Jim Larson in Spokane and Lonnie Chase in Coeur d’Alene have had sleepless moments in recent weeks dealing with the same issue: how to best protect the minuscule profit margin they make on the sale of gasoline.
Operators of gas station/minimart businesses, people like Larson and Chase have watched the price of gas soar above $2 a gallon in recent weeks. But no matter what the pump price, their profit remains roughly the same at about only 2 cents per gallon, they said.
Meanwhile, gasoline theft tends to go up along with the pump price.
When the price of gas started climbing, Larson noticed more people stealing fuel at his Exxon Food Mart in north Spokane – about a 20 percent jump in the number of drivers who would fill their tanks and take off without paying, he said.
Coeur d’Alene police say they received 20 reports of gas theft in a recent week, far higher than normal.
Chase, who runs a smaller outfit on Coeur d’Alene’s Northwest Boulevard, hasn’t experienced a jump in thefts but said, “All it takes is one guy driving off with $20 worth of gas and it wipes out your day.”
The Qwik-Stop Gas and Grocery he has owned for five years typically sells a little more than 1,000 gallons of gas daily, less than half of what Larson sells in a day. Selling 1,000 gallons makes Chase $20.
Larson has owned his business for nine years. He stayed up late Wednesday night figuring out how to convert his operation into a prepay-only business.
He rewrote company policy. He laid out guidelines to retrain his cashiers and he made plans to get signs explaining the change to customers. The pumps won’t get turned on until the money’s in the register or until a credit card’s been swiped.
More and more local owners of gas station/minimarts have made the switch to credit card and prepay operations in the last year. It’s often not an easy decision. Gasoline is the product with the highest sales volume, but the real money is made inside from the sales of snacks, coffee, beer, cigarettes and other convenience items.
Going to prepay and credit cards will virtually end gas thefts, but it also may mean customers never enter the store or that they feel inconvenienced when they do, business owners said.
The National Association of Convenience Store Owners says drive-offs constitute a $112 million problem that gets worse when the prices rise. The association says the theft averages more than $1,000 per station, per year, but in some areas, it’s as much as $800 a month.
Jim Redmon, who owns the Divine’s Auto Service stations in Spokane, said he switched his gas stations to prepay six months ago because of drive-offs. He made the change after one-too-many months of losing about $300 in profits. “We’re frustrated because we don’t want to do it, but we were being hit so hard,” Redmon said. “It’s a terrible problem. It’s no different than just going out and stealing money. I think it’s going to force the country to go to prepay.”
For Larson, the need to fight drive-offs finally outweighed the risk of driving away customers.
He finds he also pays a price in lost trust as he watches people try to hide their cars behind vans or trucks or park at the pumps farthest from the building.
And “they always drop the nozzle and take off,” Larson said. “They’ll wait until you get real busy. It’s a tough game, you bet.”
It’s tough on workers, as well. Cashiers can be disciplined, even fired, for failing to catch a license plate or description of a rig that’s driven off without paying. Sometimes, it appears, the worker covers the loss.
A Spokesman-Review staffer recently purchased gasoline at a Spokane station that did not have prepay requirements and, after filling up, moved into a parking stall near the store before going inside to pay. The worker behind the counter was clutching his heart, “Oh thank God,” he said, “I thought you drove off. That comes out of my pay.”
Other cashiers in Spokane and Coeur d’Alene have made similar statements.
Withholding pay to cover theft is legal in both states, though far more restricted in Washington, officials at state labor agencies said.
In Idaho, any employer can dock a worker’s pay for losses as long as there is a written agreement in advance that it’s a condition of employment, and as long as the amount deducted does not take a worker’s earnings below state minimum wage of $5.15 in any pay period.
“It is not acceptable to me, but it is acceptable to the law,” Ken Flatt, supervisor of the Idaho Department of Labor’s wage and hour unit, said from Boise. “More and more employers (in Idaho) have written authorizations to withhold pay for breakage and loss.”
Workers who believe the agreements are being unfairly applied – or who believe their pay is being withheld without a signed agreement – should call the labor department’s wage and hour units in Coeur d’Alene or Boise.
“We get cases every year,” Flatt said.
In Washington, initial reading of state law strictly prohibits such withholdings, a state labor official said.
