In The Way of Revenue

Have you noticed, now that gas prices are through the roof, many gas stations have automatic shut-offs at a certain dollar amount?  Most of the time it’s at $75 or $90 dollars. I’m assuming the auto shut-off is in place because gas stations don’t want to lose a lot of money if someone fills up their car or truck and takes off.  I get the logic, but I think they’re making a mistake. They are just getting in the way of revenue.

Every time I go to fill up my gas tank the auto shut-off kicks in. If it’s $75 I get a little more than 3/4 of a tank. If it’s $90 I get closer to a full tank, maybe 7/8ths. Either way my tank doesn’t get filled up.  What I don’t do is put my credit card back in and fill it the rest of the way.  I leave with $75 or $90 dollars worth of gas. It would take $15 to $40 dollars more to fill the tank. That’s anywhere between 15 and 40 dollars of revenue I would have spent the gas station isn’t getting. In percentages, that’s between 32% and 18% in revenue the gas station ISN’T getting from me.

If my assumption is correct and the purpose of this approach is to limit exposure to fraud, the gas station is assuming a loss or theft rate of at least 18%.  That’s almost 1 in every 5 people stealing a tank of gas.  I suspect their loss is not that high.  So what is really going on is the gas station is getting in the way of revenue, to the tune of $15 to $40 dollars every time I fill up.

I see this a lot in sales. Companies get in the way of revenue. They implement processess designed to help that only hurt.  They undermine sales people. They create a revenue prevention department. Revenue is hard to enough to get. Creating things that get in the way of revenue makes no sense.  Clear the revenue path!

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