The High Cost of Gas Theft

Discussion
Aug 24, 2005
George Anderson

By George Anderson


Based on the numbers, Jeff Lenard is right. The National Association of Convenience Stores’ (NACS) spokesperson told The Associated Press, “As the price of gas climbs, people’s values decline.”


The numbers certainly bear Mr. Lenard out. Last year, retailers lost more than $237 million due to gas theft, more than twice the dollar amount stolen in 2003. This year’s numbers are expected to top the 2004 figure.


While the financial losses are significant, there are also far too frequent human costs associated with gas theft. A case in point is the death last week of an Alabama service station owner, Husain “Tony” Caddi, who was run over by a driver seeking to avoid paying the $52 it cost to fill his/her SUV.


To cut down on theft and protect workers from the senseless type of violence that took Mr. Caddi’s life, many station operators have begun requiring customers to pay for gas in advance.


Mr. Lenard and Sam Turner, president of Calfee Co., which operates 114 Favorite Markets convenience stores in the Southern U.S., said that there is a financial cost associated with having customers pay in advance for gas. According to the men, prepaying cuts down on customers browsing and buying other merchandise in stores.


Moderator’s Comment: Do people’s values decline as the price paid at the pump goes higher? Is there a solution that allows employers to protect their
employees and gas profits without losing sales in other areas of their retail operation?

George Anderson – Moderator

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9 Comments on "The High Cost of Gas Theft"


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Mark Lilien
Guest
15 years 6 months ago
Gas stations can video the customers’ license plates, the cars, and the customers themselves. If the tapes (or computer hard drive files) are saved, they can be shown to the police. Stations can have monitors in clear view of the customers showing everyone that a record is being made of all transactions. In New York City, the police will not do any follow-up on retail theft (including holdups) unless the store has clear video records. Gas stations could also use large video screens with ads for their merchandise (steaming cups of coffee, donuts, beer, etc.). The screens could be set up outdoors, so customers could watch them as the fill-ups occur. If the screens have weather and traffic and news subtitles going across the bottom, they will be even more effective. As gas prices skyrocket, theft increases because of the greater incentive and the anger generated. Maybe gas stations should post their net profit per gallon compared to the others in the supply chain (producer, transporter, refiner, taxes, bank fees) so customers could see where… Read more »
Dean Cruse
Guest
Dean Cruse
15 years 6 months ago

Unfortunately, there is always a segment of the population that will stoop to theft. And, the high gas prices can push some people over the edge. But, Sam and Jeff are right – that prepaying can actually decrease the amount of time consumers will spend shopping for other items. If anything, prepaying angers consumers and will likely entice them to go elsewhere for gas where they don’t have to prepay.

Other convenience chains have put representatives at the forecourt to provide various valet services, take an order for food or a drink, suggest an in-store visit and generally promote consumer goodwill. Will the added costs of these services offset any performance gains? Maybe not in the short term, but the consumer loyalty they may reinforce can only help over time.

Michael L. Howatt
Guest
Michael L. Howatt
15 years 6 months ago

Depends on what you mean by values. If you mean – do more people turn to crime as a method to get gas? – I really doubt that is true. It’s more likely that those already on the criminal side just do it more frequently.

What’s more likely to happen is that the general public will alter their behavior, taking fewer “unnecessary” trips and, therefore, spending less on gas. The real problem for C-stores will be the impulse purchases associated with gas purchases. I would recommend some special deals on goods sold (with the help of the manufacturers who are also losing money) to entice customers to at least go inside the stores.

Ian Percy
Guest
15 years 6 months ago

First, let’s be clear – people’s values don’t “decline”; they are “revealed.” People’s values are people’s values. When people behave in these ways – killing someone for $52 worth of gas – that’s their values at play. That’s them. They are simply revealing more of who they are. In fact, everything we do, in public or in private, reveals who we are and what values we hold. Watch some guys play golf and you’ll know what I mean. We’ve got to start being honest about how we think and the mind-sets we cling to. In the long haul, only when our thinking changes does our behavior change. As the ancient proverb says, how we think, so we are.

David Berg
Guest
David Berg
15 years 6 months ago
I’ve been using pre-pay stations so long, I’d almost forgotten that there are still stations that don’t require pre-pay. Personally, I appreciate the convenience of pre-pay. It cuts the time in half it takes me to get gas. But yes, that is time that I’m not spending standing in line in the store where I might buy something. Station owners should install pre-pay systems. I think most customers prefer being able to pay at the pump. (I avoid stations without pay at the pump, and tend to get mad when I’m forced to go inside to pay.) It’s also safer for the employees (which may mean cheaper insurance or other cost savings). So yes! Give up the little bit of extra profit from FORCING the customer into the store, and instead look for ways to lure the customer into the store. Finally, I think it’s terrible that anyone would kill someone for $52 in gas. I’m sure they didn’t start out to kill them, and they certainly didn’t think they’d get caught. Spending years in… Read more »
Gene Hoffman
Guest
Gene Hoffman
15 years 6 months ago

Do people’s values decline as prices rise? Yep! Americans have been culturally conditioned to have high expectations and feelings of entitlement. When thwarted by higher prices at the pump or for the table, some folks will rebel and jump the pump.

Gas stations should require cash in advance or credit cards. All stations are in the same quagmire so don’t overly sweat the program.

David Livingston
Guest
15 years 6 months ago

This is an easy problem to solve. Just require everyone to pre-pay. Most people do anyway. Why would someone want to fumble around with cash and have to stand in line? Plus, with all the 3% to 5% rebates on credit cards, its too expensive to pay with cash. You just swipe your credit card and pump. Very simple. If C-stores worry that people will not come in and browse, then put some kind of offer on the receipt that the gas pump spits out. Grocery stores do that all the time to get people to come inside.

Bill Bittner
Guest
Bill Bittner
15 years 6 months ago
It sounds like the trick here is “you have to be smarter than the door.” When I was kid, we had a closet door that would always stick. I would always have to get my father to open it and he would always use that same phrase. I am assuming here that most of the concern is caused by people committing to less gas than they need so they don’t have to make a second trip to the cashier. Rather than fill up the tank, they take $20 worth and don’t worry about going back inside. So the question is how do you give change to people who have filled up their tank? The simple answer is for each pump to operate like a vending machine and give change, but I guess the time it would take to service all those pumps and make sure they have change and collect their cash would be prohibitive. Another solution would be a separate pay station near the pumps that takes cash, issues a “temporary credit card” and… Read more »
Mark Burr
Guest
15 years 6 months ago
Solutions are relatively easy, yet don’t come without a cost both to the consumer or the retailer. Remember, all costs are passed on. The costs of the drive-offs are added cost to the rest of us, as are the security and prevention costs. Security systems are much more sophisticated today and cameras are much better and more cost effective. New systems can read even the expiration date on the small sticker on the license plate! Yet, it’s an investment. The next – limiting payment options? Yes, it can be done but it limits service and impacts convenience to the customer. Not a serious impact, but there is an impact, nevertheless. Bringing all customers inside is an option, but impacts customer service and requires more staffing. Both add costs to the retailer on even a slimmer margin. Difficulties also exist in ‘pre-payment.’ First, for debit transactions, the debit card used at the pump is typically pre-authorized for a minimum of $50.00. Now, due to pricing increase (45% in less than a year), the current $50.00 in… Read more »
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