Secure in the Convenience Store

Internet-based surveillance systems are combating shrink and protecting employees.

By Howard Riell, Associate Editor.

Increasingly in society, it seems security equals surveillance, especially at retail. Internet-based security systems are part of that trend, helping operators by tracking and recording every transaction and thereby decreasing the amount of thefts by both customers and employees.

Even better, the prices of these digital systems are coming down, making them not only more affordable but easier to integrate into existing POS systems. Walters-Dimmick Petroleum Inc. in Marshall, Mich. has had an Internet-based security system in place for the past six years. It was originally considered, and ultimately purchased and installed, because the VHS tapes its stores were using were considered unwieldy by management.

“The older systems lacked a lot of efficiencies,” said Dale Williams, director of operations and information technology for Walters-Dimmick Petroleum Inc. “We started rolling out DVRs and connecting them to the Internet, so we were able to view (operations) over the Internet. We’re using several different manufacturers to accomplish that.”

The current system allows management to track and record each transaction with a cash register interface, with which most of its stores have been outfitted. The company operates 63 stores and oversees another 29 run by dealers.

Since the newer systems, such as those offered by industry leaders like Gulfcoast Software, are more accurate and fit seamlessly into the c-store, they have made a marked improvement in internal theft. Not only do employees realize they are being monitored for their own safety, they recognize that their own actions will be recorded on tape, making it easy to identify the source of theft.

“It improved employees’ knowledge that they are being watched,” Williams said. “It became more real to them once they realized that we didn’t have to go review a long VCR tape anymore. It changed the game to improve productivity and inventory control.”

Moving with Purpose
Walters-Dimmick executives decided to phase the upgrades into the system gradually, rather than all at once. “We’ve been rolling them out slowly over the past year,” Williams said. “We didn’t want to do them all at one time, so we’ve been doing a few each month. We’re about ready to cycle back around again and add more storage.”

Indeed, the next round of upgrades will provide some significant additional protection for the stores, Williams said. “Right now we’re getting on average maybe 30 days of recording. We’re doing 12-16 cameras per site, and (the length of recording time) depends on the number of frames per second. We’re capturing about 30 days, and we’re finding that that’s probably not enough time.”

More time is needed to counter bogus claims that may be made by scammers. “We always have the opportunists who come in and say, ‘60 days ago I slipped and fell in your location, and now I want compensation for it,’ and we have had no evidence, nothing to review and see if that’s really what happened,” Williams said.

The upgrades will take the length of recording and storage to 60 days, if the company’s executive team has its way. “We’d like to go to 60 days. We’ve upgraded every DVR that we had up to 2 terabytes, which sounds like a ton of data, but every day that becomes less and less storage,” Williams said.“We may have to upgrade to a different DVR that can handle more. We’re assessing that right now.”

These types of retail solutions are becoming more commonplace as they become more affordable. Gulfcoast Software Solutions, for example, produces turnkey virtual retail management tools that can monitor activity at multiple locations anywhere in the country simultaneously and in real time. These leading edge solutions feature multiple device data mining and a broad range of event driven, local and enterprise tools that simplify operations and pinpoint questionable activity for action. In other words, retailers have options to eradicate internal theft.

Policing Stores
Mike Berry, president of Pittsburgh Convenience Centers in Pittsburg, Ill., is a former military policeman, now operating his own c-stores. Given his experience, security is paramount. Berry engaged ADT for his Internet-based security system, which has been in place for about two years. To further enhance system stability, Pittsburgh Convenience Centers upgraded to the ADT Pulse system. It allows Berry—the first c-store operator in Illinois to install the state-of-the-art system—to remotely view his stores 24 hours a day, as long as he has an Internet connection or a smartphone with a minimum 3G connection.

The upgrade cost him about $5,000, “and has been worth every penny,” he said. “I’ve already utilized the system in monitoring my employees. Employee productivity is on the rise because they know that I’m watching. I have very little shrinkage now as far as customer or employee theft.”

Shrink had been a significant problem for Berry. Internal and external theft had been running at around 12%. Now it’s just under 2%. “I’ve cut my shrinkage by 10 percentage points. The system is going to pay for itself in the first year.”

Furthermore, seven employees were terminated based on information that was uncovered and one actually received jail time.
But above all else, Berry said, the system’s greatest attribute is its flexibility. “The remote monitoring puts you at ease and lets you sleep better at night knowing that your lifetime investment is well taken care of.”

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