Brett Romero is a creative freelance writer & ghostwriter with expertise in finance, entrepreneurship, software and IT.
Shopping for groceries is probably a weekly trip for most of us. Filling up the car might be a twice-a-month trip. Both these trips are costly. But you can cut down on the cost of filling up with the tip I'm about to share with you.
One of the larger grocery stores where I live is Fry's Food (Kroger in some parts of the country). As a Fry's Food member, which is free, for every $1 you spend on groceries, you get one point. After 100 points (or $100 spent), you get $0.10 off a gallon of gas at the Fry's Food gas station.
This is a fairly common way to save. Safeway offers something similar. But $0.10 off doesn't make much difference and you may even find cheaper gas just a few blocks over.
How to Save More
The difference comes in when you take advantage of the periodic 4X (or whatever the local high point promo is) promotion. It's important to catch this high point promo rather than the usual 2X. The high point promo makes all the difference.
Here's how to maximize the amount you can save with this promo. With a 4X promo, you get 400 points for every $100 spent. Even if you don't shop at these grocery stores, you can still take advantage.
Fry's (Kroger) and Safeway both offer gift cards. These range from restaurants to Amazon to Home Depot and Lowe's to a large variety of stores you already shop at. If you already shop at those stores, why not purchase gift cards for them? If you buy $100 in gift cards, you just earned 400 points on the 4X promo.
400 points means $0.40 off per gallon of gas at these grocery store gas stations. At that rate, you aren't likely to find a better deal on gas. To truly maximize your points, at $200, you get 800 points or $0.80 off per gallon. No gas station in your area will beat that rate.
How to Keep Boosting Your Gas Savings
$0.80 off per gallon is pretty spectacular. But you can go even further with a little bit of knowledge on "returns". In other words, ROI or return on your investment (i.e., the gift cards purchases).
Let's say you spent $200 on gift cards and pump in 10 gallons of gas. That's $8 in gas savings (10 x .08). At $2.50/gallon, you would have spent $25 on those 10 gallons. Take off $8 and you're down to $17. But how much did you really save? Let's run a few quick numbers:
8/200 = 4% return. 4% doesn't seem like much but you can do better.
Many cars can take more than 10 gallons of gas. Let's say you pumped in 15 gallons. 15 x .8 = $12. The return goes up to 12/200 = 6%. That isn't a bad deal at all. And now you know the real value of your return.
4% might not be enough to motivate you into using this savings technique. But 6% with basically no risk is pretty unbeatable.
Things to Be Aware Of
You've probably concluded that the more gallons you can pump into your car, the better return you'll have. Of course, you don't want to ride around until the fuel reserve light comes on.
Bigger gas tanks will get a better return than those with smaller tanks. As a general guide, if you can hit 5% or better, you're doing quite well on returns. Even if you only do this once every two months, that's still a 30% annualized return. You aren't going to find a savings account or CD offering anything close to that.
Armed with a little bit of knowledge on returns on a promotion offered by several grocery store chains (Fry's, Kroger, Safeway), you're ready to start earning back some of your hard-earned cash when filling up.