Technology Driving Safety and Cash Management

Safeguarding c-stores and the people and property in and around them is getting easier and more economical thanks largely to incremental advances in a variety of technologies. Among them: safes that do more, software systems that communicate better and electronic eyes that see more.

Theft and mayhem of all types, from gas pump drive-offs and loitering teens to shoplifting and employee theft or worker’s comp scams, are part of life, but easier to handle thanks to clever manufacturers and dedicated operators.
Here’s the latest from the front lines:

Keeping Watch

Video surveillance has “gotten a lot cheaper,” said Chris McGoey, president of McGoey Security Consulting in Los Angeles.

“Everything is digital now, as opposed to analog. For the most part, we have gotten rid of VHS tapes, which were notoriously horrible for recording and playback. Plus, their recording time wasn’t very long.” Alarm systems, too, have been refined and the process made “a little faster and a little cheaper.”

Mike Esh, Loss Prevention Manager for Wesco Inc. (Westgate Oil Co.) in Muskegon, Mich., said his stores have installed as many as 16 interior and exterior digital video recorders (DVRs) each in 40 of its 51 locations, with more to come.

“They work very well,” he noted. “We have had a lot of success with them catching drive-offs, internal theft, shoplifting and just about everything that happens in the stores.”

Esh positions cameras in specific spots to help staffers watch for specific things, registers, of course, as well as areas holding high-theft items like liquor, candy and tobacco products. Since Michigan does not have a prepay provision at gas pumps, cameras are needed there perhaps most of all.

“The biggest upgrade was going from VHS to DVR,” Esh said, “because of the clarity of the image and the ease of reviewing. With a VCR it was real clumsy and hard to find information. With digital video you basically go right down to the minute, click and play. It’s 15 seconds to pull up an incident, where before you would have to search and search.”

How often the videos get reviewed depends on store activity. “If we know there is an incident then we go right to it,” Esh said. “There will typically be something leading up to (an in-store theft). If the manager feels they have high theft from customers he might simply review the video to see if he could find anything. Typically it’s something that happens in the store that you review. Something directs you to that; maybe information from a customer or an associate noticing something odd.”

Potential shoplifters are dissuaded by conspicuously placed video screens so they can see themselves being watched.
Esh said that ROI on the video systems, which can run anywhere from $4,000 to $8,000, is only about two years. Training plays a role, too. “For the drive-offs in particular we teach our people how to run back there and get the information from the DVR system,” he said. “That’s a big one for us.”

Pan Tilt Zoom

A relatively recent innovation that Mike Campbell, internet marketing director for Skyway Security, a 14-yea marketer of digital video surveillance equipment, calls “interesting” is the auto-tracking PTZ (pan, tilt and zoom) camera. Operators controlled cameras with a joy stick before, doing things like zoom in and out, back and forth, up and down. PTZs, however, use software to automatically track a customer or employee as they move. “If need be, they can actually zoom in, as well.
You can even do low-light model that will compensate at night. ” While innovative and convenient, the systems have yet to be perfected.

“One of the downfalls, I guess, is that if you have an environment where there are five people walking around, who is the camera going to look at?” Campbell said. “I guess it’s the one with the most movement. But if someone is behind the scenes doing something and not moving as much as the others, it will go around them.”

Also, Campbell added, many retailers are starting to get into network IP (Internet Protocol) systems, where they can hook these security systems directly into an existing computer network. “You can just plug the cameras directly into it, as opposed to having to run all new wires, which is pretty handy,” he said.

Safer Safes

Eliminating cash shrinkage remains an elusive goal for most store operators, said Ed Grondahl senior vice president of sales and marketing for Tidel Engineering in Carrollton, Texas. The basic necessity of multiple employees handling cash throughout the day complicates the ability to manage cash. The cash management processes retailers have employed to date have reduced cash shrinkage, but by no means have eliminated it.

“Traditional manual processes provide for higher accountability and safeguards, but will never eliminate cash shrinkage due to the inherent shortfalls of manual processes,” Grondahl said. “To overcome these shortfalls, many progressive retailers are moving away from low-tech safes and cash control machines to high-tech cash management systems.”

These cash management systems include note acceptors and validators, note and coin dispensers, can be programmed into a store’s LAN, and will interface with its point-of-sale (POS) system at the transaction level.

