Wal-Mart's gas scam

Dean

Dean

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Dean
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
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In WI, it's illegal for them to change less than 24 hours since the last change, which effectively prevents this type of scam. Recently there was a story about a station where someone screwed up and set a new price to well below cost - The station ended up having to shut off the pumps until the next day!
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
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If it is legal to do how can it be a scam? Besides if you don't buy your gas in the morning then just buy it somewhere else in the afternoon.
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
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I don't get it. How is a business setting its prices, without forcing you to buy from them, a scam?
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
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As a road warrior, I see and fell your pain in CT. It's a free market and
they can change, modify, adjust there numbers as they see fit. I do my homework on-line to find the "best" deal fuel prices and shop those vendors.
 
Perhaps not a scam, but I'd call it unethical. On the way to work you drive by the station in the morning noting the price. On your way home from work you drive by other stations only to find the price at Murphy's higher.

Is there a good reason for having a higher price in the afternoon?
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
Click to expand...

Not just WM, either... my wife commented on this very thing when we got home last night. Saw the price change several days in a row at another major chain, from morning to afternoon.
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
Click to expand...

Bob Noel said:
Perhaps not a scam, but I'd call it unethical. On the way to work you drive by the station in the morning noting the price. On your way home from work you drive by other stations only to find the price at Murphy's higher.

Is there a good reason for having a higher price in the afternoon?
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First lets pick a little nit. The OP did NOT say which price was higher. Most posting have assumed the worst. What if they are in fact lowering the price in the morning?
 
Supply and demand. Perhaps more people stop on their way home from work than on their way to work. Demand being higher in the afternoon, it would make sense for the price to be higher too.

Think of it this way. They have to staff the station the entire time that it's open. So, if by doing this, they encourage more people to buy in the mornings, they even out the workload of the employees. If not, they are compensated for having to work more in the afternoon.

Provided they are selling gas for the price advertised, I see nothing unethical, immoral or fattening with this practice, and certainly wouldn't call it a scam.
 
sba55 said:
I don't get it. How is a business setting its prices, without forcing you to buy from them, a scam?
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I'm with ya.

The electric utilities and regulators want to do demand pricing, too, charging more in peak time so consumers do washing at night, etc. In that case they want to limit peak demand because they have to build power plants to meet it. I think that would only work if the folks at home could see in real time what the juice is costing, which is probably the last thing the utility would want.

You can be sure that Wal-Mart is very much on top of what profits they can make by changing pricing during the day. They've had the leading IT technology and data gathering for years. I saw the Wal-Mart CEO in TV saying they can track and tell that customers buy bigger boxes of diapers right after payday and buy just enough to get by before the next paycheck.

I wouldn't be surprised if Wal-Mart sets the price on the pump and the sign out front directly from Bentonville, AR.

I while back I bought some gas at a Shell late at night and was surprised that the pump price was 10 cents a gallon less than the price on the sign. I told the attendant in the store. He said they don't set the prices on either. That, price difference BTW, is illegal in Illinois.
 
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While all the Murphy locations are located at Walmart and Sam's Club, they are wholly owned by Murphy Oil. It's an exclusive contract, probably buddies of a Walmart executive a decade ago when they started. Either way, it would be improper to blame Walmart for another entities operation.
 
I don't get what the problem is with this. It's a scam if the sign out front says one price and the pump charges you more (I won't complain if it charges me less). Otherwise, what's the problem? If you don't like it, go buy your gas somewhere else.
 
I think it should be about fairness and responsibility.
If the station buy's their gas for $2.00 a gal.,mark it up .20 a gal,sell it till that load is gone, fine.
But this demand stuff is ridiculous. I've seen the price change 3 times in one day and I'm sure they have not gotten in new inventory at a different price.
We sell products that we buy in bulk, we don't change pricing unless the next load goes up or down,IMHO the only fair way to do it.
Scam ,probably not, but down the same path of business ethics wall street has gone.
 
Why do you think you should not be allowed to receive a discount for purchasing during off-peak hours? And what does their cost have to do with it?

Do you think it is unethical for a restaurant to offer an early-diners special for people who come in before 6:00? Their food cost is the same regardless of when you eat.

Are bars offering a 'happy hour' unethical for lowering their price to get you in the door before the place gets busy? The rum costs them the same amount regardless of when you drink it.

Is it unethical for a beachfront hotel to lower their rates in the off-season to try to fill up their rooms?

The only entities that need to have prices controlled based on costs are those where government has created monopolies protected from competition, like public utilities. Otherwise, competition creates wonderful things... like discounts for buying your gasoline in the morning!
 
