The D.C. Office of Consumer Protection has reached an agreement with a Northeast service station owner to refund money to customers who were charged an extra five cents per gallon of gasoline for using credit cards.
The surcharge, levied from shortly after Memorial Day until two weeks ago by the People's Amoco service station at Rhode Island and Eastern avenues NE, violated D.C. and federal laws that make it illegal for an extra cost to be added to an already established price, city officials said.
Under an agreement made public yesterday, station owner Mike Greenberg is required to inform his credit card customers by mail that, with a receipt, they can obtain a refund of the surcharge by showing up at the station within 60 days, city officials and Greenberg said yesterday. Greenberg said he had no idea how many people may be affected.
He said yesterday that he began charging credit card users an extra five cents per gallon to compensate for the commission he must pay to the American Oil Company for accepting credit cards, and that he was unaware that he was doing anything improper. Had he offered a discount from posted prices for cash purchases, he would not have run afoul of regulations, according to an attorney for the city.
The commission Greenberg and other Amoco service station owners must pay to oil companies is part of a trend in the oil industry that encourages cash use to offset the cost of processing credit cards.
Texaco Inc. has been imposing a 3 percent fee on Maryland station owners for credit card use since last November. Last month, a Maryland circuit court judge temporarily blocked legislation that would prevent corporations from passing on credit card processing fees to service station owners.
Greenberg's practice was discovered by the director of the D.C. Office of Consumer Protection, Herbert Simmons.
Simmons said he tried to charge some gas at the Rhode Island station on Saturday, June 26, when an attendent informed him of the surcharge. The following Tuesday, Simmons filed a consumer complaint in his office. "It shocked me that somebody would be doing it," Simmons said.
Simmons has already received his refund. "They gave it to me the same day of the settlement," he said.
The amount? One dollar.