He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.

"The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."

His complaints target the so-called interchange fee - a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed - usually at just under 2 percent - but the dollar amount of the fee rises with the price of the goods or services.

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 cents to 12 cents a gallon, are seeing profits shrink or even reverse.

In a good month, Randolph's small operation would yield a $60 profit on gasoline sales. But that's been buried as soaring prices forced the station to pay about $500 a month in interchange fees.

"At these prices, people aren't making any money," said Jeff Lenard, spokesman for the Alexandria, Va.-based National Association of Convenience Stores. "It's brutal."

Lenard's group reports that convenience stores paid roughly $7.6 billion in credit card fees last year, while making $3.4 billion in profits.

The way interchange fees are structured has long annoyed retailers, prompting calls for relief.

Legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies.

The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.

"We have always contended that it doesn't cost Visa and MasterCard any more to process a $1,000 transaction than it does a $100 transaction," said J. Craig Shearman, vice president of government affairs at the retail federation.

The credit card companies say fees are just part of the cost of doing business.

MasterCard has capped interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin.

Accepting MasterCard also gives gas stations "increased sales, greater security and convenience, lower labor costs, and speed for their customers at the pump," Gamsin said in an e-mail message to The Associated Press.

Visa argues that the fees are offset "by the tangible benefits to stations and their customers, such as the ability to pay at the pump," the company said in a statement.

Absent congressional action, gas stations are seeking other relief, including discounts to customers who pay in cash.

Shipley Energy, which owns 23 Tom's Convenience stores in Pennsylvania, has partnered with a new credit card company, Revolution, which charges smaller interchange fees.

Bob Astor, wholesale fuels business manager for Shipley, said those savings get passed on to customers as cheaper prices at the pump. Customers who pay with the card get an automatic 10 cent discount.

Gas stations in South Carolina, Georgia, Maryland, New Jersey and Arizona are among those offering cash customers a discount, with savings from four cents to 10 cents per gallon.

The Connecticut General Assembly recently passed legislation to make it easier for stations to offer discounts for cash purchases, bidding to cut consumer prices by 10 cents to 12 cents on average.

Discounts for cash customers may not, however, be the stations' salvation.

The National Association of Convenience Stores reports that about two thirds of transactions at gas stations were with credit or debit cards in 2007, a figure expected to rise this year.

"The problem with cash discounts is, if people don't have the cash or don't want to spend the cash, you've inconvenienced them," Lenard said.

The experiment at Mr. Ed's Chevron, though, has paid off so far.

The station has been in business for 44 years and the ban on plastic hasn't scared many people off, Randolph said.

"We've got generations of customers who come here," he said. "Most of them have accepted it."

He may be the first in West Virginia to ban plastic, but gas station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.

"The more they buy, the more we lose," said Randolph, who manages Mr. Ed's Chevron in St. Albans. "Gas prices go up, and our profits go down."

His complaints target the so-called interchange fee - a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed - usually at just under 2 percent - but the dollar amount of the fee rises with the price of the goods or services.

As gas tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 cents to 12 cents a gallon, are seeing profits shrink or even reverse.

In a good month, Randolph's small operation would yield a $60 profit on gasoline sales. But that's been buried as soaring prices forced the station to pay about $500 a month in interchange fees.

"At these prices, people aren't making any money," said Jeff Lenard, spokesman for the Alexandria, Va.-based National Association of Convenience Stores. "It's brutal."

Lenard's group reports that convenience stores paid roughly $7.6 billion in credit card fees last year, while making $3.4 billion in profits.

The way interchange fees are structured has long annoyed retailers, prompting calls for relief.

Legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies.

The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.

"We have always contended that it doesn't cost Visa and MasterCard any more to process a $1,000 transaction than it does a $100 transaction," said J. Craig Shearman, vice president of government affairs at the retail federation.

The credit card companies say fees are just part of the cost of doing business.

MasterCard has capped interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin.

Accepting MasterCard also gives gas stations "increased sales, greater security and convenience, lower labor costs, and speed for their customers at the pump," Gamsin said in an e-mail message to The Associated Press.

Visa argues that the fees are offset "by the tangible benefits to stations and their customers, such as the ability to pay at the pump," the company said in a statement.

Absent congressional action, gas stations are seeking other relief, including discounts to customers who pay in cash.

Shipley Energy, which owns 23 Tom's Convenience stores in Pennsylvania, has partnered with a new credit card company, Revolution, which charges smaller interchange fees.

Bob Astor, wholesale fuels business manager for Shipley, said those savings get passed on to customers as cheaper prices at the pump. Customers who pay with the card get an automatic 10 cent discount.

Gas stations in South Carolina, Georgia, Maryland, New Jersey and Arizona are among those offering cash customers a discount, with savings from four cents to 10 cents per gallon.

The Connecticut General Assembly recently passed legislation to make it easier for stations to offer discounts for cash purchases, bidding to cut consumer prices by 10 cents to 12 cents on average.

Discounts for cash customers may not, however, be the stations' salvation.

The National Association of Convenience Stores reports that about two thirds of transactions at gas stations were with credit or debit cards in 2007, a figure expected to rise this year.

"The problem with cash discounts is, if people don't have the cash or don't want to spend the cash, you've inconvenienced them," Lenard said.

The experiment at Mr. Ed's Chevron, though, has paid off so far.

The station has been in business for 44 years and the ban on plastic hasn't scared many people off, Randolph said.

"We've got generations of customers who come here," he said. "Most of them have accepted it."