Shadick's C-Store owner reported to state for selling gas below cost under the Unfair Sales Act
Pat Shadick got a letter from the state telling him a competitor turned him in for pricing gas too low. Shadick, who owns Shadick's C-Store, told the Bloomer Advance the complaint accused his store of selling fuel below "cost" as the Unfair Sales Act defines it. The law, known to most operators as the Minimum Markup Law, bars selling merchandise below cost.
Rather than cut his own price to beat Shadick, a competitor reported him to the state for pricing too low.
How cost gets defined
The mechanics matter here, because "cost" under the statute is not what you paid for the load. It begins with the lower of invoice cost or replacement cost, for both retail and wholesale. You take out all trade discounts. Then you add back excise taxes and freight, plus any other charge the invoice or replacement number does not already include.
Work that through and the floor sits above your raw acquisition price. A statutory markup gets layered on top for the retail sale, so the legal minimum pump price is built, not observed. An operator can be selling above what the fuel cost them and still land below the state's definition of cost.
The problem is that you can price to move volume and watch your margin and still be out of compliance, because the formula includes charges you are not thinking about at the dispenser.
Why a complaint beats a lawsuit
States with minimum markup laws lean on competitor complaints to enforce them, and that is what happened to Shadick. No regulator was clocking his street price. A rival down the road did the math, decided his number was under the statutory floor, and sent it in.
For jobbers and single-store operators, the practical read is that your pricing is being audited by the guy across the intersection, not a state auditor. Loyalty discounts, promo pricing, and loss-leader fuel to pull foodservice traffic all run into the same formula. Discount too hard and a competitor has a paperwork weapon.
What to watch
Whether Shadick's state follows the letter with an enforcement action or lets it sit. The letter is a notice, not a penalty, and how the state handles the complaint will tell operators in minimum markup states how much teeth the law has this year.
Watch, too, whether competitors start using these complaints more aggressively as pump margins tighten. If fuel margin is thin and one operator decides to discount into the foodservice draw, the cheapest counterpunch may be a complaint letter rather than a price war. Operators in the roughly two dozen states with these laws should check their promo math against the statutory formula before a rival does it for them.