Convenience Store Economics

I stopped by the 7-11 yesterday for the first time in years. I was thirsty and wasn't willing to wait until I got home for a glass of water. I grabbed a $1.59 bottle of Aquafina and headed to the checkout stand.

A woman and her two teenage daughters were in front of me. They were purchasing three Big Bite hot dogs, a Slurpee, and a couple pieces of candy. From the way they acted, this seemed to be routine for them. They knew where everything was and how much it cost. There was some confusion at first as to the price of the Big Bites, but the woman was right and the clerk was wrong. The total bill was $7.21.

The woman me ran her credit card through the machine. “I'm sorry, ma'am,” said the clerk. “That card was declined.”

The woman frowned and whispered to her oldest daughter, who then rummaged through her pockets and handed her mother some change. The woman turned and asked the clerk, “Can I put part of it on credit and pay for part of it with cash?”

“Er, yes,” said the clerk. “But the card was just declined.”

“Oh, I have six dollars on the card,” said the woman, and she ran it through again. Sure enough, the card was accepted for six dollars. She paid the remaining $1.21 in cash.

While I waited for the transaction to be completed, I examined two signs taped to the cash register. The smaller of the two read: credit not accepted for lottery transactions. The larger sign, which was hand-printed, declared: lottery tickets cash only. I felt like I was in another dimension, a dimension where charging lottery tickets was an acceptable investment strategy, a dimension where people knew to the penny how much room they had left on their credit cards.

As the woman and her family left the store, I wondered what sort of advice a person could offer them that might have any practical use. I wondered what their future might be like. What would the woman do now that she had reached her credit limit? And why was she buying her meals at 7-11? There's a grocery store across the street.

After paying for the expensive water, I climbed in my car and drove away. As I pulled out of the parking lot, I spied the woman and her two daughters sitting on a sidewalk in a nearby alley, munching on their Big Bites and sharing the Slurpee. They seemed perfectly content.

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TheBeast
TheBeast

What if the lady was not using a traditional credit card, but a gift card of some sort? I have received prepaid cards as gifts and split a purchase with cash and the card, just like the lady you mention. If it was a traditional credit card, you have to commend her for at least knowing what her outstanding balance was.

Jared Harley
Jared Harley

Scary, ain’t it? My wife just hates/can’t understand some people in our area. We have a large Hispanic immigrant population that is mostly lower income. The neighborhoods are usually older, very run-down looking, the yards are all dirt, etc – pretty stereotypical-looking. Yet, parked in the driveway is a shiny, brand-new Cadillac Escalade with rims and a huge sound-system. What worries me even more is that we’ve had a huge problem around here lately with companies taking advantage of the immigrant population – they’re given mortgages they don’t qualify for and can’t afford for more than 6 months, and then… Read more »

Plato
Plato

I read your response and looked at the date. Looks like you made a prediction! It is now 2012 and what you thought DID in fact happen… The Great Recession.

Mark S.
Mark S.

It’s possible that it was a gift card instead of a credit card. In that case, she wasn’t charging the merchandise.

But the bigger question is why did she swipe the card for $7.21 if she knew that she only had $6 on the card?

Eric
Eric

Just to play Devil’s Advocate here, are you sure she was using a credit card and not a gift card? I get these from time to time and tend to know down to the penny how much I have on them. I also tend to use these for things that I wouldn’t use my own money on.

Arthur
Arthur

Are you sure it wasn’t a prepaid gift card? Most banks offer prepaid cards that work through Mastercard/Visa with stored values. You can easily check these balances online and know how much is remaining. It won’t let you charge any amount after that. Be careful of this quick rush to judgement. These cards may be an intelligent way to manage credit card spending by pre-specifying how much you have to spend, while allowing you the convenience of only carrying one card. Besides, $7.21 paid for a nice snack, drinks and additional extras for three people. For a little less than… Read more »

Minimum Wage
Minimum Wage

I toil in a convenience store and this sort of thing happens a lot. It’s not uncommon to see cards declined. One time a 20-ish young woman came up to the counter and while I rang up her bottled water, she said to her friend, “I can’t believe I’m spending my dope money on water.”

