PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Shell Lawsuit Asks: Is a Gift Card the Same as Cash?

By Tom Nawrocki
January 19, 2024
in Analysts Coverage, Debit, Gift Cards, Prepaid
0
0
SHARES
0
VIEWS
Share on LinkedIn
Gasoline Prices: Credit Cards, Future of Fuel and Fleet Cards

Rising Gasoline Prices: Bad for Consumers, Good for Credit Cards

Shell is facing a class action lawsuit in California, alleging its gas stations have charged customers using a prepaid Shell gift card the credit card price instead of the cash price. What the suit really asks is, are prepaid cards more akin to cash, or more akin to credit cards?

It is understandable that consumers might not see any difference between a gift card and cash. The California civil code requires that any gift card sold after January 1, 1997, can be redeemed for its cash value—and the law also stipulates that a gift card cannot contain a service fee.  California also requires that a gift certificate with a cash value of less than $10 is redeemable for cash.

Given that, the lawsuit claims that gift cards should be valid for the cash price at Shell gas stations. But the extra charges that some gas stations incur aren’t result of the “credit” part of the equation. They’re a result of the “card” part.

Swiping any type of card, whether it’s credit debit or prepaid, will always cost merchants extra. The cash discount arises from merchants trying to avoid those interchange fees. While the fees may be lower for debit or prepaid transactions, the station still has to pay them.

Other States Have Made This Clear

Other states have dealt with this issue more directly than California has. New Jersey law, for instance, states that a “retail dealer may sell similar fuels at different prices to cash and credit customers.” It also requires a “conspicuous sign … posting the price per gallon (or per gallon and per liter) reduction for cash purchases of fuels.”

A spokesperson for New Jersey Consumer Affairs clarified this practice to a reporter for NJ. Com. “Retailers often do not distinguish between debit or credit card purchases due to similar transactional processing fees, and therefore charge the credit card price on all such transactions,” she said. “N.J.A.C. 18:19-2.7 does not prohibit that practice.”

On the other hand, gas stations may benefit from a little sleight of hand in this area. Researchers have long known that issuers tend to see greater sales in stores where gift card purchases are eligible for rewards programs. In the specific case of Shell, holders of their credit cards also earn an immediate discount at the pump.

Customers may perceive that the stations are encouraging them to use gift cards, as opposed to cash. And given the consumer-friendly regulatory environment in California, it’s impossible to say the suit will fail. In the meantime, though, retailers that offer discounts for cash may wish to emphasize that it’s not credit cards that cost more—it’s cards of any kind.

0
SHARES
0
VIEWS
Share on LinkedIn
Tags: CreditDebitGift CardsPrepaidShell

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    global cross-border payment infrastructure

    A New Payment Rail Is Not a Global Payment Solution

    October 23, 2026
    stablecoins in banking

    As Stablecoins Mature, Financial Institutions Face a Crossroads

    October 22, 2026

    Automation to Accountability: Governing AI in Fraud and Disputes 

    October 21, 2026
    google solana agentic

    Agentic Commerce Is Still Hype Ahead of Reality

    October 20, 2026
    Customer, shopping and credit card for florist shop payment with POS machine or phone for sale of flowers at small business. Hands of woman paying with rfid technology for service at retail store.

    As Rewards Programs Face Pressure, Card-Linked Offers Gain Ground

    October 19, 2026
    ai spend

    Escalating AI Spend Is Prompting a Strategic Recalibration

    October 16, 2026
    bank chatbot

    How Banks Can Nail the Handoff from Chatbots to Human Agents

    October 15, 2026
    diagonal payments solutions

    The Next Evolution in Payments: Diagonal Thinking

    October 14, 2026

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2026 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result