Spotted on the Gas Pump at the Local Texaco
By Bryan Caplan
1. A big sign saying that due to the increase in “drive-offs,” customers using cash now have to pay in advance.
2. A big sign telling customers that the station will soon adopt a discount for cash (and the Texaco credit card).
It’s easy to see why high gas prices have increased drive-offs. But can you figure out why high gas prices also lead to cash discounts? (Hint: Credit card companies charge a percentage of every transaction).