Legislation

Swipe fee reform is heating up, and companies whose margins are going to be impacted, positive or negative, are weighing in. As reported in CSP’s Durbin on Interchange Fees, “Nearly $50 billion in interchange fees were charged by credit and debit card networks in 2008.” Of this, $8.4 billion in swipe fees were paid by convenience stores. The impact of the Durbin Act is obvious. As I recently drove around the Bay Area in California, most stations already listed two prices: $3.08 for credit cards, $3.00 for cash - which translates into a direct markup to cover the high costs of swipe fees. Swipe fee reform could offer needed margins to a business that is experiencing increasingly tight margins due to tax changes and competition.

In addition to swipe fee reform, there are many tax proposals on the table which range from county taxes and changed tax rules and rates to cap and trade, which NACS estimates will increase gas prices by 77 cents per gallon. This is a 25 to 30% increase in fuel prices which will squeeze retain fuel margins similar to 2007’s spike in fuel prices.

Energy Policy

Is it E10, E12, E15, or some other blended number? The U.S. ethanol industry is awaiting a decision by the EPA as to whether or not it will increase ethanol blend allowances from 10 percent to 15 percent, which would stimulate domestic levels. In the meantime, some have urged the EPA to approve a 12 percent blend to provide immediate market relief. I’m not sure what this will relieve the market of but I am sure increasing demand will impact supply and prices.

We all know that the days of painting prices on a sign are gone. And, the question you now need to ask yourself is “What have you changed since the calm fuel markets of the 1990s?” Hopefully, one answer includes new tools to manage street price processes and control fuel costs because there are more significant changes on the horizon. And, in the words of legendary basketball coach John Wooden, “Failure to prepare is preparing to fail.”