Pump and run - Gas thefts cost $112 million last year

Monday, June 21, 2004

Theft is one of the costs of offering a convenience.

Nationwide in 2003, an estimated $112 million was lost to gas theft, according to information provided by Brad Smith, a manager of four D-Mart stores in Cape Girardeau. The average loss per store, he said, was $1,079.

"It's an ongoing problem," said Jim Mowrer, manager of Rhodes 101, which has 22 stores throughout Southeast Missouri. "Like shoplifting, there is a certain amount of people who will always do it."

Nearly every day Cape Girardeau police report at least one instance of gasoline theft. It is impossible to put a dollar value on the loss because the police department includes gas theft with all other misdemeanor thefts, said Sgt. Rick Schmidt.

Stealing because they can

While gasoline prices are high, Smith and Mowrer say the number of thefts stays about the same. Higher prices don't create theft, they said; thieves steal gas because they can.

If gas pumps are near too many exits from the parking lot to the road, it's easier to steal gas. If cashiers aren't paying attention, someone will pump without paying.

One way stores try to combat theft is with surveillance cameras. Smith said three of his D-Mart stores have the traditional videotape; one has a digital system that allows for a sharper picture for easier identification of the car.

Smith and Mowrer both say the best deterrent is vigilant employees.

At Rhodes 101 locations, Mowrer said, he tries to keep one cashier on a lead register who will watch the gas pump islands closely.

"We have a speaker out there so we can welcome each customer as they get there," he said. "One thing a thief doesn't want is to be recognized. "

That's why at any outlet when a customer comes in, he is greeted and acknowledged. He knows that the clerk is aware of him and what he is doing on the premises. If a customer buys other items, the cashier asks before ringing them up if the customer pumped gas in his car. Sometimes, Mowrer and Smith acknowledge, it's easy to make an honest mistake and forget to pay for the gasoline. Sometimes customers drive off and the stores will track them down by their license plate number. The customers will come back and pay for the gasoline.

"The thing is," Mowrer said, "we don't know when we have one of those who got caught and used the 'I forgot to pay' excuse and will be more careful the next time not to get caught."

Affixed to most pumps are stickers advising customers that if they don't pay and are caught, they will lose their driver's license for a year. Smith said that 27 states passed a law April 20 giving judges the discretion to do that. In Missouri it's mandatory. It remains to be seen, he said, how it much it is enforced.

Some take it personally

While some drivers make honest mistakes, others drive around looking to see which stores have employees who are watching. Some pump the gas, then put the nozzle on the ground before driving off so the cashier thinks the pump is still operating.

"Clerks take pride in their work, and they take theft as a personal offense," Smith said. "We try to train them not to take it personally; if they get too involved it could be unsafe for them."

One way to avoid some theft is to require the customer to pay for gasoline in advance. Mowrer and Smith say that will work only if all gas stations and convenience stores require it. No one wants to lose the customer who will go elsewhere if he has to pay first. Those stores will also lose the sale of impulse items a customer may buy if he has to come in and pay for the gas.

"Any amount you lose bottom line is disturbing," Smith said, "but we can control things to the point where we would not have any sales. We don't want to control that tight."

Prepaying for gas works in metropolitan areas where crime is high and security warrants it and in areas that mandate it because of the financial loss. Mowrer said that customers who come in from large cities prepay in Rhodes locations out of habit.

The advantage to prepay, Mowrer said, is that it allows cashiers to take care of inside customers more speedily and frees up space at the register.

But in this area, Mowrer and Smith said, prepay takes the convenience out of convenience stores. Also, stores can lose money on sales because customers tend to underestimate the amount of gas they need to fill up when they prepay.

The profit margin

Stores need to attract as many customers as possible because gasoline thieves are not the only ones cutting into their profits. An increased use of credit cards for gas purchases does guarantee they will be paid for the gasoline, but an increase in processing fees is cutting into their profit margin.

Rhodes tries to make a 10-cent profit on each gallon of gas it sells, Mowrer said. Smith said D-Mart's margin is between 11 and 12 cents. They get the same margin of profit whether gasoline sells for $1.70 a gallon or 95 cents a gallon. Credit card fees are calculated on a percentage of sales.

"My four stores paid an additional $24,000 in credit card fees in 2003," Smith said. "That's just the increase. If gas prices continue to go up, it would really impact us with credit card usage."

Between the gas thieves and the higher credit card fees, it takes more and more sales of higher-profit merchandise over a longer period of time to make up for the loss.

Eventually, though, it's the paying consumer who makes up the difference.

"It eventually comes back to that," Mowrer said.


335-6611, extension 160

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