GEZ OIL CASES
3.0 Causes of the Problem
i. Increasing cost of credit card fees paid to banks.
Petrol operators faced the problem related to cost of credit card. Fees paid to banks for credit card was increased. This is due to the more and more customers were using credit cards. In addition, the credit card fee imposed by banks was 1% of the sales price.
4.0 Decision Criteria and Alternative
There are two alternative solutions for problem of the cost of credit card fees that need to pay to the banks. First alternative is, petrol stations should discuss with the bank to reduce the rate of fees charged. This was due to the fees charged for each transaction is quite high. They also should apply from the bank to reduce the fees from 1% to 0.5% of the sales price. So, petrol station could save half of the cost of credit card fees to be paid to the bank. This is some calculation. If customer refuel at RM100, so :
Fees 1% ; RM100 X 1% = RM1.00
Fees 0.5% ; RM100 X 0.5% = RM0.50
If banks agreed with this new fees rate, so, petrol station will automatically can reduce their costs.
Other alternative for this problem is petrol station should reduce the number of fuel pump that providing swiping or payment by credit cards. They also can only provide with only one fuel pump that accept credit card payment. By this alternative, the number of customer that pay by credit cards will decrease. Indirectly, it also give impact to the cost of credit card fees. When there are small number of customer that use credit card, so, the fees will decrease. Notwithstanding, petrol station cannot stop the using of credit card payment facilities at petrol stations and just use payment by cash. This is because, it is one of the customer convenience that will prevent from crowded counter when all customer pay in cash.
i. Increasing cost of credit card fees paid to banks.
Petrol operators faced the problem related to cost of credit card. Fees paid to banks for credit card was increased. This is due to the more and more customers were using credit cards. In addition, the credit card fee imposed by banks was 1% of the sales price.
4.0 Decision Criteria and Alternative
There are two alternative solutions for problem of the cost of credit card fees that need to pay to the banks. First alternative is, petrol stations should discuss with the bank to reduce the rate of fees charged. This was due to the fees charged for each transaction is quite high. They also should apply from the bank to reduce the fees from 1% to 0.5% of the sales price. So, petrol station could save half of the cost of credit card fees to be paid to the bank. This is some calculation. If customer refuel at RM100, so :
Fees 1% ; RM100 X 1% = RM1.00
Fees 0.5% ; RM100 X 0.5% = RM0.50
If banks agreed with this new fees rate, so, petrol station will automatically can reduce their costs.
Other alternative for this problem is petrol station should reduce the number of fuel pump that providing swiping or payment by credit cards. They also can only provide with only one fuel pump that accept credit card payment. By this alternative, the number of customer that pay by credit cards will decrease. Indirectly, it also give impact to the cost of credit card fees. When there are small number of customer that use credit card, so, the fees will decrease. Notwithstanding, petrol station cannot stop the using of credit card payment facilities at petrol stations and just use payment by cash. This is because, it is one of the customer convenience that will prevent from crowded counter when all customer pay in cash.