Making the Most out of Your Giant Gas Points

Participating Giant grocery stores and Shell gas stations in the Washington Metropolitan area have joined together to slightly reduce your gas expenses by ten cents /gallon at Shell gas stations for every hundred dollars spent at Giant grocery stores.  Should you ever really significantly benefit from this savings?  You will probably not.  Assuming you have a ten gallon gas tank, and you always fill the tank when it is completely empty then you will save approximately one dollar on gas for every hundred dollar worth of groceries purchased at Giant.  This is a saving of approximately one percent.  If you purchase a gallon of milk at a price of 3$ then you would save approximately 3 cents.  Occasionally, Giant awards extra gas points on certain specific products, but you must be weary of such purchases as well; because you might not need the product, or you might be able to purchase that product or a similar one for less somewhere else.  The only way that you will gain from such a promotion is if you purchase exactly the same products at Giant grocery stores with the promotion that you would purchase without it.  Few shoppers can actually be that thrifty.  The benefit of changing consumption patterns because of this promotion is negligible. 

 

However, should you wish to take advantage of such a promotion there are several things that you might keep in mind when shopping at Giant or fueling up at Shell.  First, always fill the tank when the tank is as close to empty as possible. Second, never let any of your gas points expire (Gas points expire after thirty days).  Third, try to fill your gas tank on Thursday when gasoline is 5 cents/gallon cheaper than on other days, but do not waste your gas points when the gas tank is not close to empty.  Another strategy might be to only buy gas at Shell gas stations once a month (Before the points expire); otherwise, fill the gas tank at the cheapest gas station.  To most people the market for gasoline is perfectly competitive.  In other words, all types of gasoline are equivalently effective.  Shell gas is negligibly different from the gasoline available at other gasoline stations; some of which are cheaper than the gasoline available at Shell.  Also, when you do purchase gas at Shell stations, always purchase from the cheapest Shell station. 

What types of promotions are similar to this one?  At a fair, players are influenced by the size of the prize.  If the prize for playing a game at the arcade is made more attractive then the players will be better off if they could keep their behavior constant.  The benefit could easily be considered negligible.  However, subconsciously they tend to increase the number of times that they compete at the game; therefore, increasing their losses and also increasing the arcades profits on that particular game.  Also, in the game of blackjack, changing the dealer’s rules of play, such as not allowing the dealer to hit soft seventeen, benefits the gambler who does not alter his play due to this rule alteration.  However, if now the gambler changes his play and “stands” when he might otherwise “hit”, thinking the dealer might have a smaller chance to “bust”, then the benefit of the rule alteration switches to the dealer.  Similarly, shoppers start shopping at Giant and Shell and make purchases that are less attractive than they would have made without the promotion, switching the advantage to Giant and Shell.  There are two dealers, in this case; and they have considerable leeway as to how the profit is split.  The customers lose out.  Giant and Shell manipulate the customers as the dealer manipulates the gamblers in Blackjack, and the arcade influences the players of its games. 

 

Companies that distribute coupons have similar intentions.  They want you to alter your consumption pattern.  Otherwise, they would not behave in that manner.  However, with coupons, the benefit is usually significantly better than one percent.  Therefore, it is possible that both the consumer and the producer may both benefit in the case of distributing coupons.  The benefit of changing consumption in this case is not frequently negligible.  As a result, making a purchase of a product may become profitable to the consumer; whereas, it was not profitable without the discount that the coupon provides.