# Gas Station Sign - Meaning? **URL:** \ **Category:** Factual Questions\ **Created:** [August 3, 2007, 2:27am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232 "2007-08-03T02:27:00Z")\ **Posts on this page:** 14\ **Page:** 1
**Author:** ![Jinx](https://avatars.discourse-cdn.com/v4/letter/j/c6cbf5/32.png) [@Jinx](https://boards.straightdope.com/u/Jinx)\ **Post date:** [August 3, 2007, 2:27am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/1 "2007-08-03T02:27:00Z")
“Cheapest price allowed by law” Have you seen this posted at gas stations? What the heck does that mean? You mean to tell me the price is 100% taxes!?!? ---
**Author:** ![Bobotheoptimist](https://avatars.discourse-cdn.com/v4/letter/b/919ad9/32.png) [@Bobotheoptimist](https://boards.straightdope.com/u/Bobotheoptimist)\ **Post date:** [August 3, 2007, 2:31am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/2 "2007-08-03T02:31:31Z")
Selling gasoline below cost can be troublesome for big companies. I don’t believe that independent stores are restricted, but that might vary by location. ---
**Author:** ![desdinova](https://avatars.discourse-cdn.com/v4/letter/d/8baadc/32.png) [@desdinova](https://boards.straightdope.com/u/desdinova)\ **Post date:** [August 3, 2007, 3:17am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/3 "2007-08-03T03:17:05Z")
Some states require businesses to sell their products for at least cost, or even with a markup. In Oklahoma, we have the “Unfair Sales Act” which prohibits selling products for below cost, plus > [@](#): > > (1) freight charges not otherwise included in the invoice cost or the replacement cost of the merchandise as herein set forth, and (2) cartage to the retail outlet if done or paid for the retailer, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be three-fourths of one per cent (3/4 of 1%) of the cost to the retailer as herein defined after adding thereto freight charges but before adding thereto cartage, and taxes, (3) all state and federal taxes not heretofore added to the cost as such, and (4) a markup to cover a proportionate part of the cost of doing business, which markup, in the absence of proof of a lesser cost, shall be six per cent (6%) of the cost of the retailer as herein set forth after adding thereto freight charges and cartage but before adding thereto a markup. Just digging around a bit, I turned up [this case](http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=ok&vol=/supreme/1985/&invol=1985ok56) where one oil company apparently sued another oil company for selling gas below the minimum mandated by law. Bear in mind that I’m not even remotely a lawyer and am certainly not qualified to interpret legal rulings and laws and such. Don’t even bother to ask me how often this is enforced, or really anything about exactly how the act works, because I have absolutely no idea apart from what I can read in the text of the act itself and even then I don’t know enough to fully understand what I’m reading. But my understanding is that at least some states (like mine) set price floors for goods. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [August 3, 2007, 3:20am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/4 "2007-08-03T03:20:34Z")
[QUOTE=Jinx] “Cheapest price allowed by law” Have you seen this posted at gas stations? What the heck does that mean? You mean to tell me the price is 100% taxes!?!? [/QUOTE] Generally, that’s used for cigarettes, though it might be for gas in some places. What it means is that there’s a law which says that a store _must_ make at least X amount of profit on each sale. So if the store buys a pack of cigarettes for $2.00 and the law says that they have to make a 10% profit on the pack, then the lowest price they can sell the cigarettes for is $2.02. Mind you, this _doesn’t_ mean that you’re getting the lowest price possible, since if someone else has a lower price per pack, they can charge even less. Presumably, if the sign you’re talking about refers to gas, similar rules would apply. ---
**Author:** ![Joey\_P](https://avatars.discourse-cdn.com/v4/letter/j/919ad9/32.png) [@Joey\_P](https://boards.straightdope.com/u/Joey_P)\ **Post date:** [August 3, 2007, 3:38am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/5 "2007-08-03T03:38:47Z")
In Wisconsin we have a minimum markup law on gas. Similar to what Tuckerfan mentioned about cigarettes. This prevents big companies (Citgo, BP, Speedway, Kwiktrip) from taking a loss on gas for a few months to put the mom and pop places out of business. ---
**Author:** ![DSYoungEsq](https://avatars.discourse-cdn.com/v4/letter/d/c6cbf5/32.png) [@DSYoungEsq](https://boards.straightdope.com/u/DSYoungEsq)\ **Post date:** [August 3, 2007, 1:27pm UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/6 "2007-08-03T13:27:23Z")
There was also, IIRC, a controversy in some states where large grocery and or department store companies that also had gas stations were selling the gas for below cost as the result of discounts given to those who used the store. Without worrying about whether or not that’s a valid issue, it does point out that there must be an underlying state law involved setting a minimum price. ---
