Gas Pump Drive-Offs Are on the Rise at Convenience Stores

With today's rising gas prices, convenience stores are experiencing a large increase in gas pump thefts. According to the National Association of Convenience Stores (NACS), gas pump theft was a $237 million industry problem in 2004 and is significantly worse already in 2005. The average loss per store was $2,141 in 2004 and with slim margins for operators, they must sell an extra 3,000 gallons to offset each $30 stolen.

To make matters worse, law enforcement agencies do not have the time nor the manpower to investigate and prosecute these types of offenses. These agencies often have strict policies in place that limit the operator's ability to collect money from or prosecute offenders. The only sure method to get results is to have video (preferably digital) showing the offense with the offender's license plate legible.

One Varatec C-Store customer, using sensor feedback and digital video, has developed a unique relationship with their local police department. When a gas pump drive-off occurs stored digital video is accessed remotely, via the Varatec InnerVision system, to retrieve the license plate information. Using the license plate number, the C-Store operator uses a variety of options to quickly obtain the name and address of the drive-off offender.

The offender is contacted with an offer to avoid prosecution if the balance is paid in full. If the offender refuses to pay, the digital video, including the visible license plate, is turned over to the police department as evidence for prosecution. This unique arrangement minimizes work for both the operator and police department, allowing for most efficient recovery of payment. Using the Varatec system, the payment recovery rate rose to 94% and has paid for the initial deployment of the system in less than 8 months.

The problems appear to be getting worse for operators. During periods of price increases, retailers' wholesale costs rise faster than they can recover them at the pump so profit margins are down significantly. NACS reports that gasoline margins in 2004 were 6.9 percent, the lowest level since 1984, and much of the reason for declining fuel margins is price volatility for gasoline. In addition, a disturbing trend of late is the emergence of gasoline theft rings, in which specially designed trucks are used to siphon fuel from stations' underground storage tanks. With Varatec's unique integration of sensors and video, operators now have new tools to fight this growing concern.