Cash rules at some pumps

Still, people have to be vigilant. Under California law, cash discounts at gas stations also must apply to debit cards, and motorists should make sure the station doesn't tack on a debit-card fee, which can run from 25 cents to 45 cents and eat into the cash-price savings. Arco is known for this, but others are joining in. Look for a warning sign when you pay.

In addition, payment systems at gas pumps can be confusing. At some machines, if the customer doesn't press the word "debit" before swiping the card, the computer will treat the payment as a credit card sale, and the driver won't get a cash discount.

Switching to cash isn't for everyone. If a cash discount isn't steep enough, Lenard said, "one of the challenges is that a customer might say, 'Big deal. I get more than that in rewards.' "

And dealers risk alienating their credit card customers, who tend to be more loyal than discount seekers. California law prohibits retailers from adding a surcharge for credit card sales but allows discounts for using cash -- and the distinction can be murky in consumers' minds.

"The marketer thinks, 'I'm going to be nice to you, I'm going to give you a discount for paying cash,' and the consumer thinks, 'Hey, they're penalizing me when I want to use my credit card,' " said Tom Robinson, chief executive of Robinson Oil Corp., owner of Rotten Robbie gas stations, which don't offer cash markdowns. "It's interesting how often that backfires."

elizabeth.douglass@latimes.com

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Price cut

What's happening? More gas stations are offering customers a discount on gasoline if they pay with cash or a debit card instead of a credit card.

What's behind it? Escalating credit card fees are eating away at station owners' profits. There are no fees on cash purchases, so dealers are able to give back some of their savings to customers through the discounts.

What's in it for motorists? They can save 3 cents to 15 cents a gallon at stations that offer the cash deals.

What are the downsides? Few sites have pump-side machines that take cash, and it's less convenient and more time-consuming to trek to the station's cashier to collect the price break. And if the station imposes a debit card fee, it cuts into the cash-price savings.

How can I find stations with cash discounts? It's not easy. There are no directories or station listings of outlets that offer cash bargains on fuel.

-- Elizabeth Douglass