What is a stand-alone gas station? What does ‘Pay-at-the pump purchases’ mean?

Written by
Joe Taylor Jr.
Terms apply; see the online credit card application for full terms and conditions of offers and rewards.

A “stand-alone gas station” means just that: it’s a gas station, by itself, not connected to or owned by a larger store. We hear versions of this question a lot lately. Let’s say you just received one of the best gas rebate credit cards, but your rewards points balance seems a lot smaller than you expected. That’s because your gas purchase might not look like a “gas purchase” to your credit card company’s database.

When we talk about rebates on gas purchases, we’re almost always talking about “pay-at-the-pump” purchases. That means you pull up to the pump, swipe or tap your card, and start filling up. If you venture inside a connected mini-mart and interact with a cashier, your purchase probably won’t trigger a bonus. And if your pump happens to be at a grocery store or at a discount warehouse club, you’re likely to give up some extra rewards points.

I can think of three reasons why your credit card issuer encourages you to fill your tank at a free-standing gas station:

  • Technology. When setting up a merchant account, a retailer must select a processing code that defines the type of business they’re in. That helps banks set fees and automate fraud detection activity. However, if a grocery store that also sells gas opts to register their account as a “supermarket,” your bank can’t tell the difference between 12 gallons of gas and a dozen donuts.
  • Psychology. Credit card platform providers strive for universal acceptance. If they can make you feel comfortable using credit cards for small purchases, like gas station fill-ups, you’ll feel more secure about carrying less cash. Even though retailers subsidize rebates with interchange fees, some banks are willing to pony up for bigger bonuses to serve this longer-term objectives.
  • Business. Even though studies show it’s expensive and sometimes dangerous to process lots of cash in your business, some gas station and convenience store owners have lobbied hard against the shift toward paying with plastic. Rewards credit cards with bonus gas rebates encourage consumers to fill their tanks at stations that actively welcome their business.

Regardless of your personal opinion on interchange fees and their effect on retail pricing, shopping with the best rewards credit card for your spending pattern can help you earn back any markup that gas stations or other merchants try to pass along.

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