DENVER — An effort to pass the first law in the nation reducing the fees convenience and other stores have to pay credit card companies suffered a quick defeat in the Colorado Legislature, torpedoed by the financial services industry.

The House Finance Committee killed House Bill 1154 which would have eliminated sales tax from the fees imposed on the retailers.

According to The Colorado Statesman, Colorado collected $2.1 billion in sales tax revenue last year. Of that about sixty percent came from credit, prepaid or debit cards. The Statesman estimated the credit card industry got $25 million on the sales tax in addition to the other so-called "swipe fees" it charges retailers.

The retailers argued they were paying credit card companies to collect taxes for the state, but the opposition first got the hearing scheduled before the Finance Committee delayed while it mustered its resources, then appeared in force at the hearing when it was finally conducted. At first, the Committee decided to strike the bill and study the effects of such legislation, then gave in to industry arguments as to the proposed breadth of the study and abandoned the whole effort.

The fees often reach as much as three percent of the total purchase amount and related sales tax. The state's sales tax rate is 2.9 percent but, depending on how many local and district taxes are involved, retailers say they are paying up to 10.5 percent.

While the state does remit 3.33 cents to the retailer for every sales tax dollar paid on time, other taxing entities — such as cities, counties and special districts — do not. When governmental entities are paid by credit card they are allowed to assess a convenience charge, but retailers are prohibited from doing so. Retailers say they are left to subsidize the cost of collecting the government's tax.

Gasoline and other retailers pushed for the legislation in the wake of diminished profits caused by increased usage of credit and debit cards at the pump and, for a brief time, the bill enjoyed bipartisan support.

The bill also had the backing of the Colorado Wyoming Petroleum Marketers Association whose spokesman Grier Bailey said, "Taxes are for the benefit of the public good, not so credit card companies can make more money off them." He estimated credit card companies made $11 million off Colorado convenience stores last year in fees on taxes alone.

Opponents of the bill said if passed the law would put an unfair burden on card processors and banks because it would require sophisticated, expensive software to convert and it would be almost impossible to develop software that would cover all the retailers as the number of taxing entities and the amounts they charge varies widely across the state.

And, argued Jennifer Waller, senior vice president of the Colorado Bankers Association, "Why should we have to provide any service for free? Merchants want their fee for collecting on the tax but they don't want to pay the credit card system for collecting, processing and advancing the tax. They kind of get a mini interest-free loan." She also said it is naive to think that the nationwide processors would create a unique system just to suit Colorado.

Other efforts in the nation to reduce fees have failed. Congress has refused to address the issue.

DENVER — In other legislative action, a bill has been introduced to make offering a simulated gambling device a misdemeanor crime.

The devices are typically located in convenience and other stores that offer internet time to play games closely mimicking those played on traditional slot and video poker machines.

The bill passed 11 to 1 in the Business Affairs Committee of the House.

GREELEY — The owner of a convenience store here says he has the answer to credit card companies charging transaction fees. He has become the first gasoline retailer in the world to accept Bitcoin for payment.

Cosmic Market Owner Shahzad Sarwar said after studying the process he decided it was "the right thing to do."

In the first six months after announcing on Reddit he would accept it he had only six hundred dollars worth of business conducted using Bitcoin. But he says he thinks the idea will catch on and his first customer drove an hour to get gasoline from him because of the service.

A large poster in the store window proclaims, "The People's Currency, Bitcoin Accepted Here," and urges the public to "Take the Power Back. Let the Banks Eat Cake!"

Sarwar says, "In the end I'd like to see the power of banking in the customers' hands versus the traditional bank." He notes taking cash, the only other former alternative, can lead to employee theft and the station manager is forced to do cash counts each night, then endanger himself by driving to the bank with large amounts.

He said Bitcoin is much more profitable. Of $1 million in sales he paid $40,000 in card transaction fees. The same $1 million would amount to $500 in fees with Bitcoin.

In addition to credit card fees, there is the danger of data theft and fraudulent transactions. When a customer uses a card he has no need to come into the store and "Who knows who the card belongs to?"

While usage of Bitcoin remains small he thinks it will grow as people learn more about it. He said other merchants in his area have followed his lead, including an animal hospital and a coffee shop.

