Fed-up by ripoffs, QuikTrip tackling gasoline theft

Monday, August 23rd 2004, 7:46 pm
By: News On 6

TULSA, Okla. (AP) _ QuikTrip Corp., which loses more than $12 million a year to gasoline theft, is testing a new plan it hopes will put the brakes on rip-offs but spare customer convenience at its 444 stores.

The privately held gasoline retailer is requiring customers at two Tulsa locations hit hard by drive-aways to use an identification card at the pump before filling up. If the plan works, and so far it has, the Tulsa-based company will implement the program across its chain.

``Theft of gasoline is absolutely spiraling out of control,'' QuikTrip spokesman Mike Thornbrugh said. ``We as a company are going to find a method to stop it.''

QuikTrip's experiment with the authorization card has virtually ended theft at those locations, Thornbrugh said, and it has competitors long baffled in the battle against thieves awaiting the results.

``I think it's a novel approach, and we'd be curious to see how that goes,'' said Jenny Love Meyer, whose father founded Love's Travel Stops and Country Stores Inc., an Oklahoma City-based chain with 163 convenience stores in 25 states.

Gasoline theft cost the nation's gasoline retailers an estimated $112 million in 2003 out of industry sales of about $221 billion, according to the National Association of Convenience Stores.

It's a cost that's passed on to consumers at a rate of about a half-cent to 2 cents per gallon, the industry says. This year's figures are expected to be worse because theft becomes more common as prices at the pump rise, the association says.

``It's not a conga line of one person after another, but when you service 1,000 customers a day, it can happen pretty quickly,'' association spokesman Jeff Lenard said. ``It happens a couple of times per week per store.''

Gasoline theft has long presented retailers with a dilemma. They can eliminate theft by requiring customers to pay in advance, but that solution repels convenience-minded customers and saps food sales _ a convenience store's highest margin business.

Otherwise, it's up to store clerks to keep a watchful eye on the pumps while they sell sodas, cigarettes and beer inside. The chore frustrates clerks and distracts them from serving customers, the companies say.

Under QuikTrip's experiment, which began about a month ago, customers have two payment options. They can pay in advance with a credit card, or, if they wish to pay after pumping, they must insert a QuikTrip identification card into the slot before pumping. That way, QuikTrip either gets paid first, or it knows who's using the pump.

``It's a new thing,'' said Holly Tuminello, spokeswoman for the Petroleum Marketers Association of America. ``I'm sure it's something that other stores will be watching to see how it goes at QuikTrip.''

It's worked so far, virtually eliminating theft at the two stores along Interstate 244 in Tulsa while generally pleasing customers, Thornbrugh said. But the company wants to get more information before it expands the plan to other stores.

``There's no timetable on this test,'' Thornbrugh said. ``We're extremely meticulous about what we do. Before we proceed any further, we want to make sure that it is well-received by customers, law enforcement and employees, and that it is not well-received by those who steal gas.''

The approach is not foolproof. Thornbrugh acknowledges that thieves could still use fake identification to get a card or steal one from another customer. Any misused card would be immediately deactivated, he said.

``I think that's minute compared to the amount of gasoline theft that's going on,'' he said.

QuikTrip's approach to gas theft isn't the only one. Some stores have experimented with cameras positioned to catch license plates of cars speeding away from unpaid pumps. Others have staff occasionally sell pizzas at the pumps to get an extra set of eyes in the field.

Sheetz Inc., an Altoona, Pa.-based chain of about 300 stores in six eastern states, has been experimenting for about two years with requiring all its gas customers to pay at the pump _ with either cash or credit card.

Theft has dropped dramatically at the handful of stores where payment at the pump is required, but that's just a fortunate but unintended side effect, chairman Steve Sheetz said in a recent phone interview.

Sheetz' goals were to give cash users the same convenience credit customers have long enjoyed, to reduce clutter inside the store and to allow clerks, who are now less distracted, to pay more attention to customer service, he said.

``Why even bring them through the door? Why create the traffic inside, which is really just empty traffic,'' Sheetz said of the roughly two-thirds of gas customers who like to pay inside. ``Just bring in those who are interested in buying'' other items.

Gasoline theft is a problem the industry wants to solve on its own now after receiving help from lawmakers in recent years with tougher penalties for offenses.

But they may not like the government help they're now starting going to get as cities are increasingly looking to require advance payment for gasoline. Milwaukee votes on the issue next month.

``It's something I think you're going to see more municipalities consider,'' Lenard said. ``It's not something that retailers want to see, and it's something that customers don't want to see because it takes the convenience out of the convenience store.''