If they're not doing any business in the morning, their cost-per-gallon sold is actually higher duing those times, because they're still paying staff and other fixed costs, while not making any sales.

I commend them for knowing their market well enough that they can make such fine adjustments. That takes some serious thought about when you have customers, and trying to spread out your sales throughout your working period.
 
mikea said:
I'm with ya.

The electric utilities and regulators want to do demand pricing, too, charging more in peak time so consumers do washing at night, etc. In that case they want to limit peak demand because they have to built power plants to meet it. I think that would only work if the folks at home could see in real tiem what the juice is costing, which is probably the last thing the utility would want.

You can be sure that Wal-Mart is very much on top of what profits they can make by changing pricing during the day. They've had the leading IT technology and data gathering for years. I saw the Wal-Mart CEO in TV saying they can track and tell that customers buy bigger boxes of diapers right after payday and buy just enough to get by before the next paycheck.

I wouldn't be surprised if Wal-Mart sets the price on the pump and the sign out front directly from Bentonville, AR.

I while back I bought some gas at a Shell late at night and was surprised that the pump price was 10 cents a gallon less than the price on the sign. I told the attendant in the store. He said they don't set the prices on either. That, price difference BTW, is illegal in Illinois.
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Actually show consumer the price of electricity on a moment by moment basis is all part of the smart grid process. GE is working on this as well as some others. It's part of the push to get consumer to use less peak demand power so they don't have to build more plants just for peak. Perhaps a better solution would be a better storage method so you could have power in reserve but I fear that is a much more difficult problem to solve, it's much easier to reduce demand by increasing price.
 
Dean said:
I travel all over the state of Missouri and have noticed the Murphy Gas Stations at Wal-Mart have a little scam going. The morning price for gas is .07-.10 cents a gallon different from the afternoon price. I first thought this was just a coincidence, so I started keeping track of it. This is an every day price change. I have noticed that the afternoon price changes at 3:00 PM and you can just about set your watch by it. And this is not at just an isolated station, I have tracked this to 8 stations in SW Missouri.
Click to expand...

So how is it a scam?
 
Bob Noel said:
Perhaps not a scam, but I'd call it unethical. On the way to work you drive by the station in the morning noting the price. On your way home from work you drive by other stations only to find the price at Murphy's higher.

Is there a good reason for having a higher price in the afternoon?
Click to expand...

I can't think of a good reason for higher prices in the afternoon, but I don't see anything unethical about it. If the prices are clearly posted and the price charged is the posted price, what's the problem?
 
Kelvin said:
First lets pick a little nit. The OP did NOT say which price was higher. Most posting have assumed the worst. What if they are in fact lowering the price in the morning?
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Other stations in the area are priced at the Murphy's afternoon price all the time, the morning price is higher than the others. The station is a big seller of cigarettes and people stop to get there daily supply. After the morning rush, they lower the price back down to the other stations prices. Just seems that they are taking advantage of the morning rush to make a little extra money.
 
Dean said:
Other stations in the area are priced at the Murphy's afternoon price all the time, the morning price is higher than the others. The station is a big seller of cigarettes and people stop to get there daily supply. After the morning rush, they lower the price back down to the other stations prices. Just seems that they are taking advantage of the morning rush to make a little extra money.
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Sounds like they've found a way to make money. Can't blame them for that. Until they quit making money on it, they will continue to do so. Consumers drive the market. Until consumers change their habits, business will continue to act in a way to maximize profit. Sounds like a good use of marketing and point-of-sale information. If you (collective 'you') think the gas station is the only one that does this, you're sadly mistaken - it's just more obvious in the gas market because everyone is sensitive to its prices recently.

Any retailer that is worth their salt has the ability to do this type of price adjusting based on market demand - the only problem is that most retail items don't have the ability to adjust price so quickly/easily as gas.
 
fgcason said:
Isn't that mindset how we ended up with $5+/gallon gas last summer?
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In a way, yes. Consumers continued to pay that price, so why wouldn't the company continue to sell at that price? When consumers changed their consumption habits and demand decreased, the price dropped. Now that people are starting to forget the tricks they learned last year, prices are starting to go back up. You can blame the companies all you want, but they will continue to charge a price that consumers are willing to pay.

Anyone for $6-7/gallon this year?
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If consumer demand spikes again, I could see it happening easily. Consumers set the price more than the companies selling the product.
 
fgcason said:
Isn't that mindset how we ended up with $5+/gallon gas last summer?

Anyone for $6-7/gallon this year?
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There were other reasons behind those prices that were out of the control of the gas station owners. If some station raised their prices to $5/gallon today no one would buy gas there.
 
fgcason said:
Isn't that mindset how we ended up with $5+/gallon gas last summer?

