Cheap Gas Really Gets People Pumped


Forget about a new iPod. Gasoline has replaced it as the promotional gift of choice

The gas promotions started big-time in early May, when Chrysler began offering gas cards to new customers through its "Let's Refuel America" sales program. Buy a new Ram pickup truck or Hemi-powered 300C sedan, and get a card that lets you pay only $2.99 a gallon at the pump. But the gimmick has spread far and wide, to grocery stores, radio stations, and pro sports teams. Even blood banks are using discounted gasoline as a come-on.

"People used to say that gas-related promotions made sense only if you were selling cars, but now gas has become so expensive that we're trading with it," says Kristi VandenBosch, president of Tequila U.S., a subsidiary of New York ad agency TBWA. "It's like Mad Max."

Gas promotions have been popular for years. It's hard to think of something that so many people can use, after all. Harris Teeter, a Matthews (N.C.)-based grocery chain, used a giveaway program back in 2003, when gas cost only $1.72 per gallon. That promotion, directed toward preferred customers, was so successful that the company began distributing gas cards again three years later. "We kept hearing about how high the price of gas was for our customers," said Jennifer Panetta, a spokesperson for Harris Teeter.

Growing Luster

But with gas having more than doubled in price since then—to a national average of $4.08 a gallon on June 16, according to AAA and the Oil Price Information Service—the lure has increased and spread. The New Jersey Nets pro basketball team last week began offering $250,000 worth of "free gas" to new season-ticket holders. The promotion, "It's About Free Gas," was splashed across the Nets' Web site, with the hose of a gas pump snaking underneath a dunking Vince Carter. (It's possible the team's 34-48 record last year has something to do with it being "about free gas.")

Several radio stations across the U.S. are using low-cost gas to pump up ratings. Kansas City (Mo.) radio station Q104 bought $1,000 of gas and sold it off at $1.04 a gallon. "There were so many cars that people started turning around in the middle of the street trying to cut the line," says Mike Kennedy, Q104 program director and morning show host.

Fuel has become so expensive that even nonprofits are using it to lure donors. Karen Kelly, senior director of marketing and communications for the American Red Cross, said the Northern Ohio Regional Red Cross has started holding a sweepstakes competition where, on Sept. 1, one lucky winner will get free gas for the entire year. "People say, 'I donate blood because I want to,'" Kelly said. "But they also say, 'If I win, that's great.'"

Putting Off Cleaner Energy

Some critics say it's not a great idea to give away cheap gas at a time when the U.S. needs to become more energy-efficient. But even Sierra Club spokesperson Josh Dorner said he understood the allure. "Gas incentives are not great," Dorner says. "I would like to have cleaner alternatives, but it is going to take years before people stop burning gas entirely."

Of course, the attraction of giveaway gas may fade if prices moderate. After all, iPod giveaways faded after almost everyone had one of the music players. But that prospect doesn't seem imminent. "We are going to see gas promotions for a long time," said VandenBosch. "Or at least until people decide that something else has more value."

Winfield is a reporter for BusinessWeek.

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