Marketing people probably have a profile of the typical convenience store customer and it probably isn’t pretty.

J.D.
J.D.

It’s true that much about this woman’s transaction puzzles me. I suppose it’s possible that she was using a gift card (for 7-11?). But, as Mark wonders, why would she try to use it for $7.21 if she knew she only had $6? For that matter, why would she use a credit card for $7.21 if she only had $6? Do credit card companies really keep that tight a clamp on their users? I seem to recall going overlimit many times back when I carried one. I just got charged an extra fee and had to pay the excess. Are… Read more »

Shaz
Shaz

Not sure what the importance is of knowing the ethnicity of the previous commentor’s neighborhood is to this post, but whatever. Back to the post: It’s totally natural to wonder about the situation for that family. Seems to me they are used to living in the edge, financially. I’m willing to bet that the mother is perfectly cognizant of the grocery store across the street, however she could be equally aware that she probably couldn’t get enough in that store for what she could get at a 7-11. They were eating their food in an alley, what if whatever she… Read more »

Don
Don

I’m with the above people on the gift card. It could also be a flavor of debit card; some assistance programs restrict themselves to ATM/Debit cards now. As far as why at the convenience store and not the grocery – depending on what level of crap you are willing to eat it’s possible that she WAS eating as cheaply as possibly. Doesn’t make it healthy but then again there was a time in my life where I had to eat rice & onions for three days before I had cash for groceries again… The lotto ticket thing is indeed disturbing,… Read more »

Don
Don

Left off something I meant to say – if it’s an assistance program card (or even something filled by a parent or friend) then she could very well know the amount down to the penny and still try to use it – perhaps that was right on the cusp of when new money normally goes in and she was going to try it before falling back on digging for change.

mapgirl
mapgirl

JD, some people get their paycheck in debit-style cards. My company offers them. I’ve done split transactions at the grocery store on my debit card and with cash in my pocket if I didn’t think I had enough cash in my checking account that visit. BTW, all lottery tickets are always cash only. I can’t think of a state that allows people not to use cash. In fact, in PA lottery sales are a separate register/till in many stores. I know it is at my parents’ store. That’s to keep the lottery cash flow separate from the store’s revenue because… Read more »

Elissa
Elissa

I’ve never heard of a credit card being declined for a difference of $1.21. And for that matter one being decline for insufficient funds and then immediately being approved. Credit card companies would be more than happy to let you go over $1.21 and then charge you $35 for going over your credit limit. The same for debit cards and banks. But they’re also very skittish about fraud. If you swipe your credit card at the gas pump and enter your zip code or pin, you only get one shot, after that you have to inside and sign the receipt… Read more »

Lazy Man and Money
Lazy Man and Money

I was wondering if it was pre-paid debit card. I’ve seen a number of those and it’s pretty easy to know how much you have left.

Ben
Ben

I’ve used my credit card to buy lotto tix occasionally. I live in Michigan.

…might have been a debit card though. I forget.

Kuz
Kuz

This reminds me (a little bit) about something I saw in a free local paper I get delivered weekly to my house. There is a section for people to anonymously sound off on anything that is on their mind. The one I saw on the front page today was from someone complaining about well-to-do senior citizens coming to bingo halls because it was taking away opportunities from younger people with kids who really need the money. I sort of sat there, trying to take it all in… that someone out there is looking to bingo as a viable way to… Read more »

Joe
Joe

It is interesting to speculate on others behaviors and it is also interesting that we tend to assume negative rather than positive conclusions. Maybe the lady and kids had no food and only $6.00 and change to get a meal. Maybe there was no electricity on to cook. We’ll never know. Your point on wasting $ at convenience stores is quite valid.

