Theft is a growing problem. Be on the lookout for pulsing.
By Roy Strasburger
Everyone wants something for free.
One of my most vivid memories is from when I was eight years old. I walked out of a grocery store with my parents and two pieces of Super Bubble gum. As we walked across the parking lot, I started to unwrap one and my father noticed. He asked me where the gum was from, and I told him.
The good news is that my family owned the store, so no one was financially hurt. The bad news is that my family owned the store and restitution had to be made. I worked for two hours taking out the trash and sweeping every level surface to pay off my debt, but I learned a valuable lesson—you don’t take anything from a store without paying for it, even if you are the owner. It often surprised my employees when I insisted on paying for everything when I was on a store visit. As I told them, “Everyone pays for everything.”
At the NACS Show in Atlanta, I attended educational sessions about the increase in organized retail crime (ORC). In 2022, the industry had in-store sales of $302 billion. Shrink was about 1.1%. This means that the industry lost over $3 billion. According to the National Retail Federation, 36% of shrink in 2022 was due to external theft, including ORC. Using these numbers, c-stores lost over $1 billion to ORC and other, non-employee, theft. With 150,000 c-stores in the United States, that means, on average, every store lost $7,200 to external theft. Can you afford that?
Among other projects, I consult on crime reduction at convenience stores. I was talking with Lori Stillman, vice president of research and education at NACS, about the current situation. Stillman said that theft is becoming a major issue and NACS is taking action to quantify theft losses and prioritize the actions that retailers can take to reduce them. Look for some new NACS programs in early 2024.
A rising theft trend, which was discussed during a NACS Show session, is pulsing, a form of fuel theft. This is a relatively new phenomenon and, if you don’t pay attention, could cost you lots of money.
Pulsing is when the pulsar in a fuel dispenser is manipulated. The pulsar monitors the gallons that are being dispensed and does the calculation of the total gallons sold. The criminal’s trick is to make the pulsar slow down so that it registers fewer gallons than what are dispensed. Fuel retailers have reported losing thousands of dollars’ worth of fuel when the pulsar is altered and multiple vehicles fill up.
To manipulate the pulsar, the criminal opens the interior of the fuel dispenser, either with a key or by prying open the cabinet. A $40 mechanical device is then placed inside the dispenser and attached to the pulsar. It can take only 30 seconds. ORC gangs leave the devices in the dispenser so that their other vehicles, usually containing large auxiliary tanks, can fill up as well. In 30 minutes, you can dispense over 300 gallons—over a thousand dollars at cost – and the fuel is then sold on the black market. The retailer takes a double whammy—the cost of the lost gallons and the loss of customers who are buying the illegal fuel.
To find out if you are being affected, look for tampering around the body of the dispenser and check the dispenser. If you see anything suspicious, put fuel in your car and see if it is registering correctly. Also, ensure your fuel inventory balances with your tank gauges. If you are missing fuel, hopefully you have cameras that can identify who stole it. At the NACS Show, I saw how AI-enhanced camera software identified someone tampering with an ATM. It may be possible to use similar technology to identify unusual activity at the fuel pump.
To prevent pulsing from happening, one company that was affected by pulsing installed a custom-made metal cover over the pulsar in each dispenser to prevent tampering. You can also change generic dispenser locks or install a security bracket on the outside of the dispenser.
Always inform the authorities of any suspicious activity. This is a crime. It will help the police know there is a problem in the community so they can alert other retailers. We are stronger together.
In the real world, there’s no such thing as a free lunch. Someone always pays.
Roy Strasburger is the CEO of StrasGlobal. For 35 years StrasGlobal has been the choice of global oil brands, distressed assets managers, real-estate lenders and private investors seeking a complete, turnkey retail management solution.
