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Article published in Issue Number: 061202

C-stores and gas stations: Untapped potential

A typical retail merchant processes an average of $8,000 in bankcard volume per month. Compare that to the $65,000 in volume that a typical independent gas station handles during the same time period, said Dee Karawadra, President and Chief Executive Officer of the ISO Impact PaySystem.

The company, which caters to gas stations and c-stores, hosted a free webinar for merchant level salespeople (MLSs) Dec. 6. Representatives from First Data Corp. and Chase Paymentech Solutions LLC were also on the call.

Based on Impact PaySystem's portfolio, an MLS writing three gas station deals a month will produce the same processing volume as 24 retail deals in the same period, Karawadra said.

Landing an unbranded station or convenience store is not a walk in the park, he added. But many of these independent petroleum merchants are paying high rates, making them an ideal selling opportunity.

"Never go by an unbranded store without stopping by and asking for their business," Karawadra advised.

The webinar offered agents some basics of selling to the sector. Since 75% of petroleum merchants accept payment both inside and at the pump, MLSs should understand processing requirements for both, according to Brandy West, Vice President of Impact PaySystem.

The major fleet card brands include: MasterCard Fleet, Visa Fleet, Wright Express (WEX), Voyager, Fleet One and Fuelman.

When selling to gas stations, learn first whether your ISO can support the variety of fleet cards, West said. A station already taking fleet cards will require full support for them.

When approaching gas stations, some of the first things to ask are which bankcards and fleet cards they currently accept and what kind of pricing they currently get. If the station does not accept WEX and Voyager fleet cards, explain the lost sales opportunity from transportation companies relying on them, Karawadra said.

Later in the sales process, or after the sale, find out what controllers, hardware and software they use; what communications technology (landlines, VSAT [very small aperture terminal], leased lines or frame relay) is already in use; what communications hub they connect through; and whether they will need a WEX number, West said.

Gilbarco is the largest pump manufacturer and distributor, followed by Tokheim, Schlumberger and Dresser/Wayne, West said. Popular controllers include: Trendar's Smart Lock, VeriFone's Ruby, Wayne's Nucleus AFP, GasBoy and Gilbarco's G-Site.

Addressing chargebacks

Petroleum merchants have been plagued by chargebacks since gas prices climbed. They are an issue partly due to unattended, pay-at-the-pump terminals, which are card thieves' favorite place to try out plastic. Addressing the causes of chargebacks is a critical objective of the petroleum MLS.

Primary reasons for gas-pump chargebacks are fraud (reason codes Visa 84 and MasterCard 37); nonreceipt of requested item (Visa 79 and MC 01); authorization issues (Visa 72 and MC 08); duplicate processing (Visa 82 and MC 34); and nonmatching account number (Visa 77 and MC 12).

West provided a number of useful tips for reducing chargebacks and finding success in this market. She said many chargebacks can be prevented by remembering to do the following when setting up the merchant:

  • Ensure the billing name matches the name on the store's external signage, so customers won't dispute the charge.
  • Implement velocity check, which limits the number of times a particular card can be used at a location in a 24-hour period.
  • Set cardholder-activated-terminal limits at $50 to $75 (the thresholds set by Visa and MasterCard, respectively, beyond which protection from some chargebacks is not covered).

If a Visa transaction exceeds $75 but is not challenged by the issuer, it will nevertheless be downgraded. The most common downgrades on swiped transactions are on Visa consumer rewards cards, where the downgrade rate jumps to 1.7425% + $0.10.

Other things to remember when setting up a gas station include:

  • Providing Internet protocol-enabled communications to save the merchant monthly telecom fees
  • Obtaining a WEX number, if a new one is needed
  • Including PIN debit at the pump.

One of the best methods for learning if a branded c-store is planning to become an independent station is through local oil jobbers - the petroleum suppliers. "Get an alliance going, and get a list of their unbranded stations," West said.

It's important not to tempt branded merchants with low rates, because most are contractually required to process exclusively though their brand's processor.

For more information on selling card processing services to independent gas stations, e-mail West at or call 877-251-0778.

Article published in issue number 061202

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