Charleston, W. Va. ? When gas station manager Roger Randolph realized it was costing him money each time someone filled up with $4-a-gallon gasoline, he hung a sign on his pumps: “No more credit cards.”

He may be the first in West Virginia to ban plastic, but station operators nationwide are reporting similar woes as higher prices translate into higher credit card fees the managers must pay, squeezing profits at the pump.

“The more they buy, the more we lose,” said Randolph, who manages Mr. Ed’s Chevron in St. Albans. “Gas prices go up, and our profits go down.”

His complaints target the so-called interchange fee – a percentage of the sale price paid to credit card companies on every transaction. The percentage is fixed – usually at just under 2 percent – but the dollar amount of the fee rises with the price of the goods or services.

As gasoline tops $4 a gallon, that pushes fees toward 10 cents a gallon. Now stations, which typically mark up gasoline by 11 to 12 cents a gallon, are seeing profits shrink or even reverse.

Scott Zaremba, owner of nine Zarco 66 stations in Lawrence, Olathe, Ottawa and Paola, is trying to figure out a way to shift consumers into paying cash, or even opt for debit cards – which carry lower fees for stations.

But with 80 percent of his transactions being conducted on credit, he knows he’s facing a daunting challenge.

“It’s killing us,” said Zaremba, who says that credit companies now make more money on his fuel sales than he does. “It would not bother me one iota to go ‘cash only.’ The only problem is, the consumer can’t do that. The consumer doesn’t carry that kind of cash. They’ve created a credit-driven society.”

Making matters worse: Credit companies place a $75 limit on pay-at-the-pump transactions, which can force owners of large vehicles into making two purchases during a single fill-up.

With stations typically paying credit companies a flat fee of 10 to 12 cents per transaction – on top of the percentage rate paid as interchange fees – and credit companies are banking even more money from station owners.

“They double-whammy us every time,” Zaremba said.

Back in West Virginia, Randolph’s small operation would yield a $60 profit on gasoline sales during a good month. But that’s been buried as soaring prices forced the station to pay about $500 a month in interchange fees.

“At these prices, people aren’t making any money,” said Jeff Lenard, spokesman for the Alexandria, Va.-based National Association of Convenience Stores. “It’s brutal.”

Lenard’s group reports convenience stores paid roughly $7.6 billion in credit card fees last year, while making $3.4 billion in profits.

The way interchange fees are structured has long annoyed retailers, prompting calls for relief.

Legislation pending in the U.S. House and Senate would allow merchants to bargain collectively with major credit and debit card companies.

The National Retail Federation says gasoline prices point to the unfairness of the system: Stations are paying more in interchange fees because the price of fuel has gone up, while the cost of processing credit or debit cards remains the same.

“We have always contended that it doesn’t cost Visa and MasterCard any more to process a $1,000 transaction than it does a $100 transaction,” said J. Craig Shearman, vice president of government affairs at the retail federation.

The credit card companies say fees are just part of the cost of doing business.

MasterCard has capped interchange fees for gas purchases of $50 or more, said company spokeswoman Sharon Gamsin.

Accepting MasterCard also gives gas stations “increased sales, greater security and convenience, lower labor costs, and speed for their customers at the pump,” Gamsin said.

Visa argues that the fees are offset “by the tangible benefits to stations and their customers, such as the ability to pay at the pump,” the company said in a statement.

Absent congressional action, stations are seeking other relief, including discounts to customers who pay in cash.

Shipley Energy, which owns 23 Tom’s Convenience stores in Pennsylvania, has partnered with a new credit card company, Revolution, which charges smaller interchange fees.

Bob Astor, wholesale fuels business manager for Shipley, said those savings get passed on to customers as cheaper prices at the pump. Customers who pay with the card get an automatic 10 cent discount.

Stations in South Carolina, Georgia, Maryland, New Jersey and Arizona are among those offering cash customers a discount, with savings from four cents to 10 cents per gallon.

Zaremba admits to having considered such a program, but fears the repercussions.

“I’ve considered the possibility of a cash discount, but I don’t want to make my credit card customers unhappy with that,” he said.

The experiment at Mr. Ed’s Chevron, though, has paid off.

The station has been in business for 44 years and the ban on plastic hasn’t scared many people off, Randolph said.

“We’ve got generations of customers who come here,” he said. “Most of them have accepted it.”