RIFLE — A convenience store here made an easy $50,000 by selling a customer a Powerball lottery ticket worth $90 million.

The $50,000 is the commission the Kum & Go gets off the sale.

The winner, identified only as Claude "Al G," said he woke to his wife's screams on a Sunday morning and rushed into the living room to find it was screams of joy. The tow truck driver said he won't quit his job, but he will take the family on a nice vacation.

LOVELAND — The owners of a new car wash here want customers to vacuum their vehicles in comfort.

Wash Worx has heated concrete surfaces at all 22 vacuum stations. "When you need to vacuum your car on a cold day you don't want to slide around in cold water," said co-owner Erik LaPlante.

The tunnel car wash pulls the car through the foaming brushes and ejects it three minutes later, clean and dry. It uses biodegradable products and recycles about eighty percent of the water in a wash.

The public was offered a free wash in the month before the business officially opened.

The location, just off east Eisenhower Boulevard, was chosen carefully. It aims for commuters on the interstate and for residents of new housing under construction.

LaPlante's partners are John Parker, Mike and Ellen Lindsay and Thomas McDougall.

COLORADO SPRINGS — A man was pinned between his truck and an SUV at a 7-Eleven here.

The man was standing in front of his truck, the hood up, and checking the fluids when the SUV backed out of a parking spot in front of the store and struck him, trapping his left leg. When he was freed he was taken to a hospital for treatment. The SUV driver was cited for careless driving.

HIGHLANDS RANCH — A U-Haul smashed into a Circle K here. Two people inside were cut by flying glass but incurred no serious injuries. The convenience store suffered no structural damage.

COLORADO SPRINGS — A convenience store clerk taking a break outside in the early morning hours lived to regret it. He was shot at twice from a vehicle, and again as he scrambled to get inside the store. He locked the doors and called police. No arrests have been made. The motive for the shooting has not been determined.

DENVER — Not all crimes committed at gasoline stations are violent, although they may be more costly.

In Denver a man convinced the clerk at the Bradley Gas Station that he was an undercover cop from Aurora by removing his jacket and displaying his bulletproof vest and an Aurora Police Department business card.

The man said he had spotted what looked like a counterfeit twenty dollar bill in the cash register. He asked to see it, then took it as "evidence" and left.

In Glenwood Springs a man called a gasoline station, masquerading as the manager, and told the clerk he was sending someone to obtain money for parts. A man then appeared at the store and said he was there to collect a thousand dollars for the manager.

It turned out that the scam had been pulled at eight other gasoline stations, from Grand Junction to Carbondale, and the scammers were active in eight other states. In Colorado they got $8,000.

Their spree ended with an arrest in Palm Springs, California. They will be tried in Colorado on felony theft charges, authorities said.

PARACHUTE — When a man discovered someone had stolen his billfold, a $3,000 pair of binoculars, a handgun and an AR-15 assault rifle he took it into his own hands to track down the culprit. He hit paydirt at a gasoline station.

The unnamed victim immediately got a list of credit card purchases charged to him and managed to obtain surveillance footage at a gasoline station. Matching the time of a charge to the footage he identified a suspect — one of his own employees.

Police reviewed the footage and checked the suspect's photo on Facebook before arresting him.

PONCHA SPRINGS — The Sinclair Fuel station offers free parking for the vehicles of those who take the biker shuttle to their starting point on the Monarch Crest trail.

COLORADO SPRINGS — Joe and Neecha Brown believe diversification pays.

They have opened Bubbles Drive Thru Coffee in their Bubbles Car Wash and Detail Center.

DENVER — Western Convenience Stores has found a way to get its logo onto customer photos.

The chain is sponsoring a photo contest with a snowboard as the prize.

The only condition is that its logo — or the logo of any Pepsi Co. brand — be displayed in the photo. The photographer could be holding the Pepsi product if that is more convenient than Photoshopping it into the picture.

Oh, and the winning photo must have charisma.

NIWOT — Who wouldn't want to return to this? In the 1920s, merchants here catered to their customers who drove Tin Lizzies by installing hand-operated gasoline pumps in front of their stores.

Originally published in the April 2015 issue of the O&A Marketing News.
Copyright 2015 by KAL Publications Inc.