Grocery-store Gasoline Discounts: Deal or No Deal?

At  Planting Our Pennies, Mrs. PoP reflects on grocery-store offers of gasoline discounts that grocery stores sometimes offer regular customers. Ultimately she concludes that these programs are hardly worth the effort.

Here in lovely uptown Phoenix, Safeway stores offer a gasoline discount after you’ve racked up some crazy number of dollars on purchased registered with the annoying red card. So every once in a while, they’ll offer my deceased dog (in whose name the card is made out) cents off on gas.

Problem: the nearest Safeway with gas pumps is way to hell and gone up on the north side! Safeway has reserved its shiniest new stores, the ones that sport gas stations, for the White Flight set. So Safeway gas stations exist only in areas close to the upper-middle-class tracts where the white folks have moved. And those areas are way, way off my beaten track. By the time I got all the way up there and back, I would have spent more on wasted gasoline than I would have saved on the gas buy.

And besides…better strategies exist.  IMHO the Costco AMEX card is about the best of those.  You get 3% back on gasoline (which is usually pretty cheap at Costco to begin with), 2% back at U.S. restaurants, 2% back on travel purchases, and 1% back on everything else. Once a year you get a lump-sum  cash back “reward” — a kickback on purchases made during the year.

There’s a Costco on every corner in this city, so it seems. Costco underprices stations in the immediate vicinity of its stores. Gasoline prices vary wildly by the part of town you’re in: in upscale Scottsdale you can pay ten to thirty cents a gallon more than other parts of town. In the westside slums, you’ll pay ten cents a gallon less than you’ll pay in the more or less middle-class tracts in the central areas or the far west.

One Costco, which is on my way to many destinations, straddles an aging middle-class district and a downscale high-density area that feathers into the gang-infested tracts bordering the I-17. That thing ALWAYS has the lowest prices around. I try to time gas purchases to days when I know I have to drive down in that direction. The gas is cheaper in the first place, and then I get a 3% kickback on it.

So ultimately, by purchasing gas at Costco regularly — even if I happen to be at one of the higher-priced outlets — I end up saving a lot more than I would if I traipsed up to North Phoenix for the privilege of collecting “bargain” gas from Safeway.

In the gasoline department, BTW: man, quitting the hateful teaching gig sure is saving on the gas! In the last month I taught, the four-day-a-week commute racked up an astonishing $230 in gasoline bills. In the first full month of freedom: just $80.

Just think of all the things I can diddle away that $150 savings on! :-D

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vinny January 26, 2013 at 7:47 am

Congratulations on your gasoline savings! I remember an economist speaking in the early 1980′s about the then ten-year perspective on the 1973 “energy crisis” and the fuel conservation efforts imposed by gasoline shortages. He said that the economists of the day forgot, that every drop of gasoline saved by normal consumers became a source of supply to industry, effectively becoming a subsidy to airlines, heavy industry and everything that relied on commercial transport.

The North American economy was well on its way to a nice boom by 1979, when the Iran hostage crisis again plunged it into doubt. An oil glut made the price of fuel so cheap that by the early 1980s you couldn’t give it away.

Won’t happen again, but it’s a macro example of what you’re experiencing at a micro level.

101 Centavos January 26, 2013 at 11:53 am

Everytime I read about FaM’s new-found freedom from the academic grind, I get a warm fuzzy.
Well-done! Again.

Mrs PoP @ Planting Our Pennies January 26, 2013 at 1:05 pm

Ahh, but then you have to go to Costco… which I have a bit of a vendetta against. Not to mention they are completely out of the way and in shopping centers that are absolute pains in the neck to navigate in and out of efficiently. *sigh* Guess I’ll just have to quit my day job to save on gas, too! Someday =)

funny January 26, 2013 at 7:04 pm

LOL! Sometimes the parking lots leave something to be desired, like…oh, say…parking, for example.

The Ghetto Costco closest to my house shares space in a ghost shopping mall with a Walmart. The two of those gigantic warehouse stores in a single, aging mall create one massive anthive of a traffic jam. Some of those people who shop at Walmart, OMG! They’re as wacky behind the steering wheel as they are inside the store.

Where Costco has managed to acquire a chunk of land and erect their own building on it, there’s usually plenty of parking and it’s intelligently designed — in Phoenix the store on the I-17 just below Union Hills is an example, and so is the one in the Scottsdale Airpark. Where they’ve set up shop in an existing mall, such as Paradise Valley Mall or Spectral Mall, the parking just doesn’t suffice. In those cases, I deliberately park as far from the store as possible and figure it’s a good excuse to get some exercise…as strategies go, it works to avoid aggravation.

Susan Schmid January 26, 2013 at 2:22 pm

Like many things, the value, for fuel purchases, of the various store rewards programs and credit card rebates really depends on a combination of personal shopping and logistical factors. There is no one right answer that covers everyone in every area. Our Smith’s Rewards (part of Kroger and includes many chains) used in conjunction with our Costco Amex saved us between $100 and $200 last year on diesel (not sold at Costco), so it absolutely is worth it for us. We also often find our Safeway card useful when on vacation in areas where Safeway stores have fuel stations.

funny January 26, 2013 at 7:07 pm

It’s odd, isn’t it, that Costco doesn’t sell diesel, because so many of their customers seem to be small business owners. You’d think they’d have a high percentage of diesel vehicle drivers in that demographic.

It sounds like combining several of these “rewards” schemes with a cash-back credit card is working well!

KS January 30, 2013 at 5:29 am

The Kroger near me in central NC gives 2x points when you buy gift cards, and 10 cents per gallon per $100 purchase, which you can use at Shell. So I just pick up a $50 gift card to Shell (cheapest gas here), and use that to buy gas -pretty easy!

funny January 30, 2013 at 5:59 am

@ KS: Interesting that Shell is the cheapest gas in those parts. Here, Shell stations consistently have the highest gas prices.

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