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Shelley Hunter

Is Buying Gift Cards For Gas Rewards Or Fuel Points Worth It?

How many gift cards does it take to earn a free tank of gas?

save on gas
photo credit: Angela Leese via photopincc

Just over ten years ago, the average price for a gallon of gas was under $1.50. In March of 2014, the national average was $3.55 per gallon, nearly a 240 percent increase since 2003. Many major grocery chains have capitalized on consumers feeling this rapid and painful increase by offering fuel rewards. Though marketed to help you save on gas, these programs also increase customer loyalty because shoppers bring all their business to one store in order to collect the rewards, but do consumers really know what they are saving or how much they spend to reap the fuel rewards?

How do the Rewards Work?

Fuel rewards go by different names depending on the grocery chain. At Kroger, they’re called “Fuel Points.” At Safeway, they’re known as “Gas Rewards,” and at Giant Eagle locations in the northeast, they go by the name of “Fuel Perks.”

Regardless of the name, these gasoline programs all operate in a similar fashion. On average, for every $50 a consumer spends at the grocery store, he or she will receive 5 to 10 cents off per gallon of gas. On rare occasions, certain product purchases or promotions can increase the gas rewards discount up to 20 cents off per gallon.

The true amount a consumer saves on fuel rewards is based on three factors including the cost of gas, the cents off per gallon being rewarded and the size of vehicle (how much gas it holds). The size of the car or truck matters because most of these programs only allow you to use rewards on one fill-up before the accumulation starts over.

If a fuel reward program offers 10 cents off per gallon for each $50 spent daily, you could save 2.4 to 4 percent on gas if you are taking full advantage of the program–using rewards before they expire and filling up full tanks of gas.

fuel rewards by car size

At the current gas price of $3.55 per gallon, however, you would need to spend $1,775 in order to get a free tank of gas.


According to the USDA, the average family of four, on a moderate budget, spends $879 to $1,047 per month on groceries. So roughly every two months, a family can get a free tank of gas by fully utilizing their points and for making purchases that they need to make anyway.

Throwing Gift Cards into the Equation

With the popularity of fuel reward programs rising, many grocery chains suggest buying gift cards in order to earn more gas points. The net effect of this promotion is that consumers are going out of their way to buy gift cards for planned purchases simply to increase their accumulated savings. For example, before buying a new appliance at Lowe’s, consumers stop by the grocery store to buy Lowe’s gift cards. Before picking out a big screen TV at Best Buy, they pick up Best Buy gift cards en route. Some consumers stock up on JCPenney gift cards for back-to-school shopping and others stop by the gift card kiosk at the grocery store for Disney gift cards before heading to their Disney vacation.

Since Coca-Cola introduced the first coupon in 1887, consumers have proven time and again that they will change their buying habits to save money. But is buying gift cards to save 2 to 4 percent on gas the best adjustment to make?

Gas Rewards Aren’t the Only Pit Stop in Town

As product or service categories become large enough, secondary markets often form in order to connect buyers and sellers. Stubhub has done this for the ticket industry, AutoTrader for cars and eBay for almost everything else. Last year, consumers in the U.S. spent over $118 billion dollars on gift cards, and this number is expected to increase each year for the foreseeable future. As a result, there is an increasingly active market of sellers who prefer cash for their gift cards, even at a lesser value. These unwanted gift cards are then available to buyers at a discounted rate. That discount per $50 spent could be greater than is achievable with gasoline rewards.

Suppose a midsized-vehicle owner has a home improvement project coming up. In order to maximize fuel perks, he buys a $100 Home Depot gift card from the grocery store for the cost of $100. There is no savings on the gift card itself, but the purchase at the grocery store earns him 10 cents off per gallon of gas which would save 3.2 percent for a full tank of gas or $3.20 for every $100 spent at the pump. In looking at the sample of 12 popular retailers below, however, he could save a full 7.5 percent simply by purchasing $100 in discount Home Depot gift cards. In fact, the savings on discount gift cards represented by this chart are a full $5.53 more, on average, for every $100 spent.


When Points are The Better Buy

In the example above, the consumer pays full price at the hardware store, but saves $3.20 on gas when using fuel rewards. Conversely, he pays full price for gas, but saves $7.50 at the hardware store when using discount gift cards. There are, however, instances when the savings available from discount gift cards are the same or slightly less than fuel rewards. When grocery chains offer double points to increase the reward to 20 cents off per gallon, midsized to large vehicle owners could save between 6.4 and 8 percent, which is better than some discount gift cards. Also, highly sought-after gift cards like Walmart, Target and Apple rarely have discounts above 3 percent. However, unlike gas points, gift cards sold by reputable resellers don’t expire, can be split into multiple transactions and sell for simple discount prices—no points to accumulate, no loopholes to worry about.

So, if you have a purchase to make, research your fuel rewards program to figure out if the gas savings derived from buying gift cards at the grocery store are better than the retailer savings you can get on the gift card exchange market. If the fuel rewards are better, head to the grocery store. But before you do, check your gas tank. Because driving to the grocery store to earn fuel rewards is another cost you could eliminate simply by ordering discount gift cards online.

~~ Mark Romanelli

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