ORnews@observer-reporter.com

Consumers aren't the only ones feeling the crunch of rising gas prices. Gas station owners are as well.

And it isn't the oil tycoons cutting their profit margin, it's credit card companies. With gas prices now at more than $4 a gallon, credit card transaction fees cut owners' profits, or even eliminate them.

Some stations nationwide are eliminating credit cards, only permitting customers to pay in cash, but in the Washington area, owners are hesitant to take such action.

Most local stations are making 6 to 10 cents per gallon of gas purchased. But after a 2 to 3 percent charge on the sale price is paid to credit card companies on every transaction, plus a processing fee, the profit shrinks.

"You're in the hole," said Nicholas Dragich, owner of Nick's Service Station and Sunoco in Washington.

The National Retail Federation, the world's largest retail trade association, said gas prices point to the unfairness of the system: Gas stations are paying more in credit card fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same, according to the Associated Press.

"We have always contended that it doesn't cost Visa and Master Card any more to process a $1,000 transaction than it does a $100 transaction," J. Craig Shearman, vice president of government affairs at the NRF, told the AP.

"Anyone gives you a credit card to pay for their gas, (and) we're paying for it," Dragich said.

"Everyone's mad at the oil companies (for gas prices) and then taking it out on the dealer," he said. "What people don't realize is the dealers haven't been making money."

The National Association of Convenience Stores, a trade association that represents convenience and petroleum retailers, reports about two-thirds of transactions at gas stations are with credit or debit cards. Credit card fees are the second-largest expense at the store level. Only labor costs are more.

"I don't care how much gas you bought, I just went in the hole," Dragich said. "When the credit card company is making more than the owner, it's a rip-off."

What retailers make on gasoline is a dollar-based value vs. a percentage that goes to credit card companies, Rich Russo of Russo's Sunoco in Canonsburg explained.

About 60 percent of Russo's customers pay with credit cards, which resulted in a staggering $4,000 in credit card fees last month.

But he said he wouldn't eliminate credit cards at his station, especially with fill-ups costing $60 or more.

"The problem is that people don't have that much disposable cash in their pockets," Russo said.

Charlie Stewart, who owns Arrowhead Service Station in Houston, is considering eliminating credit card payments.

"If gas continues to go up, within a couple weeks I'm sure we'll use cash only," he said.

For his small service station, he paid almost $600 in fees last month.

If he did make the switch, Stewart figures he would lose some customers.

"Our whole society is going to charge cards," he said.

Stewart has an auto repair shop at his station but not a convenience store, which he thinks is saving some owners from financial woes.

"That's where other people have us beat. Tastykakes are marked up to the sky: That's where they're making money," he said.

Bob Beard, owner of Beard's Auto in Washington has considered eliminating credit cards, but that's about it.

"Right now, I'm trying to hold off," he said.

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