**Author:** ![Harmonious\_Discord](https://avatars.discourse-cdn.com/v4/letter/h/74df32/32.png) [@Harmonious\_Discord](https://boards.straightdope.com/u/Harmonious_Discord)\ **Post date:** [August 3, 2007, 1:43pm UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/7 "2007-08-03T13:43:41Z")
In Wisconsin it means they are blaming the high price on the state’s minimum mark up law. The funny thing is for years the gas stations bitch about it. The legislature bitches about it. Nobody shows support for it, but the legislature doesn’t change the mark up law. I think the gas retailers support the current law, and just use it a an excuse to deflect anger, while laughing about the suckers believing the story. ---
**Author:** ![groman](https://avatars.discourse-cdn.com/v4/letter/g/73ab20/32.png) [@groman](https://boards.straightdope.com/u/groman)\ **Post date:** [August 3, 2007, 5:21pm UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/8 "2007-08-03T17:21:33Z")
[QUOTE=Harmonious Discord] In Wisconsin it means they are blaming the high price on the state’s minimum mark up law. The funny thing is for years the gas stations bitch about it. The legislature bitches about it. Nobody shows support for it, but the legislature doesn’t change the mark up law. I think the gas retailers support the current law, and just use it a an excuse to deflect anger, while laughing about the suckers believing the story. [/QUOTE] Umm, I would imagine that the only person profiting from the mark up law is the average consumer and small gas station owner. It screws the gas companies and the legislature (since they’d get more kickbacks from oil companies than consumers). The idea of the law is that Shell can’t just decide to sell gas in your neighborhood for $0.50 a gallon until every other gas station is out of business and then jack the price to $7.00 to make up their losses. ---
**Author:** ![Harmonious\_Discord](https://avatars.discourse-cdn.com/v4/letter/h/74df32/32.png) [@Harmonious\_Discord](https://boards.straightdope.com/u/Harmonious_Discord)\ **Post date:** [August 3, 2007, 6:18pm UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/9 "2007-08-03T18:18:05Z")
The law is often used by gas stations to cause other gas stations to be audited in Madison. They do this over a penny difference in the price. I know what it’s for, and I’m pointing out that the stations use it as the fall guy as does the government of this state, saying we can do nothing. They have a way around it that makes the law a joke too. They print up a coupon good for $2 off a purchase of 10 gallons. ---
**Author:** ![Ignatz](https://avatars.discourse-cdn.com/v4/letter/i/3be4f8/32.png) [@Ignatz](https://boards.straightdope.com/u/Ignatz)\ **Post date:** [August 5, 2007, 3:50pm UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/10 "2007-08-05T15:50:09Z")
In NC at the SC border there was a gas station sign, “Last gas in NC, fillup now.” The price at the next and all succeeding stations in SC was 20 cents/gallon lower due to lower state gas taxes. _Caveat emptor_. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [August 6, 2007, 4:05am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/11 "2007-08-06T04:05:58Z")
So how does all of this fit in with this Supreme Court decision from June? > [@](#): > > Dr. Miles is dead. > > The Supreme Court on Thursday overturned a 1911 precedent – known by law students everywhere as the Dr. Miles rule – under which minimum retail prices established by manufacturers were deemed to be an automatic or per se violation of the Sherman Antitrust Act. > > – snip – > > “The only safe predictions to make about today’s decision are that it will likely raise the price of goods at retail and that it will create considerable legal turbulence,” Breyer said. He suggested that the decision could cost an American family of four up to $1,000 a year in higher costs for products in retail stores, the result of minimum prices set by manufacturers. > > The decision brought a range of reactions, with some analysts predicting a shutdown of discount retailers nationwide. But others said the decision was limited, especially because minimum price-setting can still be attacked in courts under the rule of reason standard. Source: [http://www.law.com/jsp/article.jsp?id=1183021577657](http://www.law.com/jsp/article.jsp?id=1183021577657) ---
**Author:** ![Jinx](https://avatars.discourse-cdn.com/v4/letter/j/c6cbf5/32.png) [@Jinx](https://boards.straightdope.com/u/Jinx)\ **Post date:** [August 9, 2007, 11:05am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/12 "2007-08-09T11:05:41Z")
Is that why we don’t see two corner gas stations having an all-out price war? I know that was an old practice perhaps going back to the days of Standard Oil, but today you never see it, and I;ve never understood why. Ah-ha! The SD let’s the light shine through! - Jinx ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [August 9, 2007, 11:27am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/13 "2007-08-09T11:27:55Z")
I’m reasonably certain there’s no such law in Ohio. I seem to recall two gas stations near… Twinsburg, I think… having an all-out price battle one day. They had to have been losing money. Maybe they made it up selling $2 bags of chips… ---
**Author:** ![pool](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pool/32/4152_2.png) [@pool](https://boards.straightdope.com/u/pool)\ **Post date:** [August 9, 2007, 11:36am UTC](https://boards.straightdope.com/t/gas-station-sign-meaning/414232/14 "2007-08-09T11:36:55Z")
> [@](#): > > Originally posted by **Tuckerfan** > So if the store buys a pack of cigarettes for $2.00 and the law says that they have to make a 10% profit on the pack, then the lowest price they can sell the cigarettes for is $2.02. Minor Nitpick: If they had to make 10% profit, they would sell it for $2.20