From unreported purchases to data skimming and beyond, fuel theft can stop your fleet operation’s progress in its tracks. If you suspect that this crime might be happening in your fleet, you’ll want to implement prevention strategies to help monitor and control fuel purchases.
In this article, we discuss a number of those prevention strategies as well as common fuel theft vulnerabilities, signs of internal fuel theft, and types of external fuel theft so you can limit the impact of stolen fuel on your business.
Table Of Contents
- The Impact Of Fuel Theft On Fleet-Based Businesses
- Common Fuel Theft Vulnerabilities
- Types And Signs Of Internal Fuel Theft
- Types Of External Fuel Theft
- Fuel Theft Prevention Strategies For Fleet-Based Businesses
The Impact Of Fuel Theft On Fleet-Based Businesses
While exact figures are difficult to nail down because of underreporting, data inconsistency, and other variables, many industry insiders estimate that fuel theft can account for up to 6% of a fleet’s total fuel costs.
No matter how you look at it, fuel theft impacts your finances and reduces your profit margin. This can lead to operational challenges and inefficiencies, as your admins and fleet managers spend too much time reviewing fuel transactions to catch and prevent fraud.
Fuel theft can also affect company culture, creating an environment where misuse is tolerated and management loses trust in their employees.
Common Fuel Theft Vulnerabilities
Securing your fleet vehicles isn’t enough to prevent fuel theft. Vulnerabilities can also be found in your fleet management processes and include things such as:
- Weak security measures: If you don’t have both physical vehicle protection and fuel card restrictions in place, you’re more vulnerable to theft.
- Lack of vehicle monitoring: Failing to keep an eye on fleet vehicle use, especially fuel consumption, allows fuel theft to slip through the cracks and go unnoticed.
- Insufficient driver training: Fuel theft can sometimes be accidental; training your drivers on what they can and can’t use their fuel card for, how to report spendings, etc., can help prevent this.
- Driver carelessness with business fuel cards: Losing fuel cards or giving out card information is a guaranteed way to open your business up to theft.
- Lack of integrated systems: When your fleet and fuel management systems don’t work well together, it’s more difficult to monitor vehicle activity and fuel use, making fuel theft a distinct possibility.
For example, without strong spending controls and vehicle monitoring, a driver may be able to fill the tank of a company vehicle and then continue pumping fuel into a container they brought with them (or even another vehicle at the same station).
You wouldn’t know this happened unless you analyzed data from the fillup and saw that they pumped 30 gallons when the vehicle itself only holds 20 gallons.
Types And Signs Of Internal Fuel Theft
Unlike external fuel theft, internal fuel theft is committed by your own drivers or employees. Types of internal fuel theft include:
- Using company fleet cards to fill up personal vehicles
- Mileage creeping (drivers reporting inflated mileage numbers)
- Slippage (making unauthorized purchases and reporting them as fuel)
Even though this type of fraud can be hard to detect, you don’t have to sit back and watch it happen. Monitor your vehicles and drivers for signs of internal fuel theft, including:
- Frequent refueling: How many times should one vehicle need to be filled up? If it’s happening too often, there may be something else going on.
- Unauthorized fuel purchases: Look for company fuel cards being used in strange locations and at odd times.
- Unreported purchases: If reports from your fleet management software aren’t matching the spending your drivers are submitting, there’s an issue.
- Driver route/expected mileage deviations: Similarly, if you notice vehicle mileage doesn’t line up with approved routes, you may need to investigate.
- Inaccurate odometer readings (a.k.a. mileage creeping): Drivers may sometimes inflate their mileage in order to receive more funds for fuel.
As we’ll discuss in more depth later, one of the best ways to monitor and prevent internal fuel theft is with a robust fleet tech stack that includes smart fuel cards, telematics, and fleet management software.
Types Of External Fuel Theft
In addition to internal fuel theft and fraud, as a fleet manager, you should also be aware of external fuel theft methods, including the following.
Lost or stolen cards and data breaches (i.e., account and computer system hacking) are older types of external fuel theft but still require vigilance on your part to monitor and prevent.
New types of external fuel theft might not be as easy to recognize as those other two, so let’s define them in a bit more detail.
Siphoning is the act of physically accessing a vehicle’s fuel tank and draining gas or diesel into an external container. This can be prevented by installing locking gas caps on all of your vehicles.
Card skimming is the act of someone stealing credit card information by installing illegal devices (skimmers) on machines such as gas pumps and ATMs.
Card skimming is an advanced form of fuel theft that requires specialized technology, but you can train your drivers to recognize this threat.