Karen
Karen

I’m actually more concerned about the nutritional value of their dinner than the economic value. Yikes!

Even so, seven dollars and change for a couple of hotdogs & a slurpee is scary, regardless of how they paid for it.

Grace
Grace

Reminder to blogger & some commenters:
Not everyone has the same life you have. Not everyone has a house and stove to go home to. Not every card swipe is a credit swipe – regular ol’ bank accounts are tied to these now, too, let’s keep in mind. One had better hope that folks know down to the dollar what’s in their bank accounts, regardless how one feels about their purchases.

Assuming everyone has one’s exact same means and situation is an ill that will pollute even the most well-intentioned and useful advice.

Adam
Adam

Grace, part of the point was that convenience stores aren’t very conducive to smart personal finance decisions to begin with, but rather convenience at a cost. If someone doesn’t have a house or a stove to go home to, then frequenting the 7-11 may very well be a contributing factor; and unlike other unfortunate circumstance, these behaviors do deserve to be questioned. If for no other reason, then because we all fall prey to the convince store urge from time to time. As for the credit card vs. debit card line of thinking… doesn’t most banks these days like to… Read more »

Jay S
Jay S

7-11 is scary no matter what. As far as charging lottery tickets, I understand why they don’t do it, but I have tried. That being said, I basically put everything on my credit card. A few years ago I charged my rent! Why? Because i treated my credit card like my bank account. I kept a register and recorded every payment, and never spent more than I earned, and never carried a balance. The card is a cash back rewards card that would give 1-2 percent back. By paying rent alone i would get 50-100 back every year.

COD
COD

A little off topic, but the negative attitudes about convenience stores are a little outdated. Most of them are far more competitive price wise than they used to be. For example, a gallon of milk at the WaWa near my home is cheaper than a gallon of milk at the Ukrops grocery store across the street. Further, the Deli at WaWa makes a mean sandwich – far better than Subway for about the same price.

Jessica
Jessica

I play lotto occasionally, but they won’t let you use a debit card in Texas. I am without cash 99% of the time, so it’s probably for the best.

turtle
turtle

I’ve been a mailman for 25 years. For the people trying to explain this away; get over it. Every route I’ve been on has had at least one homocide on it-the joke in office is if I bid a route somebody is going to die. Low income people live this way, adjust! By the way I work in a majority white town. It’s about your choices you make in life. I known it’s Friday by the line outside the liquor stores.

Afloat
Afloat

Look, it’s a testament to how kind and understanding most people are that a few posters have rushed to this woman’s defense. But look at the situation for what it is. Yes, there is a very slim chance that she does not have a stove. It is significantly more likely – and I think that deep down we all know this – that she was just making an unhealthy/ poor economic decision for her family. Even if it was a gift card (sounds like it was) and even if she had no stove (unlikely), candy would not have been the… Read more »

Grace
Grace

Adam: That’s rather my point. No one here knows that individual’s precise situation, and yet there are quite a lot of shoulds being handed out.

Yes, give advice, good advice, and keep doing it. And learn from the mistakes of others, certainly. But don’t _judge_ others based on *your* values, circumstances and experiences when there’s absolutely no way to know that individual’s situation beyond the tiny hint seen in the momentary crossing of paths.

It’s always intriguing to me how agitated complete strangers get over other people’s money, particularly folks who are still learning how to take proper care of their own.

Sarah Clark
Sarah Clark

Actually, sounds more like a food stamp card to me, based on your description of the transaction. even most debit cards will happily let you go over your limit so they can sock you for that $30 overdraft fee (or so I’ve been told…).

