MONEY TALK: Forecourt crime - nobody is listening

As if there wasn’t enough bad news around already as we head into 2022: Covid restrictions; inflation forecast to be over 5% for most of the coming year; and consumers expected to be somewhat cash-strapped in coming months as high prices and increased taxes really bite.

And to top all of that, the British Oil Security Syndicate (BOSS) announces that forecourt crime is now costing forecourts nearly £100m per year.

Their definition of ‘forecourt crime’ is essentially limited to the age-old problems of ‘drive-outs’ and ‘No means of payment’ (NMoP) – so it doesn’t include things like cash losses, shoplifting, break-ins or robbery. If those were included, no doubt the total would be substantially higher. And it is bad news. Many years’ experience also suggests that it’s related to much of the other bad news: drive-offs historically seem to be tied to things like abnormally high fuel prices (which we’ve still got, despite some easing of wholesale fuel prices) and general consumer squeezes, whether from unemployment, inflation or a combination of both.

Just for the record, let’s be very clear that the people ultimately responsible are obviously the criminals. Life would be much more pleasant all around if everyone was honest, paid their bills on time, etc. Unfortunately, reality is different. It’s also worth stressing that while legally these incidents may indeed be ‘civil’ matters, as opposed to falling within the scope of ‘criminal’ law, most normal people would indeed describe taking fuel without paying as ‘theft’ – a criminal act.

Having got that out of the way, it’s also fair to say that nobody (apart from the victims – ie the fuel retailers) is really interested in the subject. They haven’t been for a very long time. The police service has suffered from nearly a dozen years of cumulative staffing cuts while the number of apparently ‘criminal’ activities that they’re supposed to investigate, and new laws to enforce, has kept rising every year. It’s hardly surprising that they don’t want to add thousands of additional crimes to be investigated to their performance targets. The same applies to the criminal justice system as a whole – the magistrates courts can hardly keep up as it is. And it also has to be said that the fuel retail industry itself is seen as part of the problem.

Surely that’s unfair – what is now commonly referred-to as ‘victim blaming’?

Well, no, actually. The simple reason being that the industry has long had the means of substantially reducing incidents of ‘drive-outs’ and ‘NMoPs’ but has made a deliberate decision not to implement them in any widespread or comprehensive way.

In nearly 40 years spent talking to individual retailers and network-owners, the subject of drive-offs has come up so many hundreds (or even thousands) of times that I long ago lost count. Way back in the 1980s the only practical solution was pre-payment. The response was always the same: “No, we can’t do that; it would slow down throughput at the pumps, and anyway it would harm our shop sales”. By the 1990s there was a technological solution – pay at the pump. Not only was it already used in some parts of Europe, but some of the oil majors began rolling it out on their forecourts here – notably Shell. Unfortunately, even when it was installed, many retailers were reluctant to ‘make’ (or even encourage) customers to use it. Again, the reason usually given was: “It will hurt our shop sales”.

So, the industry’s simple logic has always been: we would rather lose £Xs in drive-offs than £Ys in foregone shop profits. The trouble with that argument is that while BOSS is now telling us that ’X’ is nearly £100m, I’m still not aware of any reliable study that actually tells us how much ’Y’ is supposed to be. In fact, there’s some reason to doubt whether ’Y’ really exists in any significant form at all 

Go to your nearest Costco forecourt. Before you fill up you’ll have to scan your membership card at the pump. More to the point, you’ll have to insert your payment card into the pump and have it pre-authorised to dispense up to £99 of fuel in one transaction. It takes very little time. You’d have to ask the management of Costco whether they believe it to affect their store sales, but personal experience suggests not. If someone is going there to buy something, they’ll still go in-store; if they only came for fuel then they’ll only buy fuel. Of course, there’ll be some retailers who’ll say that this isn’t relevant to their situation - they’ll start talking about ‘lost impulse buys’. Really? This is 2022. How many people will not go into the shop to buy their paper or tobacco (both declining markets, by the way) or packet of mints, if they are going to pay at the pump before filling up? Will they cause ’Y’ to reach £100m per year?

This is 2022. Like it or not, electric vehicles and charging are being forced on us – and yes, even onto forecourts. If you’ve already got one, you’ll know that charging is mostly done by use of mobile phone Apps, linked to a networked account, linked to a credit card. You don’t park your Tesla on a charger for an hour or two and then tell someone that you can’t pay for the electricity.

The fuel retailing industry can continue to count “£X and rising” in drive-offs, and keep telling the world how unfair it is. Nobody will listen, because they’re too busy with bigger problems and they know that the industry won’t do what it could do to help itself reduce this one. Until technological change imposes itself. It won’t be long now.

EKW Group provides accounting and payroll solutions for independent petroleum and convenience dealers, including fully outsourced accounting options:

ekwgroup.co.uk

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