Chevron Launching New Diesel Credit Card

Published in CSP Daily News

Company making plans for other marketing initiatives

By  Carole Donoghue, Petroleum Editor

SAN RAMON, Calif. -- Chevron Corp. is offering its marketers a new credit-card tool that it said will help them sign up more fleet business, but some jobbers who have heard the major's pitch are far from convinced.

The new plastic is called the "Diesel Advantage" card and is aimed at fleets of 15 to 20 vehicles that typically make larger purchases. Chevron is trying to go after the business it has been missing due to competition from Wright Express (WEX) and Voyager.

The new card can be used at not only Chevron and Texaco-branded stations but also at other fleet fueling firms, such as Love's Travel Centers, Travel Centers of America, Pilot and Flying J.

Diesel demand has increased 29% since 2004, said Chevron, citing the U.S. Energy Information Administration and more than half the company's retail sites now offer diesel.

Chevron is boasting that it is the first major to offer a credit card to fleets with commercial indeed pricing for diesel fuel. Billing to fleet customers will be based on OPIS rack prices, plus a differential. Fleets that use the card at Chevron or Texaco sites receive a two-cents-per-gallon rebate once their purchases exceed 2,000 gallons-per-month mark.

Chevron is also promising help in marketing the card through a dedicated customer service phone line.

There's a wrinkle to the deal that will not sit well with some of the company's marketers, however--a 2.6% processing fee plus a 15-cent charge per transaction.

"It will be really tough for me to want to push that card," said one wholesaler. "They say it's cheaper than the fees on the WEX and Voyager cards, but I don't think it's less than the fees on the Chevron-branded fleet cards, so why should I use it?" Chevron issue a new co-branded MasterCard for fleets in 2010 that carries a 1.5% processing fee, plus a 10-cent transaction fee.

The card is being issued by Norcross, Ga.-based Fleetcor, which purchased Chevron's fleet card business in 2007.

In other company news:

  • Chevron is rethinking its prompt payment strategy for jobbers after one of its competitors tweaked its offer to wholesalers. Shell is now offering jobbers the option of a 1.25% prompt-pay discount, in addition to its standard 1%-10 day payment deal. Exxon has similar terms, sources told CSP Daily News. Chevron offers a 1% discount but told jobbers in January that it would cap the amount it pays at 4.5 cents per gallon, once rack prices exceed $4.50 per gallon (see Related Content below for previous CSP Daily News coverage). The company has said it will look again at the cap issue if the price hits $4.50 per gallon.
  • Marketers have been "beating up Chevron" when it comes to loyalty programs, complaining that they're having a hard time competing with Shell outlets, CSP sources said. Shell has loyalty programs with large grocery chains Kroger and Giant, among others, and is about to launch a tie-in with the third-party FRN network that features Macy's, Barnes & Noble and J.C. Penney's among the rewards partners. Chevron has now hired a "loyalty manager" for its San Ramon, Calif., corporate headquarters who will be responsible for developing rewards offers for the company.
  • No firm deadline has been set yet, but Chevron also plans to make its Texaco "image refresh" mandatory for marketers. The upgrade standards will be announced in the last quarter this year and will be required, starting in the first quarter of 2013. Marketers expect the Texaco rules will be similar to the Chevron image refresh demands. "They put a lot of the costs on the jobber when they did the Chevron upgrades, they didn't come close to covering the cost," said one wholesaler.
  • The company is planning a multi-pronged advertising campaign, including special website promotions. While Chevron abandoned its famous toy cars, its website allows customers to design a virtual toy car. A new "Name It and Win" promotion will give away award three real cars to people who come up "cutesy" names that Chevron can use, sources sid. Additionally, Chevron has cut a deal with the product and service-rating website Yelp so that when consumers enter a specific item into the search engine, they will automatically be shown Chevron locations within 15 miles of their target location. More advertising funds will be used to promote the brand on Univision TV, one of the main networks serving Hispanic consumers.

Meanwhile, Chevron will launch its spring credit card promotion April 1, offering consumers a 20 cents per gallon credit for 60 days after they open a personal credit card account, and 10 cents per gallon in an ongoing credit if they apply for a co-branded Visa card. Retailers earn $2 for every card application sent it.