Accounting 12 - Chapter 12

Link: http://www.cbc.ca/consumer/story/2008/10/29/pe-gas-discounts.html

Summary:
Recently, on Prince Edward Island, Wilsons Fuel has been told by the provincial regulator to stop giving a two-cent-a-litre discount to consumers who pay cash for gasoline. The island regulator was responding to the complaints that the discounts at Wilsons Fuel was charging less than the regulated minimum price for gas. The area manger Doug MacDonald saw no problems in offering his discounts because he saw it similar to other gas stations such as Petro Points at Petro Canada, and Esso Extra Points at Esso. The reason why giving such a discount like the one at Wilsons Fuel is bad is because the discount lowers the prices of gas below minimum price, and it eliminates the charges that would otherwise go to the credit card company for the costumer using the credit card. In the recent ruling of this week, IRAC disagreed that the cash discounts is in the same category as other incentive programs (such as Petro Points), and ordered a stop. The Legislation allows incentives, but not direct cash discounts. Wilsons Fuel will have to find another way to offer its customers a discount.

Connections:
The connections I made between the article and chapter 12 is Cash Discounts. Wilsons Fuels was trying to give a discount to those who paid cash for gasoline, and it connects to how cash discounts are a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill. In Wilsons Fuels' case, all they did was give a discount to their customers for paying cash, which is technically on time (Cash on Delivery).

Reflection:
I myself do not see any differences between giving a discount for paying cash for gasoline and giving incentives at other gas stations like Petro Points at Petro Canada. Either way, they both reduce the prices of gasoline and is a plus for the consumers. I agree with Doug MacDonald point of view, who said what they were trying to do was offer that money (from credit card charges) back to the customer, which the customers would have to pay to the credit card companies for using their credit card otherwise. Finally, relating to the discounts on gas prices, I believe that regulations for gas prices should not be so strict because gas prices are high enough as it is, and a few cents off per litre will not hurt anybody. What world has it become where money has became the main thought of the world?