Petroleum retailers are challenged with fuel theft on a daily basis, where the focus is primarily on “drive-offs”, or what is often referred to as external theft.
Prepayment and camera systems go a long way to thwart this behaviour and, in many instances, provide factual vehicle data. However, the smart thief knows how to get around this, and the industry and Police are responding in kind.
Although all petroleum marketers have some form of loss prevention department that deals with external criminal infringements to the business, internal theft is far less talked about.
Internal theft takes many forms: employee or groups of employees, supplier, systemic, procedural, perishable and, the last frontier, “shrink”. As Larry Miller, renowned loss prevention evangelist for Retail Control Group says, ‘You can’t catch your way to lower shrink’.
Speaking more specifically about actual fuel sales at the dispenser, there are a number of ways real sales are lost that fall into the final ‘shrink’ write downs. This then spills over into the daily fuel reconciliation as ‘variance’ that has further consequences for leak detection.
Fuel reconciliation is completed every day across retail petroleum as a day close procedure, where the Sales are accounted for the grade(s) and incoming deliveries are added. From there, simple math identifies what volume of fuel should be in the tank. Then the actual fuel volume is recorded and compared against book volume, which produces the daily variances.
Nothing new, difficult, or intelligent about this. However, a daily variance always persists for a range of valid reasons. Generally, only when the daily variance is higher than expected does it get attention, which is always well after the fact. Larry Miller reports that ‘reducing shrink by 18% produces the same bottom line profit as would a 22% increase in sales’. A 22% increase in sales is an absolutely massive sales task for any business, so a sharp focus on shrink is inherently more manageable!
Technology has marched on at a fast rate, and now it is possible to directly monitor the dispenser (pump) communications independently from all other technology onsite in real-time at an affordable cost.
Fuelscan passively listens to the pump communications loop, not only looking for every individual sales event, but also the entire protocol that detects when a pump goes offline. It also detects many other interesting and useful facts, such as flow rate, authorisation time, price, and price changes.
Sales transactions are then tested against in-tank movement (including volume-level-temperature-water) to support dynamic fuel reconciliation that is pushed to Fuelsuite Cloud every 30 seconds.
To learn more about how Fuelscan and Fuelsuite can prevent shrinkage in your retail network, click here to download your free ebook.
If you would like to learn more about monitoring your Retail Petrol Station in real-time contact the EMS team.