Patrick
Patrick

There are some companies that now issue paychecks directly to a prepaid debit card. This form of payment is great for those without checking accounts. It is possible that is the case. I also understand from JD’s point of view. It is very difficult to know the full situation, but from the outside looking in, it does not look like a situation most people would prefer to be in. I don’t think JD’s intention was to judge this woman and her daughter, but rather, to bring attention to the fact that some live under different economic circumstances. The title is… Read more »

Cheryl
Cheryl

Remember that “declined” doesn’t automatically mean you are over your limit..it could be a late payment, or fallem behind in payments. And, I could be wrong, but I do not believe you can use a “food stamp” debit card for slurpees and candy bars at 7-11. But, if you can, that needs to be changed immediately!!

Shaz
Shaz

But the thing is, Afloat, you don’t know. All you have is pure conjecture. And really, what does anyone get for that? Just the continual perpetuation of judgements and stereotypes based on very little information. There are very little facts here, but some people feel the need feel the need to fill in the gaps with their own limited experiences, views, and yes…biases as if it were fact. I think this post says a lot more about commentors to it, than the family it’s about. It’s always intriguing to me how agitated complete strangers get over other people’s money, particularly… Read more »

John
John

What puzzles me is why *you* didn’t go across the street if the water was cheaper at the grocery store.

J.D.
J.D.

🙂

I was wondering how long it would take for somebody to spot my little hypocrisy…

I’m not proud of my $1.59 bottle of water. No indeed.

MVP
MVP

I agree with COD. While there certainly are some undesirable convenience stores out there, I tend to think the vast majority are just regular stopping points for all sorts of people. What I think is great about these places is that they offer goods that are desired by a wide cross-section of the American demographic. Almost everyone needs something at some point that a convenient store offers: Gas (okay, not everyone has a car, but you know…), a twinkie or Ben & Jerry’s at 11 p.m., smokes to feed some folks’ addiction, milk for busy parents who don’t want to… Read more »

hejustlaughs
hejustlaughs

Cod says: “For example, a gallon of milk at the WaWa near my home is cheaper than a gallon of milk at the Ukrops grocery store across the street. Further, the Deli at WaWa makes a mean sandwich – far better than Subway for about the same price.”

Being from North Jersey, I’ve only had the pleasure of visiting a WaWa once or twice and it’s insulting to think of it as merely a convenience store. It’s one of the most well run operations with the friendliest staff I’ve ever seen.

Sarah Clark
Sarah Clark

Cheryl, No, technically you can’t use foodstamps for slurpees and hot dogs at 7-11, but that rule is enforced (i.e. ignored) by the store as part of the agreement they sign when they start taking food stamps. The card system only tracks debits, not an itemized list of what people are eating. Do I think this is a sensible system? not particularly, which is part of the reason I no longer work as a food stamp caseworker. But I also think that was no greater sin than any of us walking in to grab a slurpee and hot dogs. (or… Read more »

A Tentative Personal Finance Blog
A Tentative Personal Finance Blog

My question is… Why are you BUYING water at a 7-11!?

Karen
Karen

Grace, I applaud your compassion and willingness to take differing situations into consideration, but in the end, we are all directing and starring in our own movies. Of course we don’t know the whole story. We project ourselves into a few seconds of someone else’s movie and make judgments based on our own script. It’s human nature. Nutrition is important to me, so that is the framework through which I view the interaction J.D. has recounted. Seven dollars seems ridiculous for food that does not nourish effectively, and it inspires me to think about how I feed my family and… Read more »

[ this is jerry ]
[ this is jerry ]

$7 for 3 “grown” people to “eat” sounds like a pretty good deal to me.

plonkee
plonkee

Over here, we have debit cards that are explicitly tied to your bank account so that the money that is charged has to be in there or it will be declined. Do you have those in the States?

Living hand to mouth as implied has got to be pretty hard. You’d probably want to treat yourself with whatever it was that they bought.

