I’m hesitant to recommend government intervention in a capitalist economy.  Market forces should generally be relied upon to keep prices in check.  But electric companies — like the phone companies — have enjoyed being monopolies for decades.  Starting about ten years ago, you actually can choose a different generation company, but you’ll still pay a fee to your local electric company for the priviledge.  Worse, most consumers still either aren’t aware of PA Electric Choice, or aren’t served by a competing company.  The exact extent to which those factors harm competition can be debated in volumes, but at the end of the day, we still have price gouging on the horizon.

Really; in what other industry would this work?  What if Sheetz, Exxon, and Sunoco got together with the local fuel distributors and agreed to raise gas another 50% to $6 / gal?  What if AT&T, Verizon, T-Mobile, and Sprint all got together and greed to raise the average consumer’s bill 50% to $75?  What if Giant, Weis, and Karns got together and decided to raise the price of everything 50%? 

There is one big difference between the electric companies and the phone companies mentioned two paragraphs up.  The ILEC phone companies (SBC, Verizon, etc) are in bad shape.  They’ve been bleeding subscribers for years.  With the explosion in wireless usage and the advent of VOIP, customers have finally said “enough!” to awful customer service and arcane billing practices and are dropping their home phones in droves.

But since we’re not at the point where solar power, wind turbines, or other alternative forms of electric generation are practical at large scales, and since nearly everybody needs electric power, it may be time to re-introduce government intervention.

ABC27 published a response from PPL, in which PPL stated that re-introducing rate caps would be bad for consumers.

Sure it would.

I generally don’t carry cash around.  Everybody takes plastic.  Gas stations always do, and Sunoco, being one of the larger regional C-store chains, certainly does.  I grabbed my drink, walked up to the counter, and went to swipe my card.

“No card.  $5 minimum.”

I asked the cashier if he was being serious.  I mean, I can understand a minimum purchase at Mom & Pop’s Coffee Shop, but Sunoco operates almost 5000 stores in 24 states.  Surely they have a bulk rate with the card processor, and if they don’t, they can certainly afford the per-transaction fee.

“No you can’t do that.  Have to buy $5 or more.”

The kicker is, Sunoco can’t do that.  Visa and Mastercard both expressly prohibit merchants from requiring a minimum purchase amount and/or imposing a surchargefor credit card purchases.  Visa and Mastercard both want you to use your card as much as frigging possible, everywhere, all the time, for everything, always, no exceptions, end of discussion, period.  The merchant pays them a processing fee, either as a bulk monthly rate or as a per-transaction percentage, every time you use your card.

I’m a little more sympathetic to a small independent merchant already struggling to compete against The Big Guys.  A minimum purchase amount at an independent grocer or coffee shop, while still technically prohibited, wouldn’t really bother me.  But Sunoco is a pretty big company with pretty wide profits — ESPECIALLY these days.  So as a matter of point, or maybe just because I’m coming down with the flu and thus irritable to begin with, I called them in to Visa.

In doing a little bit of digging on the matter, I found that the general process of these things goes something like this:  On the first complaint, Visa sends out a compliance letter to the merchant.  They give the merchant a one-quarter (90-day) grace period to educate their employees an correct the matter.  Subsequent complaints outside of the grace period incur fines and penalties.  Excessive or egregious complaints may result in suspension or revocation of their merchant ID.

If you want to report a merchant for this or any other violation (apparently requiring photo ID is also a violation, unless your card isn’t signed), you should first try contacting whatever bank issued your card.  If your bank seems clueless or insists that minimum purchases are permissible (as mine did), call Visa directly at 800-VISA-911.  MasterCard’s number is 800-MASTERCARD.

Please keep in mind that reporting your neighborhood pizza shop or local farmer might not be in anyone’s best interest.  They’re probably already struggling under today’s skyrocketing expenses and depressed economy.  This doesn’t make the minimum purchase or surcharge permissible, but consider the possible outcomes:  Your favorite independent restaurant may stop taking cards, raise their prices across the board, or worse, close up shop.

But when it comes to Sunoco, Exxon, Wal-Mart, Pizza Hut, et al, rest assured that they have the profitability to not be jerks with their credit card policy.