It appeared to be a great gasoline discount offer: Buy fuel with a debit-like card that would allow you to pre-purchase gas at today's costs no matter how much they rise in the future.
But the company marketing the program through MyGallons.com has not been able to secure a bank to perform the credit card transaction at the gas station and the Better Business Bureau has challenged the South Florida company for misleading advertising.
On Tuesday, MyGallons LLC announced that it is giving a full refund to more than 6,000 customers nationwide who signed up to use the discount program since it launched on June 30 but never got a chance to use it, company spokesman Greg Salsburg said.
"We are a consumer-friendly program and we are sorry for the inability to provide this wonderful program to consumers," Salsburg said. He added that the company will notify all customers about the refunds and return the money directly.
When the MyGallons gas discount program was launched, the Web site claimed that its card would be accepted at more than 95 percent of gas stations nationwide. But the company's site lists no cooperating gas stations. Instead, a note indicates that a "new location finder will be available as soon as we announce our new payment network." Salsburg said that MyGallons is still negotiating with a bank to administer the program and hopes to offer the discount program in the future.
And once the program is in place, MyGallons officials are planning to waive the first-year membership fee of $29.95 or $39.95 to those who signed up for the program recently.
Company officials have told bureau officials that Miami-based MyGallons was going to use the Voyager fleet network, a bank-card processing service owned by U.S. Bank, to administer the program. But negotiations have broken off recently, bureau officials said.
"The problem was that MyGallons was promoting a product in the Web site that didn't exist," said Mike Galvin, a spokesman for the Better Business Bureau in South Florida. "And the company couldn't provide a viable vendor to provide the services."
The bureau gave MyGallons an "F" rating recently because of concerns that the company's advertising was misleading.
The company was claiming that its card would be accepted at more than 200,000 participating gas stations nationwide.
Galvin said MyGallons has modified some of its claims since bureau officials challenged the company's advertising offer and bureau officials changed the rating to "NR" — short for no rating — after meeting with company's officials. This rating means that bureau officials are still reviewing the company.
MyGallons.com's Web site promised consumers a way to save money on gasoline. The site said price per gallon is based upon the average gas price in the ZIP code of the consumer's account billing address at the time of enrollment.
Consumer advocates have warned about the risks of such programs, noting members are stuck paying higher prices for gas if they drop and stay low.
GasBankUSA, a similar service offering a debit card for a $19.95 annual fee for individual accounts, is set to launch later this year. Boynton Beach-based GasBankUSA advertises a program that allows businesses, fleets, trucking companies and consumers to lock in the price of their gasoline using the national average price calculated by the American Automobile Association, said Jonathan Paul, a spokesman for GasBankUSA.
PowerPay, the merchant services provider for MyGallons, has assured bureau officials that membership fees processed on behalf of customers have been placed in a non-interest bearing escrow account.
"We didn't create this situation," Galvin said. "[MyGallons] did by providing misleading information to consumers."