Phishing scams are a type of fuel theft in which criminals first try to deceive your employees into revealing sensitive information, including contact information and card details.
Criminals then initiate fuel theft by fooling the credit card reader at the gas pump into authorizing false charges to your account.
Fuel Theft Prevention Strategies For Fleet-Based Businesses
1) Smart Fuel Cards
When you include smart fuel cards in your operations, you gain powerful spend controls that allow you to set precise rules by driver and vehicle according to factors including:
- Day and time
- Number of fuel purchases
- Fuel tank capacity
Coast, in particular, offers a unique mobile-based system that helps fleet managers see who’s using the card. Instead of entering a pump, drivers unlock the card using their own mobile device, creating an additional layer of security.
Certain smart fuel cards are also able to connect to your telematics and automatically decline transactions when the vehicle is not near the pump where the purchase is being made.
Lastly, fuel card reporting capabilities help you identify unusual fuel consumption patterns or driver behaviors. You’ll get real-time data and be notified when a payment is suspicious or declined.
Whether you’re most concerned about internal or external fuel theft, smart fuel cards can provide layers of security that can deter thieves of all types.
2) Telematics
Where fuel theft is concerned, telematics makes it possible to monitor various aspects of the fuel system itself, including:
- Fuel level
- Rate of fuel use (mileage)
- Fuel capacity
- Amount added to the tank at any given time
With this level of insight into your vehicles, you’ll be better positioned to identify if an employee is putting 15 gallons of fuel in a 20-gallon tank and then putting 5 gallons in an external gas can to take home, for example.
3) Fleet Management Software
Like telematics, fleet management software can help you keep track of the variables that affect fuel consumption within your fleet (e.g., routes taken, traffic patterns, driving behavior, and others). With this data, you’ll be better able to monitor and control fuel consumption across your fleet.
For example, if your drivers are accelerating hard from a complete stop, they’re using more fuel than they would if they executed a slow, steady start.
Fleet management software can reveal these types of small details that make a big difference in the amount of fuel your fleet uses to stay operational.
4) Onboard Fuel Management And Monitoring Systems
Onboard fuel management and monitoring technology is a combination of hardware and software similar to telematics but with more comprehensive monitoring and control of each vehicle’s fuel consumption.
Installing onboard fuel management and monitoring systems can provide the access and control you need to identify and prevent fuel theft from becoming a big problem in your business.
5) Fuel Receipt Reconciliation
Tracking fuel receipts and reconciling them to your monthly credit card statement can help identify fuel theft in all its forms.
Smart fuel cards provide automated receipt collection and matching so you don’t have to worry about lost records and mismatched data. When an employee makes a purchase, you receive a digital receipt so that even if the cardholder forgets to get a receipt or loses it on the road, you’ll have a record of the transaction.
6) Fuel Usage Policies
Fuel usage policies are a set of guidelines defining how and when drivers are allowed to use their fuel cards. Examples of effective fuel usage policies include:
- What constitutes an authorized fuel purchase
- Penalties for unauthorized purchases
- Fuel receipt management
- Maintaining fuel logs
7) Driver Training
Drivers are the first line of defense against external theft, so train them to be on the lookout for both physical forms of theft (like siphoning) and digital forms of theft (like card skimming and phishing).
Training should also include discussion about penalties for internal theft in order to deter drivers from breaking your fuel usage policies.
Steps to Take When Fuel Theft Occurs
If you suspect that fuel theft has occurred in your fleet, immediately take the following actions:
- Secure your assets
- Notify the appropriate team members
- Document what happened
- Report the incident to authorities and your insurance company
- Conduct an internal investigation
If you have a smart fuel card integrated into your workflow, deny the suspect transaction, lock the card, and then investigate further. Doing so will prevent the theft from becoming a bigger issue for your fleet.
Protect Your Fleet From Fuel Theft With Coast
Protecting your fleet from fuel theft doesn’t have to be difficult. Follow the strategies outlined in this article and implement the Coast smart fuel card into your workflow.
The Coast fleet and fuel card comes equipped with tons of advanced security features, including:
- EMV chip in every card
- Secondary security verification via text message
- Instant alerts for suspicious transactions
- Purchase monitoring
- Spend controls for each card
- Approve or deny purchases at your discretion
- Ability to lock cards with one click through user admin portal
And, with Visa acceptance, no-cap/no-minimum-spend rebates, and real-time transaction reporting, the Coast fleet and fuel card gives your business the freedom it needs to get ahead.
To learn more about how Coast can help you monitor and control fuel costs, prevent fuel theft, and improve fleet activities, visit CoastPay.com today.
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