Pay up before driving-off
Carol Brennan, manager and owner of Mace/Maxol in Newbridge decided to tackle the problem of drive-offs head-on by installing fully pre-paid petrol pumps and has found the results to be rewarding.
Print13 March 2013
The loss of earnings that Carol Brennan was experiencing due to people driving off without paying for petrol and diesel, meant that she was forced to consider letting staff go to cover the shortcomings. Situated at the end of the busy town of Newbridge, Co Kildare, within a minute’s drive of the M7, she was in the perfect location for people to drive in, fill up their tanks and be out on the motorway before a staff member could even contact gardaí. It had become such a frequent problem that she decided to install full pre-paid pumps, a move that was not overly popular with her customers at first.
"We were looking at our figure on drive-offs and the further and further into recession we got, the higher the amount of people we had that would come in here, pick up the nozzle, fill up and drive off," says Brennan. "If you’re going to drive off you’re not going to do it for a tenner, you’ll do it for €100. It came to the stage where people were driving in in vans and even filling up canisters and driving off. 3% is the average margin on fuel so if we lose €100 a day on fuel, it eats up the profits."
While the introduction of high-tech security cameras was the first measure used by Brennan to tackle the problem, the criminals were well ahead of the technology. "About four years ago I upgraded our cameras to a state-of-the-art system through Tokheim with three dome cameras outside so when you pick up the nozzle, it takes a picture of you and one of your reg, so I thought I’d catch them all with that. But the garda resources are much more limited these days and you can say what you like but they haven’t the time or resources to be chasing your drive-offs. Secondly the amount of false registration plates they chase is unbelievable so it’s a complete waste of time. I’ve a very good working relationship with local gardaí so I’m keen not to badger them as they’re doing their best."
Drive-off is not the only issue
While the main issue for Brennan was with the criminal activity of drive-offs, there was also an issue with customers forgetting to pay or hoping to pay later.
"Then you have another category of people who plain and simply forget. Some of those are accidental and some of them aren’t. It’s very hard to chase customers you know for money," she says.
"The third problem is that we’re a local business trading in the town for years. If you fill up your car and you find you haven’t enough money, the person will come in and say, I know your father or your uncle, I went to school with you, played hockey with you etc. and you have to let that person out the door. But a month later, I’m in the office with a list of IOUs and I have to ring them and ask would they mind coming in and settling that bill. It’s not a nice thing to have to do. You don’t want to insult them if they don’t have the money. There are a lot of genuine people but people get to the end of the month and they have a tonne of bills like electricity, mortgage, school fees and the last person they are going to pay from that list is me. That was really becoming a problem."
While Brennan was spending a lot of time ringing people, downloading CCTV footage and giving it to gardaí and making statements, she decided it was all too stressful so made the decision to change her fuel pumps to a completely pre-pay solution so no one could access the pumps without paying up front. "We toyed with it for a long time and then I decided enough was enough and went for it," she explains.
Cost of turning to pre-pay
The initial outlay is what would discourage many from changing their systems but according to Brennan it’s not that expensive. She says that 90% of her till system was already capable of reversing the action on the till. The only problem is if your pumps are older, you would have to get pre-pay valves on them. "Every time I meet other retailers, everyone is discussing the drive-off issue. I think as an industry we need to take control of it. You pay for everything else up front so we have to educate the public to change their perception of petrol or diesel and like everything else you have to pay for it first. The more it becomes the norm, the easier it will become. There is a solution and once it’s tackled it will be wiped out within six months. The biggest issue is fear of the customer. If it became the norm rather than the exception, customers wouldn’t question it."
Brennan is very honest about the effect it had on her business initially.
"The first month we brought it in, we did notice a drop in sales, especially the shop."
However it wasn’t long before the customers that had left came back. "If you provide a good service for your customer they will come back. People don’t like change and are slow to adapt to it. People told us they would not come back because of the change and yet they were back within weeks. They say it was due to the shock. The younger generation have no problem with it. No one around here had heard of pre-pay so in a way we’ve paved the way for other places now. It’s a mindset we have to change to putting your fuel in first, to putting it in last. I find now that our customers prefer it because it cuts off at the exact price. I can concentrate more on driving my business, than collecting money from people."
Updating your system to prevent drive-offs
Tokheim is the company supplying the security solution for Brennan’s business. The company fits tills, pumps and camera systems for forecourts. Paul Darcy, Ireland sales manager for Tokheim, says it has encountered many customers complaining about the issue of drive-offs from their forecourt businesses. "Over the last five years since we entered this recession the number of drive-offs has risen dramatically on Irish forecourts and is causing the site owners losses which they can’t claw back," says Darcy.
There is a cost to upgrading your system but according to Darcy it’s not that expensive. "Most pumps are convertible to pre-pay (depending on the age of the pump) and with a minimal outlay of approx €300 per nozzle it’s quite easy to convert. Another option is to install a payment terminal integrated into the pump head or beside the pump. This would involve a greater cost of up to around €10,000 with the added value of the customer paying at the pump with their credit, laser or fuel card.
"I believe that Outdoor Payment Terminals will become the norm where customers can pay at the pump and will therefore reduce the drive-offs," he says.
A government issue
The Irish Petrol Retailers Association (IPRA) has been trying to raise this issue with the government in recent years. David Blevings of the IPRA put together a submission for the Minister for Transport in 2011 detailing the effect drive-offs were having on the industry and suggesting ways in which it could be prevented in the future by looking at the UK model.
A straw poll of the IPRA membership (over 350 retail forecourts) suggested that the average loss per station is approx. €3,000 per annum.
There are around 1,000 retail sites across the Republic so the annual loss equates to €3 million.
However Blevings told ShelfLife that there has been no development on this issue since his submission. "While many TDs had sympathy for the situation we have had no progress with government. One of our main aims was to get third party access to the National Drivers Database to seek repayment of alleged drive-offs. This operates in Britain with over 70% recovery rate. We think the government is missing a huge opportunity to assist the retail trade reduce this problem and take pressure off gardaí who could be more gainfully employed."
Blevings says that a number of its members are moving to pre-payment as the problem shows no sign of abatement due to the continuing economic problems and elevated road fuel costs. "I suspect we will see more retailers moving to pre-pay to remove the drive-off problem completely – early reports indicate that moving to pre-pay has not caused any significant change in customer behaviour at the sites that have asked for payment up front – this option is available to all retailers to completely remove this problem and I suspect more retailers will choose this option when they hear positive reports from other retailers who have made the move to pre-pay."
Related Articles
Seanad to consider ban on bookmakers accepting bets on National Lottery →
Lidl sets net zero commitment by 2050 with new climate targets →
Hidden Hearth – Ireland’s alcohol-free festival returns this October →
Fans 0
Followers