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Tesoro dropping prepay requirement

Posted: Tuesday, December 10, 2002

After changing all of its Alaska gasoline stations to prepay just over two months ago, Tesoro 2 Go is rescinding that decision for its five Kenai market locations as of today.

"We tried something, the customers didn't like it, and we listened," said Rik Bucy, general manager for Tesoro North Tesoro 2 Go stores Monday.

The decision affects the Tesoro 2 Go stations on the Sterling and Kenai Spur highways in Soldotna, the stations on the Spur Highway near the Moose Lodge and at Willow Street in Kenai and one on the Spur Highway in Nikiski.

Some selected pumps, which are not easily visible to attendants, at the Sterling Highway and the Nikiski stations will remain prepay.

Tesoro 2 Go joined other gasoline retailers this fall in requiring payment before dispensing fuel in an attempt to curb thieves from driving away without paying.

Williams Express stations went to prepay Sept. 1, and Tesoro 2 Go stations became prepay Sept. 30.

Other stations, including many independently operated Tesoro stations and Chevron stations on the Kenai Peninsula, did not switch, fearing they would inconvenience customers and drive them away.

"There has been some extreme customer resistance to prepay," Bucy said. "People found it terribly inconvenient."

Bucy said some competitors also began marketing against those companies requiring prepay by advertising that they were not requiring prepayment.

One such station -- Petro Express on the Sterling Highway in Soldotna -- advertised on its marquee that "Prepay is not required" there.

Soon after its move to prepay, Bucy said Tesoro noted a slight drop in business.

"The drop in volume has not caused us to suffer a loss in profitability," he said in early November.

Monday he said the resulting drop in volume was difficult to pinpoint now because there hasn't been much winter weather.

"Everybody in the industry is down in sales. People aren't filling the extra fuel tanks to take with them to go off and play on the weekends, and you and I aren't letting our cars sit at idle to warm up for extended periods of time in the morning.

"Fuel consumption is down for everybody," he said.

He added, however, that the company's return to not requiring prepayment is solely in response to customers' reaction to the inconvenience of prepay.



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