A rash of summer drive-offs forced most local gas stations to switch to a strict pre-pay policy. “Is it a good thing for business? Hell no,” says Larry Krouse, manager of the Ole’s on Russell Street. Krouse reports sales are down about $200 a day
For a single cashier peering out a tiny window into a gas station parking lot, every customer could be a potential $200 theft. But even with that persistent threat, scribbling down a license plate number for every driver that opted to pay for his gas inside began to be too much for Brad Greenberg.
“It was hard because we’re a really small store and we only have one cashier,” says Greenberg, who manages the Town Pump on Orange Street.
A summer of non-stop drive-offs—where customers fill up a tank of gas and bolt without paying—has forced the majority of Missoula’s gas stations to switch to strict credit card or pre-pay only policies on fuel sales. That seemingly small change has made a significant impact on local businesses.
“Is it a good thing for business? Hell no,” says Larry Krouse, manager of the Ole’s on Russell Street. “You definitely lose sales with pre-pay.”
Krause says his profits have taken a dive since the change in policy. Even after factoring in the fuel thefts that stopped, he says business is down about $200 a day.
Krause attributes the drop to three factors. First, pre-paying with cash or checks forces most drivers to guess how much gas they’re putting in their car, which means they rarely spend enough money to amount to a full tank. Second, those who pay with credit cards seldom come into the store at all to buy other items. Third, some would-be cash customers decide instead to pay by credit card at the pump, which means the station incurs processing fees from credit card companies.
Krouse’s store adopted the pre-pay only policy July 15 after losing more than $2,000 in drive-offs during the summer. According to the National Association of Convenience Stores (NACS), service stations lost $134 million in 2007 due to drive-offs, an increase from $122 million the previous year.
The NACS points out that drive-offs are not a “Robin Hood crime” since most retailers only make a penny or two profit per gallon on the sale of gasoline, meaning they must sell thousands of additional gallons just to make up for the loss. Often, according to a NACS fact sheet, a retailer will make more from the sale of a 12 ounce cup of coffee than a 12 gallon fill-up.
“Everybody’s having drive-offs,” says Krouse. “But the people that were driving off [at stations that now use the pre-pay policy] they went to other places. Anybody who is left is going to get all the drive-offs.”
For exactly that reason, Krause does not expect the pre-pay policy to change.
“I think pre-pay is here to stay, because we don’t have other businesses talking to each other,” Krouse says. “Who wants to be the first guy to say, ‘Hey guys! Come do the drive-offs again’?”
The notion of pre-pay has apparently been a difficult concept for customers to swallow. Already faced with record-high gas prices, bitter motorists often conclude that a pre-pay policy reflects poorly on the management’s trust of its customers.
“We get a lot of F bombs thrown at us,” says Greenberg.
“I think it’s harder in Montana and in rural areas because we’re so used to trust,” Krouse says. “Out-of-state people aren’t fazed by it at all. The ones that this is toughest on is the older people because it confuses them. They don’t know what pre-pay is.”
The only stations in town that have refused to switch to a pre-pay only policy are those owned by Kum & Go, a branch of Conoco based in Des Moines, Iowa.
The management of one Kum & Go chain on East Broadway declined to comment on their store’s business status over the summer. Their national communications director, Meggan Kring, however, says that the chain’s nationwide policy against pre-pay requirements is entirely about customer convenience.
“We don’t want to punish all those that are good for the few that are bad,” Kring says.
Since out-of-state motorists commit the majority of drive-offs, tracking them down proves to be difficult. According to the Missoula Police Department, few recorded drive-offs are caught and forced to pay back what they stole. Greenberg says one technique he’s seen involves people switching the license plates on their car.
In one case, Krouse recalls an incident where a motorist attempted to flee after filling up his car, but hit a bike rack on the way out, knocking off his license plate. Even with the physical license plate in hand, the man was never caught.
“Typically they’d be followed up if there were leads to follow up,” says Sgt. Travis Welsh of the Missoula Police Department. “But once they leave they never come back.”