“The state-of-the-art is intelligent safes that control all of the deposits and all of the change funds,” said Larry Robinson, vice president of sales and marketing for Armor Safe Technologies LLC in The Colony, Texas. “An ATM for the sales counter would be one way to look at it.” The company markets CacheSYSTEM intelligent cash control safes to convenience stores, fast-food restaurants and others.

Retail security has been “evolving over the past few years,” said Robinson. “The enhancements that are new include bulk note capability, where a cashier can drop as many as 50 bills at one time; no more feeding bills one at a time.” Also of relatively recent vintage is the devices’ ability to communicate information remotely “so that a corporate office can see what’s going on with its cash position at each of its locations.”

For a “very long time” safes in convenience stores were “nothing more than steel boxes,” Robinson pointed out. Then safes were developed that could dispense money, followed by models that counted money “and could actually tell me what my deposit was, rather than my having to trust the cashier.” The “last real evolution was connectivity.” Robinson’s company is piloting a wireless technology that can communicate information securely over a cellular network.

Robinson sees more intelligence safes ahead that will obviate the need for cashiers to handle cash at all. “There will be no cash in the cash drawer when the customer interacts with the device.” Also ahead: “More connectivity and possibly self-serve type products, like kiosks.”

McGoey helped 7-Eleven Corp. develop the time-delay drop safe for convenience stores while serving as a corporate loss prevention manager. Over the years, those safes have evolved to become “more like cash controllers now,” he said. “You just drop a $20 bill in that slot and at the end of the shift or the next day the manager opens the bottom, takes out all the money and counts it. Now they have machines where you actually feed the money into them like a vending machine. It makes your bank deposit for you.”

Someone still has to physically pick up the cash for deposit, McGoey said, “usually an armored car whose driver will take the money out in a secure container. That takes a lot of the employee thievery out of it. It limits the exposure of the manager having to run to the bank with a deposit.”


Frank Sutton, co-owner of eight-unit Great Stops LLC in Chapel Hill, N.C., described his stores’ video surveillance systems“
as above average,” and has begun retrofitting them with low-profile exterior cameras to better monitor activity around the perimeter of the lots. “We have so much pedestrian and car traffic on the lot that we’d just decided that it might be a deterrent, for example, to loitering. It also gives us more information should there be an incident.”

Sutton confessed that “where the camera systems have helped us the most is inside the store when we have had people make mainly injury claims. We have used the camera system to prove that they just flat weren’t true.” It is, he said, “nice for our insurance company to have such proof. I guess it’s a sign of the times, but there are isolated situations where having this information available on hard drive at the store comes in handy.”

New Standards and Compliance

The latest in security systems is payment applications security,” said Rick Dakin, President and co-founder of Coalfire Systems Inc., an IT company in Louisville, Colo. “The convenience store industry is being hit, along with a lot of other retailers, with the requirement to protect electronic payments every time a credit card is swiped.”

The recent Payment Card Data Security Standard (PCI DSS), developed by the PCI Security Standards Council, is a multifaceted security standard that includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures. It is also “disruptive to a lot of the security architectures within stores because the payment applications that have been purchased over the last 20 to 30 years were never designed to be secure,” Dakin said.

The standard requires a lot of the underlying point-of-sale systems to be significantly upgraded or replaced starting last year. That means c-store operators need to find out whether their POS system supplier’s application has been developed to meet the new standard, and whether they have completed their validation testing. If not, they have 18 months to upgrade both software and, potentially, hardware. Otherwise, their bank could stop handling credit card transactions.
While all retailers are grappling with this issue, said Dakin, “it is even more of a problem at the convenience store, because typically with pay-at-the-pump they need to secure transactions from the first swipe of the card all the way until they get their payment validated.”

More Regulation

McGoey says ongoing improvements in store security will depend to some degree on regulation by state, county and city officials. “Already, some cities have regulations about minimum training with certain devices in a store, minimal levels of lighting, sometimes limits on the hours of operation.”

Such regulation is a good thing, he believes, and usually comes in the wake of one or more high-profile incidents. “There will be something like a multiple homicide at a location and they’ll go after it locally.”
Most operators would agree that shedding as much light as possible on safety and security issues can only make things better.


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