We All Know What Fees Are
Fees are when a company establishes, and then charges a sum of money, for a service. And they exist, because customers will pay them – especially, when they are unaware, or, out of options. But the borderland of the fuel card industry has been expanded, and a growing number of small business owners and contractors now demand, better fuel rates.
Fee is a hackneyed word for charging more money above an alluring advertised rate.
When it comes to buying fuel you're either paying “retail-minus” or “cost-plus” to fill your vehicles. Do you know the difference and how they are determined? This is important to know, especially when weighing your options between, fuel cards vs gas cards ,and wholesale rates vs discounts off, retail prices.
What does this mean to you?
For example; your neighbor, Bob commutes to work in his own car each day. Bob probably enjoys low retail gas rates at a membership, warehouse store, like Costco. Or, maybe, he earns discounts from his credit cards. He may even, use loyalty discounts from a grocery store chain. Even still, Bob may have signed up for a gas card, and always fuels at their chain of gas stations. Bob pays the cost of fuel, taxes, and the additional margin taken by the retail station. He gets discounts and pays, “retail-minus” for his fuel.
Now, let's consider your professional competition. Both, John's Transport and Sal's Excavating Service use fleet fuel cards. Both businesses, pay a wholesale or 'rack' cost of fuel, taxes, and a fixed rate. They both pay the lower, “cost-plus” fuel rate – maybe.
You DON'T always get what you pay for.
Just like, the varying qualities of brand name gasoline, not all retail and fuel card rates, are the same. And, not all fueling locations are the same. Let's go back to your neighbor, Bob, for a moment. That membership warehouse store, may charge, a lower retail margin, above the cost of their fuel. And, it might even, give Bob a deeper discount at the pump, than his credit card, gas card, or grocery store.
Meanwhile, John and Sal still pay lower rates at the pump than Bob. They can fuel at wholesale network locations with faster service, shorter lines and wholesale rates. John's fuel card has a lower fixed rate than Sal's, because his fleet consumes more fuel each month. Sal gets access to some of the fleet card benefits, but not the bulk fuel rate. But, when John applied for his fuel card, he needed to apply for a universal fuel card that was co-branded - with a major credit card to gain approval. Later, John borrowed against that credit, to buy a new truck, and now transports nationally. They both use national fuel site networks. But, John's network is significantly smaller than Sal's network.
John's not worried, that his network is smaller than Sal's, because his credit backed fuel card, allows his growing team of drivers to stay close to their routes. They can easily go out of network for the same low rate, as long as, they use their fuel cards.
Meanwhile, Sal pays a few more cents per gallon of gas than John, but enjoys a vast national network of locations. Sal doesn't need to veer off of her routes, just to fuel her trucks and equipment.
At this point, you may be thinking... I have a corporate fuel card with great rebates. I don't think this affects me. Stick around.
What's the one thing that Bob, John and Sal all have in common?
You guessed it. That “F” word, again. All three pay fees for convenience, and extra service - whether they know it or not. We like the idea, of Bob getting a nice fuel discount at a warehouse store. But, Bob's Annual Membership fee, might make it a wash, in the long-run. And, if Bob is using a warehouse Credit Card, and doesn't pay his balance each month - he'll probably need to add up his additional monthly fees, and any additional service fees that apply. The same fees probably apply, if Bob uses a a major chain gas card, like Shell or Chevron. I'm starting to like Bob's grocery store, earned gas discounts more... Bob needs to buy groceries, right? And, he earns points toward his fuel discount, every time he shops. But, what do we know about the quality of that gas? Or, whether a discount gas station, just around the corner, offers a lower cash discount price, than the grocery store chain. How does all of this affect you? Bob's example, will undoubtedly be similar to your story, when fueling your personal SUV for a weekend road trip, or simply driving to and from soccer practice.
In Bob's case, his best bet for finding the lowest retail gas prices, without additional fees, might be to scout out the best deal of the day using a site like Gas Buddy, and purchase his fuel with cash.
How about John, with his growing national fleet? Even with fees, surely, he's still coming out ahead of the game. Maybe. Annually, John pays four times what Sal pays, in fueling related fees. Not only, is John paying monthly fees on the loan from his credit card company, he's paying monthly charge card fees, because he doesn't pay his full balance monthly. And, every time one of his drivers goes out of his small network, John pays a transaction fee, to his fuel card company.
Finally, John has less control over slippage and unauthorized purchasing, when his drivers fuel out of network. These aren't fees. But, they are expenses, that John may have to pay, just to enjoy the convenience and flexibility, of a combination fuel and credit card, that can be used most anywhere.
Sal, thinks she's doing much better than John right now. And, maybe she's correct. However, there are additional fees that both John and Sal may be incurring each month. Sometimes, fuel card companies will provide fuel management software, and sometimes, that software comes with a monthly usage fee. You may even have to pay extra, just to access, and customize, fuel card usage controls. And, that may not be the only one... Sometimes, there are fees, just to retrieve data about card usage. Both, Sal and John, may also be paying extra fees for ,copies of receipts, invoices, monthly statements, annual tax, and custom reports.
If it walks like a duck and quacks like a duck... It's a duck.
There are some universal fuel cards and corporate fuel cards available, that offer all of the bells and whistles, tools, service discounts, and a vast fueling network. Yay! But... One thing, makes them different - than a fleet fuel card. They offer rebates and discounts. What's that new term you just learned? “Retail-minus” fuel rates. What's a few cents, right? Sure. What's a few fees, too? And, what are program fees, anyway?? When you're tracking your expenses, or shopping around, these are good terms to know. Because, it all adds up to one thing. How much are you REALLY paying, at the pump?
There is still power in numbers, but guess who's got the power?
As, more and more, innovative car and delivery services, take to the streets - the sheer number alone - is compelling fuel card providers, to find new ways, to get their business. Although, the benefits and services being offered are more restricted, than those of larger fleets, most drivers are content just gaining access to wholesale fueling sites. Even if, drivers do have to pay a few cents more, per gallon, and extra fees for certain services - they're thrilled with, what they perceive as, “cost-plus” fuel rates. But ,is this still enough? At energie·fuel, we don't think so. We're doing more.
You better shop around.
We began energie·fuel because we believe, that knowledge is power. And, our fee-fed-up members agree. Fleets of all sizes, including contractors, enjoy the same wholesale fuel rates, network, access, free software, full benefits, and 365/24/7 membership service. We're very proud to tell you – you won't find ALL of our services, with another national fuel provider.