When you get a new job, there is a learning curve that you go through until you are fully aware of how everything works.

What would you do if your new boss instructed you to set prices on gas higher than the competition even though you explained that this would result in a drop in sales?

That is what happened to the new manager in this story, so he raised the prices and his store predictably lost tens of thousands of dollars, eventually causing his boss to change his mind.

Check it out.

Sure, we can try to make money on gas.

This really wasn’t a gas war but the convenience store I managed was in the country a couple miles from one that was right off the freeway.

They dictated the price and it didn’t really matter what my prices were but I had to keep my price even or a couple cents lower than them to keep customers walking into my store.

A little background.

I was the grocery department manager in a large supermarket for this company.

I got offered the job at this convenience store because my bosses knew I was getting antsy.

At the time the company only owned 4 supermarkets and they told me that they weren’t looking to open any others (In the next 2 years they opened 4 more supermarkets).

In other words, this was my shot at managing a store, plus it was a couple miles from where I grew up.

No reason not to take the promotion.

I was hesitant about taking the job but whenever they offered you a promotion, you took it because if you didn’t, you would never be offered one again.

Moving from a large supermarket and ordering product by the pallet to a small store and ordering it by the half case was a lot to take in and get used to.

Eventually, I was finding my footing by hit or miss; learn from my mistakes.

One thing I had to learn about gas pricing was how willing people were to travel miles to save a cent or two on a gallon of gas.

Even my own dad, who lived 2 miles from me, wouldn’t get gas at my store if I was higher.

I had to keep a constant watch on the other gas station to make sure my prices were in line with theirs.

I did this mostly by driving by there when I took deposits into town.

This seems like a smart move.

Most of the time I was keeping my price one penny below theirs.

My store’s owner didn’t like this though.

I kept convincing him that keeping my price in tune with the other stations was important to the rest of the store.

Eventually he started lecturing me about how much the gas storage tanks had cost, how much the pumps had cost, and how much the lighting had cost.

He ordered me to keep the price 2 cents higher than the other station.

Okay, I tried, but what could I do.

He just didn’t realize that he needed to keep level with the other station in order to sell the profitable items that were inside the store.

This must have been very frustrating.

From then on, I made sure my price was 2 cents higher, but I was also going to keep track of my sales over the coming months.

I let it go on all summer, the summer of despair.

At the end of summer, I had my ammunition.

Gas sales had dropped by half or more, but more important, so had our sales from inside the store.

I’m going on memory now so my totals are probably off somewhat.

This was in the 1990’s.

The total sales for the store were probably down $20,000-$25,000 and the profit he made by selling gas 2 cents higher were maybe a couple hundred dollars.

Wow, he really should have noticed this sooner.

So, he spent $25,000 in order to make $200.

In September, I went in with my information and explained it all out to him and he relented.

He allowed me to stay at the same price as the other station.

Once I did that, the business came back.

Not enough to save that gloomy summer though.

How could he not know that keeping prices on gas low is what drives people in?

Read on to see what the people in the comments say about it.

This is exactly what was happening.

If they are willing to see it.

It really doesn’t make sense.

This person has worked in gas stations a long time.

Why hire managers at all?

At least he learned his lesson.

You can’t always say that.

If you liked this post, check out this story about an employee who got revenge on a co-worker who kept grading their work suspiciously low.