Minimum Wage
Minimum Wage

Yes, in the States we have debit cards which are tied to your bank checking account and the money has to be there in your account to use the card. Millions here can’t get credit cards (except at terrible terms I won’t accept – like a $150 set-up fee plus a $10 monthly fee for a card with a $300 limit, which means you start out owing $150+ with less than $150 of credit available) and most use debit cards. (BUT many people have “overdraft protection” which works like a line of credit you can use up to your limit,… Read more »

Michael Moulton
Michael Moulton

Like everyone else said, it could have been a gift card or a check card. Not being able to buy lottery tickets with a CC does annoy me, because I rarely carry cash and use my Visa check card for everything. I see the reason for the law but I still don’t agree with it; I’m of the mindset that if someone wants to ruin their financial situation by charging thousands of dollars in lottery tickets, that’s their choice. They could just go get a cash advance off the same card and pay cash for the tickets, with the same… Read more »

nic
nic

Grace,
Loaf of bread, jar of peanut butter, 3 apples. Healthier meal, near same price. And when your done you still have half a loaf of bread and almost a whole jar of pb. No stove required.

MoneyChangesThings
MoneyChangesThings

Another theory: it could be a rebate. When I get a new cellphone, the rebate looks like a credit card, but is a pre-loaded debit card. You can check your balance online. (Huge hassle!)
Still, buying junk food, and overpaying for it at that, it doubly unwise.

annab
annab

Like most people have said, it probably was a prepaid gift card. But I don’t know that anyone can assume her intentions for making the purchase. It doesn’t have to be the case that a convenience store meal is her primary way to feed the family. It could just as easily be that she was taking the kids out for a treat, and that’s the place they like to go. When I was a kid, my mom took us to McDonalds, and we’d always get the same things there too (cheeseburger, pop and fries). We knew what it costs, cause… Read more »

Anon
Anon

There do appear to be a lot of variables. Maybe she didn’t have a stove. Maybe she’d already eaten peanut butter sandwiches the last few weeks. Maybe it was a debit card that was soon to be replenished from some source and she was taking her kids out for a treat. Unless you’ve ever been a single mother, you really can’t fault her.

db
db

I don’t think it matters if she was using a debit card, credit card, pre-loaded card, food stamp card, etc. Or what her motivations were. My first thought was $7 and change was ridiculously low for a purchase of 3 hot dogs, a slurpee and some candy. *I* can’t judge this woman because *I* have handed over my credit card knowing that I am bumped up to the limit and *I* have held my breath praying it won’t be declined. Maybe not at a convenience store (but then again maybe so — it’s not like I’ve never stepped foot in… Read more »

dong
dong

I don’t have a problem with passing judgment. It’s nature. The question is what you do with that judgement. Do you use that judgement to look down upon people or do you use that judgement to think about we haven’t been all blessed with the whereabouts to make our lives better.

Karen
Karen

Viewing a situation and making judgments about it is normal human nature. It’s how we define ourselves and our situations. We’re not talking about righteousness. Nobody walked up to the woman and chastised her for her purchase.

As I wrote before, we’re all directing and starring in our own movies. Hopefully, we’re all confident enough in our life choices to handle a little criticism, especially when it’s anonymous.

Trixie
Trixie

This is an excellent post to really make us thing about how we choose to spend our money.

I linked to this one on my blog.

I will be the first to admit that I will buy stuff at a convenience store too, just not even on a semi regualar basis. Why? Because for me, it is a dumb way to spend money, but the times I do go to a C store, I am happy to pay for the convenience.

Take Care,

Trixie

groceriescart
groceriescart

Maybe the woman and her kids were in the mood for a greasy big bite? What’s so wrong about that?

Classism, Healthism
Classism, Healthism

How do you know it wasn’t a gift card? I get gift credit cards sometimes… when I have gift card I always say charge some on this and the rest on this. This situation is familiar. Your water for one person was $1.59. The woman and her two daughters (3 people) paid for a drink and candy $7.21 (roughly $2.40 each). In my opinion that is not that bad. This seems to be a response not on economics, but on classism and healthism. “Oooh, look at the icky poor people suck on their gas-station sugars while I drink healthy fancy… Read more »

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