As an alternative, I have often wished they would sell 20 GALLON cards at the going rate. As a result, I could buy 20 GALLONS of gas. If gas goes up, I have prepaid for 20 gallons and --- good for me. If prices go down --- I am screwed. You can even imagine a secondary market of retail gas options emerging.

What do you think?

[On Par]

21. I Think It's a Good Option To My Suggestion....

...Anything to help the consumer.