Anyone for $6-7/gallon this year?
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No, it isn't. If anything, regulation (OPEC) and semi-monopolies, combined with lower supply, led to the rise in prices. The demand for gasoline, like many other goods for which no real alternative exists, is very inelastic (demand changes less than price).

Markets work when consumers are self-interested and rational. If one station is charging more, go to the other one. You're creating less demand at the first station, and they will lower their prices.

-Felix
 
It would only be a scam if the prices on the pumps did not match the advertised price. I change MY prices all the time. If i am very busy and you want it NOW the price goes up. what is unethical or a scam about that. If they raise & lower prices based on demand.... I would call it , capitalism. DaveR
 
sba55 said:
No, it isn't. If anything, regulation (OPEC) and semi-monopolies, combined with lower supply, led to the rise in prices. The demand for gasoline, like many other goods for which no real alternative exists, is very inelastic (demand changes less than price).

Markets work when consumers are self-interested and rational. If one station is charging more, go to the other one. You're creating less demand at the first station, and they will lower their prices.

-Felix
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But how much of OPEC's supply-fixing was/is based on consumer demand? If they know that the crazy Americans will pay $5/gallon for refined gasoline, they will adjust the price of crude oil until the refining companies' business model (based on price of crude oil) puts the price at $5/gallon. Once the price really did hit $5/gal, the crazy Americans realized they couldn't afford to pay that much for an extended period of time, and the money supply dried up. OPEC saw a decrease in demand, so they had to adjust their price structure to reach a price point that allowed Americans to maintain their consumption.

I agree that there are a lot of 'external' influences on gas prices, but isn't it eventually influenced by consumer demand?
 
Dean said:
OK, Maybe I shouldn't call it a scam, more of unethical business practice.
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I tend to disagree with you completely. Its their business, so they can do what they want with how they run it. If what they are doing is not legal that is a different story then. If it is legal and you don't like it then go somewhere else to get your gas.

I charge different prices to people when I give flight instruction. Does that make the way I charge unethical? I tend to charge people who are renters a little less. Especially if I know they are working towards a career as a pilot. I tend to charge people that own their own airplanes more. For one people that own their own airplanes are normally a real pain to deal with. many are out there on their own and come up with some very non traditional was of operating. They also tend to have weird ego related issues to have to work with. They are also the ones that will call you at 4:30 AM to ask your opinion on the weather. There are a lot good owners but there are some really bad ones too. So if my job becomes harder I expect the pay reflect my efforts.
 
CJones said:
But how much of OPEC's supply-fixing was/is based on consumer demand?
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Not that much. Also, the various OPEC members have different objectives. Those with a large supply of oil are looking at long term market viability. They're interested in a price that's not too high because they don't want to encourage the development of alternatives. Countries with relatively small oil reserves are more interested in selling what they have for the highest possible price right now.

CJones said:
If they know that the crazy Americans will pay $5/gallon for refined gasoline, they will adjust the price of crude oil until the refining companies' business model (based on price of crude oil) puts the price at $5/gallon. Once the price really did hit $5/gal, the crazy Americans realized they couldn't afford to pay that much for an extended period of time, and the money supply dried up. OPEC saw a decrease in demand, so they had to adjust their price structure to reach a price point that allowed Americans to maintain their consumption.
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On the other hand, they do not want to make oil too expensive (see above). Also, they do have to stay competitive. OPEC accounts for 33% of worldwide oil supply.

Lastly, OPEC has always had problems with "cheating". Countries will often decide that the OPEC-price isn't in their best interest and they will find ways to sell oil at a difference price, thus undermining OPEC.

CJones said:
I agree that there are a lot of 'external' influences on gas prices, but isn't it eventually influenced by consumer demand?
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Yes. But since it's such an inelastic good, demand has less influence on price. The demand could be small, but I could still sell at $150/barrel because there aren't any real alternatives.

-Felix
 
el con said:
I think it should be about fairness and responsibility. If the station buy's their gas for $2.00 a gal.,mark it up .20 a gal,sell it till that load is gone, fine. But this demand stuff is ridiculous.
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Yeah, they tried that economic model for a few decades across the pond. Didn't work out so well. :)

We sell products that we buy in bulk, we don't change pricing unless the next load goes up or down,IMHO the only fair way to do it.
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Your business, your choice. Market pricing may garner a bit more profit, though. The market generally settles on a fair price.
 
