Mitigating the Cost of Human Error at the Pump

March 26, 2021 in Fuel

Mitigating the Cost of Human Error at the Pump

For many operators, updating fuel prices remains a very manual process which can be prone to errors.  Headquarters determines the new price and calls the store for an employee to change the price on the sign and at the pumps.  Employees can be slow to make updates out of fear that traffic will fall.  Alternatively, employees simply make occasional errors as they make changes.  These discrepancies have traditionally been tough for many operators to detect before it becomes quite costly.  This happened recently at one of our customers.

Fuel Price Mistake Leads to High Traffic at the Pump

In this recent situation, one of the operator’s employees mistakenly applied the wrong price to the fuel at one of his stores.  The price per gallon was $.25 lower than the operator had intended.  This unintended discount led to sales at the pump increasing 144%.  A typical Thursday afternoon during the same period typically has around 40 fuel customers for an average total of 400 gallons sold.  During the period when the fuel price was mistakenly discounted, the operator had 95 fuel customers for a total volume of 963 gallons sold.  

Access to Real-Time Data Empowers the Operator

Fortunately this operator had Storekeep installed across all of his stores.  StoreKeep sent alerts to the management team that the fuel price at the store was out of line with competitors.  The issue was detected immediately and corrected within three hours.  Not only did this reduce the cost of the loss on the price of fuel sold, it also helped the team avoid a potentially more costly issue of empty tanks as inground inventory was reduced substantially due to the inordinate increase in volume sold.  Our systems allow you to monitor inground inventory levels remotely to avoid this problem as well.

Customers Shop in Store but Long Lines Formed

Our system tracks conversion rates of how many fuel customers also shop in the stores. While there was a modest increase in instore sales, most of these customers were opportunistic fuel buyers who were simply taking advantage of cheap gas.   Store traffic and sales increased about 20% but that was not enough to offset the losses at the pump. We could tell that only one register was open during the incident and it was processing over 60 transactions per hour. So a long line must have formed for over 3 hours. 

Traditional Accounting Systems Missed this Issue Previously

This operator faced a similar problem before our systems were installed.  He discovered in his monthly accounting reports that sales were down dramatically compared to normal.  As he investigated the reason for the decline, he found out that his diesel price was $.25 higher than nearby competitors.  Unfortunately, the store was far from headquarters and did not quite get the same level of oversight as those that were closer and easier for managers to keep an eye on.  As such, he did not detect the issue until a month later when the problem had a much larger impact on the bottom line.  

The contrast in these two scenarios demonstrates the power that access to the data from your business in real time can provide.