The discount fuel docket illusion

Larry Graham
February 18, 2013
watoday.com.au

Clever marketing seduces us into believing we are getting something for nothing when what we are really doing is purchasing an illusory discount at an undisclosed price.

So the Australian Competition and Consumer Commission is having a serious look at discount fuel dockets!

In 2000, I was on a Parliamentary inquiry investigating why fuel prices were so high.

Needless to say I learnt a lot about the fuel industry, gutless governments and legalised theft.

Back then, the major oil companies were winkling independent retailers out of the market and the newcomer supermarkets were just starting to use their discount docket system to break into the fuel business.

Angry independent retailers predicted that once the supermarkets became the major fuel suppliers, motorists would suffer higher fuel prices as competition in the retail market shrunk.

It seems they were correct; the discount docket system has taken the supermarkets share of the fuel market from nothing to 45 per cent.

These so-called discount dockets are a great marketing ploy that make us think we are getting something for nothing. We’re not.

One of the reasons is very restrictive conditions the supermarkets impose.

One of the reasons is very restrictive conditions the supermarkets impose.

The Coles, Woolworths and IGA schemes are very similar in their design in that they:
– Require the consumer to spend over a stipulated amount, and
– limit the amount of fuel that can be purchased, and
– impose a use by date, and
– restrict use to the supermarket branded outlets, and
– can only be used one at a time.

There would be little wrong with those restrictions if these discount dockets were a gift from the supermarkets, and I reckon if they gave them to you with no restrictions they would have a ‘loyal’ customer base right up until they stopped doing it.

But that is not how the system works.

The supermarkets not only make a profit from selling you their fuel, the entire cost of the fuel discount must be recovered by increased prices in their shops. And that cost is significant; at the current rate, each voucher (of which there are millions every day) has a face value of $12 (150 litres maximum multiplied by the 8 cents per litre discount = $12) that has to be recovered by higher prices in their shop.

Clever marketing seduces us into believing we are getting something for nothing when what we are really doing is purchasing an illusory discount at an undisclosed price.
Like hidden taxes, there is no consumer choice in the matter; nor is there any opt-out provision that would enable consumers who don’t take a voucher to receive reduced prices in the supermarket. Maybe the ACCC could fix that while they are on the job; surely being charged for something you don’t get is not right.

The ACCC could then force a change of the rules to allow us stockpile the discount vouchers and use any number of them at the same time to fill our tank without paying. Because we have already paid for it through the higher prices, the cost to the supermarkets is negligible but the benefit to us is considerable.

Then ACCC could also abolish the expiry date or make the supermarkets refund you the money you have already paid. Then they could move to break the tie between discount dockets and supermarket branded outlets so we can use the discount dockets anywhere.

There you go ACCC; four simple steps, the problems are solved and we end up with a good deal for consumers, more competition and lots and lots of drivers made happy.

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