Station Owners Say Prepay Siphons Sales

Some retailers in Coon Rapids, Minnesota, want to reverse a city ordinance that requires customers to prepay before they fill up.

February 08, 2013

COON RAPIDS, Minn. - Law enforcement officials hail the city ordinance that requires prepayment at gasoline station pumps, but some retailers have found a drop in sales because of it, the Minneapolis Star Tribune reports.

The city enacted the ordinance six months ago to help stop drive-offs, which police said rose to close to 500 annually. However, gasoline station owners have experienced a significant decline in sales both at the pump and in the store, and are now lobbying the council to look into the ordinance.

The Coon Rapids ordinance is the first prepay one in Minnesota. "The ordinance has been pretty devastating," said Stephen Linn, CEO of the Linn Companies, which runs a Holiday station. "It's been devastating to our customers. It's been a significant inconvenience to them. ...We've seen a significant percentage decrease [double-digits] in customer counts, gasoline sales volume and inside sales volume."

While more than 80% of his customers pay by credit card for gasoline, 40% went inside the store to pay for that fuel, and picked up other items. While some still come inside the store, it costs him more money because he has to process two transaction fees. "If you have two transactions, you pay two transaction fees," Linn said.

The City Council will review the ordinance during a March 20 council workshop. "It sounds like there is momentum to take a look at it and revise it or repeal it," said Lori Higgins, president of the MetroNorth Chamber of Commerce. The chamber is against the ordinance.

Advertisement
Advertisement
Advertisement