Why does every single gas station seem to have some sort of rewards card program?
In: Economics
To keep you coming back to the same store to collect those penny rewards.
It reinforces customer loyalty by creating what is usually a false sense of savings.
These programs are very inexpensive to run and people fall for them.
If you’re disciplined and live on a routine, you might benefit from it. But most people spend the savings and more back in the convenience store.
Gas station profit margins are razor thin. Anything they can do to keep you coming back is significant to the bottom line. Rewards programs are cheap and easy ways to encourage repeat business.
for those that have their own credit card, it’s a cost savings as they don’t need to pay as much per transaction for processing. Plus with gas as a commodity, it’s an incentive for drivers to choose to fill up at their station rather than the competitor’s pumps across the street.
Because of how saturated the market is. There are *so many* gas station chains, if they didn’t have something to encourage you to keep going to one, you’d just go to the one down the street.
Loyalty cards are made to keep customers loyal.
It’s a way to build loyalty toward a commodity product… Shell wants you to seek out Shell stations, BP wants you to seek out BP stations, etc. rather than just hitting whatever one is closest when you’re low, or whichever of the 3 on the intersection might be lowest on a given day, etc.
There is a huge number of cars and especially trucks that are driven by non-owners. The company pays for the fuel, but the driver picks the station (and pays with a fuel card that is accepted by many garage chains).
The gas station is bribing the professional drivers to spend their company’s money. It’s the only thing that works because a driver doesn’t care about the fuel price and the “quality” of fuel is so strictly regulated that they are functionally the same in every pump. But give him a penny on a dollar spent and that’s just free money, why not take it?
Because any station without a rewards program is at a competitive disadvantage. The station itself doesn’t make much of any profit from the gas itself. There is too much competition for any station to raise prices and make money off the gas. Instead, the station is hoping you buy something from the store. By offering rewards points, you’re more likely to always buy gas at the same brand and thus more likely to buy other things at its station.
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