Tonawanda News

Business

January 20, 2010

GAS PRICES: Some stations' deceiving signs anger motorists

(Continued)



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.

Text Only
Business