C-store operators are increasingly turning to advanced electronics to help stem the time of theft both internally and externally, including “smart” surveillance cameras and Internet-based security systems that can prompt and warn cashiers and track and record every store transaction.

Stuart Levine, CEO of The Zellman Group in Port Washington, N.Y., a nationwide retail and hospitality support company specializing in, among other things, loss prevention, said he has seen an increase in the need for and use of such systems over the past two years. He credits the change in the economy as the root cause.

“With unemployment being higher it’s harder to pay bills. You have one person in a two-earner family that is now a one-earner family,” Levine said. “As a result, theft is going up. We’re seeing more voids, more refunds, more comping of checks.”

The latest systems, Levine pointed out, are able to “stay up with the changes on gift cards versus gift certificates, and ATM-style transactions versus Visa and MasterCard. They let you differentiate a debit card with a PIN-plus versus a standard credit card.”

Coming next, Levine expects all transactions will be Web based. “Right now many retailers are basically accessing data through the Internet, but lack an application that lets them do some important things,” he said. “So as long as you have a username and a password and you know which IP address to go into, you can access the data. You just can’t run as detailed a report. You can’t do the query-building functions, so you’re limited to what’s available.”

These newer Web-based systems do a solid job of combating employee theft, with surprisingly short payback periods. One of the key questions for retailers to consider is, “How much of the data do you actually pull back from the store to the corporate office?”

“If you pull all of the transactional data down to the details of the SKUs, these systems are very, very beneficial,” Levine said. “When you’re not pulling enough data back, it’s harder to substantiate fraud from policy and procedure.”

Operators typically don’t have much of a need for such a system until they hit 10 stores. Depending on the number of locations and transactions, systems can be priced at $90,000 and up. ROI can be as little as 90 days. “Employees,” Levine said, “can get 80% up to speed in a matter of weeks. The rest is learning over a period of time, especially on the query building side.”

Interactive and E-Z
Texarkana, Texas-based E-Z Mart Stores’ digital surveillance system is a comprehensive system that monitors employees and transactions 24 hours a day.

“We have the ability to dial into the security system from any place around here—our offices, laptops or all of our stores,” said Dale Sides, vice president of maintenance and construction and, for a decade, its vice president of loss prevention. “We have POS interfaced with it, so we can actually watch the store live and see what’s being rung up.”

E-Z Mart has gone from a DVR (digital video recorder) type of system to an iVR (information versatile disk) system. It’s also gone from analog to digital with its security cameras in all 300 stores. The system now also includes interactive monitoring by Wesec Intelligent Surveillance.

Interestingly, the main reason E-Z Mart installed this state-of-the-art system was not so much to eliminate theft and generate savings.

“We installed this for the benefit and the safety of our employees,” Sides said. “The biggest function, and the reason we went with it, is that it is interactive. The other monitors included a silent alarm—you hit the panic button and the police are dispatched, but they show up not knowing anything about what’s happened.”

Because E-Z Mart’s system is interactive, now when an employee hits the panic button, a live person instantly dials in, so someone can see live what’s going on. “When they call the police they can actually give them descriptions,” Sides said. “The video and audio components are tied in.”

One of the results of using the system is that employees feel a lot safer because they’re able to hit that panic button and turn around and know that there is someone who can talk to them.

Years ago, “some of the states said you had to have two employees on night shifts. But if a crime is being committed that could simply mean that you’re putting two people in danger,” Sides said. “With the current system, when something happens we eliminate a lot of problems just by activating the panic button.”

Software, Surveillance and Statutes
Ruben Baca, executive director of the New Mexico Petroleum Marketers Association (NMPMA), said his members are using Internet-based security systems, at least in part, because of alcohol sales.

“In New Mexico, if a store is cited too many times in a 12-month period for selling to a minor or somebody who is obviously intoxicated you could basically lose your ability to sell alcohol. They’ll jerk your license,” said Baca, whose association includes 54 petroleum marketing members representing 400 retail locations.

C-stores in New Mexico have a state statute requiring cameras at every entrance and exit, and on the cash register.

“There are cameras on the exits and entrances and the cash register, and some are outside now watching the pumps. They’re just there to protect you and your employees,” Baca said.

Another statute dictates that stores can’t have more than $75 in cash in their registers. Additionally, store employees go through a training exercise on safety and what to do in case there is a robbery, a rule that has been in place for nearly four years. The association actually went to court to fight the statutes. “We didn’t think the state had the authority to do that without a statute,” Baca said. “Of course, we lost.”

Also helping c-store operators are innovative cash registers that include prompters that draw employees’ attention to age-restricted products like cigarettes and alcohol. “So whenever you scan the product it automatically tells you that you have to look for an ID,” Baca said. “The systems absolutely cut theft.”

One trend Baca is noticing in New Mexico is more marketers investing in security cameras on the cash registers. “Our biggest losses are from employee theft. It’s not people coming in and robbing us. It’s the employees stealing—going out the back door with a case of beer and giving it to his friends, or his friends coming into the store and thinking nothing of grabbing a Coke,” Baca said.

The New Mexico association has been calling on state bureaucrats to increase the $75 limit of cash that can be kept on hand. When gasoline was $3.20 and diesel was $4 a gallon employees were dropping money after nearly every cash transaction.

“Having to drop cash so many times not only takes up employees’ time but is inconvenient for the customer,” Baca said. “He’s standing in line while your employee is trying to deposit cash according to company policy, and the whole time he’s asking himself, ‘What’s taking so long?’” CSD