Given that we're airplane folks, I'm surprised no one has brought up the ultimate in elastic pricing, the airline seat! Those can vary in cost from one minute to the next, depending on more factors than I can even consider! I've always found it rather Byzantine and don't particularly like it, but it isn't illegal! Heck, it would be legal for a gas station to charge a gas price based on how expensive your car is, how long it's been since you last filled up with them, what your average purchase is, and how much gas you have left in the tank! It just wouldn't be very practical!

Around here, we have a number of grocery stores that are tying fuel discounts to the amount you've spent on groceries using their loyalty cards. One will give you a penny off per gallon for every $10 you buy in groceries, up to something like $1.50 off per gallon, and the discounts are cumulative over time. They max it at 15 gallons, so their maximum cost would be $22.50, after you've spent $1500 on groceries. Their max cost is 1.5% of your grocery purchase.
 
el con said:
I think it should be about fairness and responsibility.
If the station buy's their gas for $2.00 a gal.,mark it up .20 a gal,sell it till that load is gone, fine.
But this demand stuff is ridiculous. I've seen the price change 3 times in one day and I'm sure they have not gotten in new inventory at a different price.
We sell products that we buy in bulk, we don't change pricing unless the next load goes up or down,IMHO the only fair way to do it.
Scam ,probably not, but down the same path of business ethics wall street has gone.
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You don't understand how this market works. It's not even about supply and demand when it comes to the issues you're talking about.

It's simple - behave rationally in any market. That's how capitalism works. If I were to charge you $500/gallon, and you paid for that, you have violated your responsibilities as a customer. I didn't force you to buy from me, and there isn't anything unethical about maximizing profits.

Btw., the reason why prices change 3x a day has nothing to do with "markups." Gasoline is traded based n expectations. If I expect the price to go up, I'm going to raise prices. You don't have to buy from me...
 
sba55 said:
Btw., the reason why prices change 3x a day has nothing to do with "markups." Gasoline is traded based n expectations. If I expect the price to go up, I'm going to raise prices. You don't have to buy from me...
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But look at how much everyone HATES the way the gas stations mark their prices up as soon as someone so much as talks about how the price of CRUDE oil MIGHT go up. There's a chain of stations here that did not follow suit, for a while at least, but it appears that not enough people noticed that (and they didn't market it) so now they're doing the same crap everyone else does.

The problem with "the market" is that people are dumb.
 
Is this a scam?
A local station does not advertise their price. You can't even find out when you drive up to the pump, its just not displayed. You can't even ask anyone for it, they don't know! The ONLY way to find out the price is to pump some gas!!!!! You could pump a gallon and then terminate the transaction to see what it is....I am waiting for the day when it is $1000.00 per gallon and I don't find out til the gallon is in my tank!
 
Let'sgoflying! said:
Is this a scam?
A local station does not advertise their price. You can't even find out when you drive up to the pump, its just not displayed. You can't even ask anyone for it, they don't know! The ONLY way to find out the price is to pump some gas!!!!! You could pump a gallon and then terminate the transaction to see what it is....I am waiting for the day when it is $1000.00 per gallon and I don't find out til the gallon is in my tank!
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I think I would go across the street, fill up, and then tell them I needed to de-fuel. :D
 
Let'sgoflying! said:
Is this a scam?
A local station does not advertise their price. You can't even find out when you drive up to the pump, its just not displayed. You can't even ask anyone for it, they don't know! The ONLY way to find out the price is to pump some gas!!!!! You could pump a gallon and then terminate the transaction to see what it is....I am waiting for the day when it is $1000.00 per gallon and I don't find out til the gallon is in my tank!
Click to expand...

In Virginia, it would be illegal - the pump must display the price per gallon before activation. I've never seen a pump without a price-per-gallon display.
 
flyingcheesehead said:
But look at how much everyone HATES the way the gas stations mark their prices up as soon as someone so much as talks about how the price of CRUDE oil MIGHT go up. There's a chain of stations here that did not follow suit, for a while at least, but it appears that not enough people noticed that (and they didn't market it) so now they're doing the same crap everyone else does.
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So, go somewhere else if you don't like how they do it. I don't understand why people want to complain about how a business chooses to do its cost structure within the confines of the law, but then goes ahead and gives that business money.

It's very simple. I have money. I can spend it at multiple places. If I don't like the way one place operates, I will spend my money elsewhere. What is so difficult about this? If I'm a business owner, my job is to make money for myself and for my business. If I can figure out a way to do that while maintaining business and respecting laws, I'll do it. Now I will try to be sensitive to what my customers want, but if I don't, then they'll go elsewhere and then that's my problem since I don't get the business. In the businesses I've run, I kept customer service as #1 priority. That's why I would get lots of repeat business.
 
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