The Senate commerce committee on Monday unanimously voted in favor of allowing gasoline companies to offer rebates to customers in New Jersey. It now awaits its chance before the full Senate, which could come Dec. 15.
The measure would allow consumers to earn gasoline credits through purchases on a credit, debit or rewards card to receive rebates on the purchase of motor fuels.
“We want to see this happen,” said Scott Ross, associate director of the New Jersey Petroleum Council. “Anything we can do to help ease the burden on our consumers, we are willing to do. With food and gas prices racing each other to the top, it would be good if one can help the other.”
Ross said that about 40 states already allow gasoline rebates, but New Jersey has banned the program for about 60 years.
“I don’t know why,” he said. “Why don’t we have self service, either? That’s just the way it is.”
Under such a system, food and retail establishments can partner with a gas retailer to offer rebate programs through their rewards cards, and customers can accrue points that can be used for discounts at a particular gas station.
One example is Stop & Shop, which partners with Shell gasoline to offer gas rewards in Massachusetts, Connecticut, Rhode Island, New Hampshire and New York. Customers earn one point for every dollar they spend at Stop & Shop on qualifying purchases, and for every $100 they spend, they get 10 cents off per gallon at participating Shell gas stations. The program has been unavailable in New Jersey because of state restrictions.
The New Jersey Gasoline Convenience Store Automotive Association has fought against the bill in the past, believing it would result in large gas companies and big-box retailers, like Walmart and Costco, selling gas below cost.
Once they drive nearby independent service stations out of business, they often raise the cost of the gas much higher, said Sal Risalvato, executive director of the NJGCA. Risalvato said he saw this firsthand when the gas station he owned for 23 years was slowly driven out of business in a similar fashion.
“This legislation has been introduced in various forms over the past four or five years,” he said “It took quite a while, but we worked out a compromise with the New Jersey Food Council. It allows the promotions as long as it does not result in gas being sold below cost. A lot of gas stations sell for four or five cents above cost. It’s hard to find a place that makes 10 cents a gallon.”
Risalvato said he will encourage his organization’s members to be enterprising, working out customer loyalty programs with smaller businesses, such as car washes, as well as grocery stores.
“It’s like if you spend $300 at Shop-Rite and you get a free turkey,” he said. “Forget the turkey. Here’s a free $10 gas card. The supermarket pays for the reward, and the gas is not sold below cost.”
