New Priceline Service Tackles Rising Gas Prices

Name-your-price pioneer Priceline.com (Nasdaq: PCLN) announced today that it will spearhead the Internet's effort to deflate rising gasoline prices in the U.S. by introducing a service that could allow consumers to save 10 to 20 cents per gallon at local major-brand gas stations.

The Stamford, Connecticut-based company said its WebHouse Club affiliate will mail gasoline reduction cards to Priceline's four million members in preparation for the launch of the new service. The name-your-price service is free, and is available to anyone who signs up on the company's Web site.

50 Gallons Per Household Per Month

Consumers will be able to submit their price request for up to 50 gallons of gasoline per household per month, the company said. If the price request is accepted, the customer pays by credit card and receives a card from Priceline that can be used at participating local stations across the United States.

The company said it guarantees that users will pay a price lower than the one advertised on the pump, and will refund a user's credit card if the price is higher. Participants will be locked into the agreed upon price for the one-month period.

Priceline also said it will automatically refund the price of any gasoline that is not pumped to the user's credit card.

"This is the perfect time for consumers to do something about the price of gas," said Priceline.com founder and Vice Chairman Jay Walker. "It's the battle of the titans -- the global Internet versus global gas prices. OPEC was a force to increase the cost of gas. Now, the Internet is the new counter-force to lower it."

Grumbling at the Pumps

If nothing else, the new service seems to show that Priceline and its affiliate are responsive to consumer concerns. Gasoline and home heating oil prices in the U.S. have shot up over the last few months, and consumers are grumbling loud enough to get a response from both the private and public sectors.

Priceline is hoping to make some money with the new service, of course. The company said that participating gas stations will pay WebHouse Club a few cents per gallon in order to drive customers to their stations.

In addition, the company said it expects to generate new advertising for the service on its site, and that 100 national sponsors will contribute to the gas purchases in return for customers agreeing to try their products and services.

Finally, Priceline said it expects that major oil companies will support the new service in return for getting new customers and issuing their own proprietary gasoline credit cards.