“It is not legal to deduct something like a gas drive-away from an employee’s check,” Ron Langley, public affairs spokesman for the Washington Department of Labor and Industry, said from Tumwater. “The only deductions allowed in Washington state are the deductions required by law or deductions agreed upon in advance that are to the employee’s benefit, such as a 401(k), or a charity or a medical plan.”
But in a follow-up e-mail, Langley said he had found an exception. A worker’s pay in Washington can be docked for losses but only on the final paycheck, no matter whether the worker quit or was fired. And, like Idaho, the amount of pay withheld could not take the worker’s earnings below state minimum wage, $7.16, Langley said.
Some owners won’t withhold pay.
“I wouldn’t do it. It doesn’t feel right,” said Chris Chase, who co-owns the Qwik-Stop in Coeur d’Alene with her husband, Lonnie. “I’ve been a cashier 17 years and nobody ever took money from me for losses.”
As of April 2004, 25 states – including Washington in 2001– had passed laws allowing a judge to suspend the license of drivers convicted of stealing gas. The Washington Association of Neighborhood Stores sells stickers that retailers put on their gas pumps. They say: “Steal gas, lose your license” and quote the statute.
The Idaho Petroleum Marketers and Convenience Store Association has also tried, unsuccessfully, to pass similar legislation, said Executive Director Suzanne Schaefer. Local owner-operators said they hope Idaho will pass such a law soon.
Brian Tabert, manager of the Holiday station on North Pines in Spokane Valley, offered some understanding for the spike in gas thefts.
People are “upset at the gas prices,” he said. “The other issue is some people are so strapped for money right now, they can’t afford (gasoline) but have to get to work.”
But understanding only goes so far. Station owners say they train their employees to keep an eye on the pumps – the Qwik-Stop even has a telescope. And they report every theft, they say.
However, station managers say the police don’t consider the thefts a priority. Tabert said a big brown van drove off after pumping $60 worth of gas from his station last week. The way the late ‘80s-model van was parked, employees couldn’t provide a description of the driver, but they did get the plate, Tabert said. But, still, no one’s been caught.
“We’ve had exactly one recovery in four years at the three Holiday stores. Three stores, four years, one recovery,” Tabert said. “Yes, I understand the police have other things on their mind and there are more important crimes than this, but it is theft.”
With the Holiday station earning about 6 cents a gallon profit, the $60 theft wiped out the profit on sales of 1,000 gallons of gas.
Police response varies by the size of the city.
Post Falls, for example, treats a drive-off as a live call and will dispatch a patrol unit immediately.
It’s different in Spokane.
“We haven’t worked drive-offs for years,” Spokane Police Department spokesman Dick Cottam said. “We don’t want to encourage people to think they can get away with it. But it is, in effect, a property crime and I don’t think we even have any statistics on it.”
The license plate numbers and descriptions of cars or vehicles suspected of gas theft are still reported to police, Cottam said. And shift supervisors pass out lists to all patrol officers at each of the police department’s seven daily roll calls.
“You would be amazed at the memory cops have for license numbers,” Cottam said. “If they see one (on the list), they obviously will do something about it.”
Post Falls and Coeur d’Alene – each with a fraction of Spokane’s population – still have detectives make follow-ups on gas thefts, Lt. Greg McLean of Post Falls and Sgt. Christie Wood of Coeur d’Alene said.
And the amazing thing is, police and area gas-station owners say, maybe a third of the people who get a telephone call from police return to the store, apologize and pay.
But even in North Idaho, gas drive-offs are losing ground to other, more serious crimes. The Kootenai County prosecutor’s office has placed a cutoff on thefts: If it’s under a certain dollar amount, don’t bother filing charges.
And, big-city cop or not, all area law enforcement had the same advice:
“Really, the gas stations have the resources to prevent this type of crime immediately: Prepay,” Coeur d’Alene’s Wood said. “We would like to see them go in that direction.”
“They are afraid they will offend their customers, but it’s a matter of where any business wants to draw the line,” Cottam said.
McLean, who reviews the daily police reports, said he has had many discussions with gas station/mini-mart owners in Post Falls and said that by early 2004 all but two of the businesses had shifted to credit card and prepay. “And they are the two stores hit the most,” he said.
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