Tonawanda News

January 20, 2010

GAS PRICES: Some stations' deceiving signs anger motorists

By Neale Gulley<br><a href="mailto:gulleyn@gnnewspaper.com">E-mail Neale</a>

One high-priced filling station in North Tonawanda has a new weapon to confuse money-conscious customers who might otherwise debate and switch — the bait and switch.

NT Mobil at the corner of Division and Robinson streets offers drivers a sign displaying almost exactly the current fair market price for a gallon of gas, around $2.95 (and of course the standard nine tenths of a penny). Problem is, the price drivers see when they get to the pump is $3.05.

If they see it at all.

The station advertises a competitive rate to drivers moving fast along Twin City Memorial Highway, along with some ultra fine print reading: “with car wash.”

“When you think you’re pumping two dollars and whatever you’re not looking you just pump,” resident Chris Strahin said while recounting his own experience with the ploy.

Indeed, so long as they buy a car wash priced between $6 and $8, Mobil customers get roughly the same deal as those at the two closest stations.

The fine print is there for all to see, after all, providing your vision is that of an F-16 pilot. But Strahin said he had already started paying the $3.05 by the time he realized the ruse.

Even worse news for him is the fact that rate is possibly the highest in all of Western New York according to numbers posted on buffalogasprices.com.

“I looked up and it said it was $2.95 per gallon but in the little fine print it said ‘with wash.’ But you don’t see that. I almost hit the floor. I put in $5 just so I could get home. It’s a rip-off.”

Of course, there’s also the fact that residents in this area are already paying some of the highest prices in the nation.

“Price gouging is one thing without scamming people like that,” Strahin said.

The News called the gas station’s management seeking comment about their sign, but messages were not returned.

Some seasoned economists agree, that even while certain stations enjoy a lack of nearby competition leading to understandably higher prices, the tactic is dubious at best.

“Unfair practice is not what capitalism is,” economist and former University of Buffalo professor Larry Southwick said. “I’ve seen a lot of similar signs saying ‘cash only,’ ” he said. “Because most of us these days buy gas with credit.”

Southwick said from an economist’s standpoint the practice also undermines the conclusions he and his colleagues are able to draw about how much people are really willing to pay, since many are likely acting on what is essentially false information.

“The customer has been cheated. I’ll make that statement as an economist because we rely on the pricing to be accurate. The deception means an asymmetry of information, which is very problematic.”

Others like Southwick’s colleague, UB professor of Marketing Arun Jain, say they don’t recommend the tactic to businesses but recognize it is a common practice, and not illegal.

Legally, the hard-and-true price per gallon only has to be displayed above the pump.

“They’re advertising the lowest possible price,” he said, adding the use of small print is nothing new.

Strahin, however, said he’s got less beef with the NOCO at Mid-City plaza, another of the Mobil’s natural competitors to use the same tactic.

That’s because NOCO is currently selling a gallon for $2.93, no strings attached, which is below the region’s average. The $2.88 price drivers get with a $4 car wash is still what catches the eye, but Strahin takes comfort in the fact that the price without the wash could at least be called a savings when compared to the $2.95 advertised at another Mobil on Delaware Avenue near the I-290, or the Gulf on Main Street back in NT, where the sign out front says just what you’ll pay: $2.96.

During rush hour Tuesday, a steady stream of cars was nevertheless seen filling up at NT Mobil. All those the Tonawanda News interviewed said it was desperation or convenience that kept them from seeking out a lower price.

Of four people who offered their reasons for paying more, one lived just down Robinson and admitted the convenience factor was key for him and others east of TCMH. Three others were heading back from work. The commuter crowd unanimously told of a combination of “trying to get home fast” and “on empty” as reasons to make the stop.

Contact reporter Neale Gulleyat 693-1000, ext. 114.