POWELL, Tenn. -- Bill Weigel's dispenser concerns started with the Americans with Disabilities Act (ADA) and how a well-known competitor settled a suit with federal regulators for $1.5 million.
Then came the threat from credit-card companies, which began cracking down with their own data-security mandates.
Weigel's pumps--about 260 at 61 stores--ranged in age from two to 20 years old, coming from a mix of manufacturers and, to varying degrees, exposed to both ADA and data-security issues.
ADA compliance had to do with accessibility and height of hoses and keypads to customers with disabilities. As he and his team investigated further, more issues arose around compliance with Payment Card Industry (PCI) and data-security standards. Credit-card companies were holding firm on standards, not to mention the real threat coming from ever-more sophisticated data thieves.
So what to do?
Now two years and a sweeping decision later, Weigel is wrapping up a complete swapout of his dispensers, deciding to replace even the two-year-old pumps to achieve uniformity, a move that would help cut maintenance and labor costs.
The ADA incident that initially motivated Weigel involved Tulsa, Okla.-based QuikTrip, which in 2010 settled with the U.S. Department of Justice by creating a $1.5 million fund "to compensate individuals who were victims of discrimination based on disability, as well as take various steps to make its stores accessible," department officials said in a press release.
Building on that potential liability were pending changes to PCI standards, enforced through the major credit-card companies. Through 2007-2010, the standards council implemented requirements that point-of-sale (POS) registers, and dispensers as well, be equipped to handle "triple DES" or a triple, data-encryption standard. The technology would help deter data thieves attempting to hack into systems that house or process credit-card numbers.
While upgrading dispensers was on the credit-card company wish list, they held tighter to enforcing mandates on POS registers, according to Tim Weston, senior product manager of payments, North America, for dispenser manufacturer Wayne, a GE Energy Business, based in Austin, Texas.
"They haven't pushed for a mandate on forcing upgrades to dispensers, but they have on the countertop [with POS]," he said. "That [deadline] passed in October 2012."
The PCI council is scheduled to release a new 4.0 version of its standards this year, which Weston said may bring "incremental" changes. In terms of a substantial change, Weston said a European standard called EMV or Europay MasterCard Visa involving cards embedded with electronic chips may be coming to the United States. It would require the upgrade of a chip-card reader.
For Weigel and many other retailers, the decision to buy new equipment--and to the degree that he did—hinged on the viability of that pump going forward. Roy Stephenson, regional sales manager for Wayne, which supplied Weigel with his new dispensers, said the retailer's new pumps "give him a foundation to do easy and cost-effective upgrades" should EMV become a reality here, while at the same time offering compliance to current PCI standards.
The alternative to upgrading the pumps was a piecemeal solution based on "chewing gum and bailing wire," Weigel said, explaining that not all of the pump vendors in his old portfolio were able to cost-effectively provide what he enjoys today. "Pumps don't last forever, so it just made sense to me. It's a decision for the long term."
Even though hit with that enormous ADA judgment, QuikTrip understands the need to continually present a fresh, contemporary business model to the public, Weigel pointed out. "For QuikTrip, the average age of a store is eight or 10 years."
For Weigel's stores, the new pumps provide an upgraded, state-of-the-art look for his forecourts, Weigel said, adding that customers respond to modern-looking sites. The change also increases fueling-flow speeds and solves calibration issues he was having with his older pumps. While declining to give specific costs, these efficiencies alone help establish a strong case for return on investment.
"Some companies build to sell and not to last," he said. "We're a family company. It's about this generation and the next generation. For us, it's the right thing to do long term."
Weigel is also confident about the future of gasoline and diesel, envisioning the next 15 years being stable for both supply and demand. As a result, he's bullish about new-builds, since the ROI timeframe on his new stores is less than his projected 15-year fuels outlook. "If I were to do it 10 years from now, I'd be skittish."