More convenience stores are combining proven practices with the latest technology to keep a handle on their money.
By Pat Pape, Contributing Editor
Back in the 1970s, armed robbery was rampant in convenience stores. 7-Eleven Inc., one of the first retailers to stay open 24 hours per day, hired consultants to investigate ways to thwart such crimes.
As part of their research, the consultants interviewed convicted armed robbers, asking them why they chose particular c-stores to rob and what caused them to bypass other retail outlets. The results should not have been a surprise because experts will tell you that the element that makes c-stores attractive to shoppers, also make them attractive to robbers: convenience.
In particular, robbers reported that stores with “convenient” access to cash made ideal targets. They typically expected to perform a fast, smooth robbery and get away with more than $100 in cash.
MANAGING CASH
After those findings were revealed, 7-Eleven began installing the first Timed Access Cash Controller (TACC) or “drop safe” in each store. Made by the Dallas-based company Tidel, it allowed employees to keep $30 or less in the register while storing large bills and coins in the TACC.
The safe could handle a maximum of $20 every two minutes, permitting store employees to make change for customers who paid with large bills but discouraging robbers who wanted to commit a quick crime. Eventually, the timed-access safe became a familiar tool at all c-store outlets, and it remains a staple in cash management.
“Your control over the money starts before you ever get it,” said Rosemary Erickson, a forensic sociologist, crime consultant and president of South Dakota-based Athena Research Corp. “The No. 1 thing you can do to control cash is to have a drop safe.”
To best manage money, stores should communicate to potential robbers through in-store signage that “we don’t cash large bills, we keep a low amount of cash in the store and we have a drop safe so that when the store receives money, it goes immediately into the safe,” she said. “The average robbery takes 90 seconds, and a would-be robber isn’t willing to wait two minutes [to get money from the drop safe].”
Chris McGoey, a Los Angeles-based crime consultant and security training professional for the c-store industry, agreed. “A timed-access safe is a tool you must have,” he said.
McGoey advised store operators to keep cash levels as low as possible.”Most convenience stores today have decals on the door that say ‘Please pay with smallest bill possible. We accept no bills larger than a $20,’” McGoey said. “Establish your policies and follow through. Every employee thief I’ve interviewed took advantage of lax cash handling policies that the manager did not reinforce.”
Good cash handling can discourage robberies. Potential robbers will often case a location and try to get a peek in the cash drawer to see how much money is available, according to McGoey.
“They may buy something small with a $20 bill to see where that bill goes,” McGoey said. “Any time someone gives you a large bill like a $20 bill, you have the opportunity to demonstrate your store’s cash-handling position. While the customer is present, put the bill immediately into the safe. If you do this consistently on every shift every day, you send a message. And the word gets out on the street that your store is not a good place to rob. Plus, you train your customers. They won’t be coming in with that $100 bill and expecting you to break it.”
BACK TO BASICS
The basic cash management practices developed in the 1970s are still essential to a safe, profitable operation, said Erickson. But some retailers ignore them.
“You still see people counting money at the cash register, and it should never be done there,” she said. “Take it to the back and do it there. Make bank deposits at irregular times, and never follow the same route to the bank. Never carry a bank deposit with you when leaving the store at night. That’s too predictable. Not all stores are open 24 hours, and [for them] opening and closing are the most dangerous times.”
McGoey believes convenience stores should provide thorough cash management training for the entire staff and each employee should be held accountable for the cash in his or her drawer and for handling it correctly.
“If your employees can’t handle cash correctly when the store is busy, and they don’t drop those $20 bills in front of every customer, you need to hire better cashiers or train them better,” McGoey said. “Good cashiers can properly handle cash at the slowest times or busiest times. And not all people are meant to be cashiers. Some people just can’t do it. Take the time to hire the best people for the job and train them fully. Your operation will become more efficient and your exposure to robbery will be at its lowest level.”
SAFER TECHNOLOGY
Over the years, the industry’s efficient drop safe has morphed into a high-tech piece of equipment that can interface with an armored car service, the fuel dispenser, the store point-of-sale (POS) system or the back office.
Several years ago, Rollie Trayte, a convenience retail industry loss prevention consultant based in Scottsdale, Ariz., worked with a team from Circle K and Tidel that developed the Sentinel cash control safe, which features a touchscreen interface, two-cassette cabinet, the ability to print reports and a single- or bulk-note feeder.
“They count bills and make change,” Trayte said of the Sentinel. “They do everything but kiss you.”
The price of a drop safe starts at about $2,000 for a basic version and goes up to $15,000 for one with bells and whistles. Occasionally, refurbished or replaced safes come on the market at prices 25-30% below retail.
Additional cash control technology allows management to open a store’s POS system from a remote computer to review a questionable transaction. “You can tie the store’s security camera recording to any single event in the store involving cash management and figure out where the mistake was made,” Trayte said.
“You can say ‘I want to see all transactions involving beer’ and then review all beer sales for accuracy,” Trayte said. “You can use the digital recording to see that cashiers are on the ball and are asking for IDs for all cigarette and alcohol purchases.”
Establishing a sophisticated system is a big investment, he admitted, but “you have to spend money to make money,” Trayte said. “There are all kinds of financing programs out there to make it easier.”
PROTECTING PROFITS
Today’s convenience store margins are both nominal and tough to earn in a highly-competitive retail environment. That means operators must be extra diligent about managing every bill and coin that comes into their stores.
“Nothing puts profit on the bottom line faster than controlling loss,” said Trayte. “If you have 5% pretax profit, let’s say, and you’ve got rent, maintenance and payroll expenses and then someone steals something that costs $1, you’ll have to sell $20 worth of junk just to cover that loss at 5% and break even.”
Preventing loss—especially cash losses—requires the same due diligence as it does preventing inventory shrinkage.
“Work to save that dollar and prevent somebody from stealing it or making a mistake in counting change,” Trayte said. “There is nothing you can do to put profit dollars to the bottom line better, faster or cheaper than controlling loss.”
