• 08
  • December
    2011

Every small business is looking for an edge, a way to deliver better service and prices to their customers while increasing their profits. One popular method it to offer a rewards program or store card to drive customer loyalty and potentially reduce transaction costs.

This is exactly what a Georgia owner of a chain of gas stations decided to do. He created a club program in which members received about 10 cents off of each gallon of gas. The owner spent about $800,000 to create the program and received pre-approval for his plan from the state. But now the state has adopted a new rule and is attempting to prohibit the gas stations from advertising the lower, club member prices.

The gas station owner filed a lawsuit against the state in an attempt to keep his membership program intact. The membership program has enrolled 35,000 members since it began in February. Recently a Georgia judge granted the business owner a preliminary injunction so that he could maintain the program while the lawsuit progressed.

The judge described the business owner as an "astute businessman" explaining that he had become frustrated with credit card transaction fees and had developed the membership system to mitigate those transactional costs. She further explained that the business owner had demonstrated that he would suffer economic harm if the program was prohibited while its legality was being litigated.

While not a final victory the granting of the injunction seems to be a positive step at this stage for the business owner. While it is vital to have the opportunity to pursue your interests through litigation when necessary, mitigating any potential harm ot the ongoing business while the litigation progresses is very important.

Source: Savannah Morning News "Parker gas plan to continue, judge rules," Jan Skutch, Dec. 1, 2011