From wrongdoers with pry bars and bolt cutters to cybercriminals hacking into networks, securing the assets of a vending and micro market business can be a full-time, costly job for many operators, and especially in the current climate.
The security-related challenges unique to vending machines, micro markets, ATMs and other unattended points of sale are inherent, but many operators report that they have become more pronounced as a result of COVID-19 shutdowns. Fewer people at locations and restricted access for route drivers have meant less opportunity for watchful eyes on equipment. The sudden, widespread unemployment resulting from the pandemic shutdown also fueled an uptick in internal and external theft.
What’s more is that dramatic changes in attitudes toward law enforcement in many jurisdictions, heightened by the defund of police movement, have led to a lack of resources and new restrictions on enforcing nonviolent crimes like property theft.
This atmosphere has emboldened many criminals and left businesses more vulnerable, making it imperative that operators take charge by stepping up surveillance and other measures to secure their assets, keep employees safe and protect facilities with locks and key controls.
The good news is increasingly sophisticated technologically advanced solutions go a long way to stay a step ahead of criminal minds.
Rich Morahan of Richard Morahan Associates has followed and written about the security lock industry for more than 25 years. In his view, since the start of the pandemic, and continuing now, thieves have become bolder in attacking vending machines, ATMs and kiosks.
“There are fewer people out around machines, and many companies are understaffed,” he pointed out. “Unattended locations allow thieves more time and privacy to commit brute-force theft and insert data skimmers, so you need physical protection. A camera and alarm system can record crime and deter criminals, but unless you have 24-hour video surveillance and a rapid response team, you better have on-the-spot physical barriers in place.”
Morahan is a consultant for Lock America Inc., a Corona, CA-based designer, developer and manufacturer of high-security locks and hardware, founded in 1981. Lock America’s drill- and pick-resistant locks, along with its security hardware, are designed to deter and prevent brute-force attacks against vending machines, ATMs and kiosks. They also provide key control, replacing the original low-security shipper locks installed on original equipment with locks uniquely registered to each client.
He added that Lock America, together with its consultants, stays in close touch with its customers and industry associations to gauge worldwide security issues and continually address new threats and concerns as they arise.
“The increase in crude physical attacks has led us to develop additional security hardware and locks, particularly locks for ATM and vending machine enclosures,” Morahan said.
In addition to locks and a variety of keyway options and systems, Lock America offers custom-designed and off-the-shelf security hardware, as well as developing solutions to its customers’ unique security problems.
“With over 40 years in security, Lock America is confident that it can overcome new security challenges,” Morahan said.
Panoptyc, a newcomer to the industry founded in 2019 and headquartered in Detroit, already equips more than 1,000 micro markets and almost all of the industry leaders with artificial intelligence software and state-of-the-art camera systems to alleviate theft. Larceny is the No. 1 concern operators have when considering whether to open an unattended location and a huge threat to profitability for existing micro markets.
The industry consensus, according to Panoptyc founder and chief executive, Mac Bolak, is that theft in micro markets accounts for about 4% of sales, which is around $3,000 each year in the average micro market. According to industry surveys, the 4% theft rate at unattended open markets is double that of attended retail.
“So, that’s not as bad as some may think, but also, there’s a lot of room for improvement and that’s where Panoptyc comes in,” he said.
A micro market equipped with Panoptyc’s smart camera and artificial intelligence technology reportedly achieves 255% theft reduction, which puts thousands of dollars a year per market back in the operator’s pocket.
“With the reduction in on-premises workforce due to the pandemic, some operators have concerns that their markets aren’t being tended to as much as they were pre-COVID-19,” Bolak said. “Even with businesses still operating, many place restrictions on who can enter from the operator side. In some cases, route drivers are allowed in markets, but management is not. This makes it difficult to keep up with inventory, merchandising and maintaining your peace of mind that your markets are being inspected and cared for as they had been pre-COVID-19.”
Since the early days of micro markets, operators have relied on DVR systems to give them visibility into the self-checkout stores, but much of the legacy video technology has become obsolete and cumbersome to view remotely.
“Issues like complicated port forwarding and limited data compression from existing DVRs restrain the amount of remote market viewing and oversight that operators can effectively do,” Bolak pointed out. “As a result, these days, they may only be remotely viewing and cross-checking some number of their locations.”
On the other hand, Panoptyc’s technology detects the most suspicious behavior at micro markets. It looks at anomalies and suspicious alerts within the data.
“Then we use what our cameras are seeing, basically through computer vision, which is a subcomponent of artificial intelligence,” Bolak explained. “Then, we investigate to determine whether the reason for the ‘blip’ is theft. If we conclude that it is, we provide our customers with the data and the images that prove it.”
Panoptyc’s technology is evolving to stay ahead of theft in micro markets.
GAINING OPERATIONAL INTELLIGENCE
The one great difference in the way businesses have operated throughout the pandemic is that personnel have been encouraged to work remotely, or to avoid coming onsite to a central office location to avoid exposure and possible infection of a company’s workforce.
“In many cases, businesses had to cut back on employees, meaning less personnel were available to attend sites and equipment that required servicing or monitoring,” said Medeco’s Bryan Allen. “Efficiency and productivity became even more important as businesses tried to keep their operations viable.”
Medeco, an ASSA ABLOY Group company, founded in 1968 and headquartered in Salem, VA, is one of the world's leading producers of locks. High-security vending solutions are a Medeco specialty. Its locks also protect U.S. government and military installations, at home and abroad, as well as schools and universities, hospitals, banks, homes and offices.
“Vending operations managers are constantly challenged with increasing revenue, making sure all inventory is accounted for, increasing productivity, ensuring accountability, managing, tracking collection time, data and location, and more,” Allen observed.
“What if it were possible to gain ‘operational intelligence’ on day-to-day service and collection activities?” he continued. “How much more efficient could vending operations be if you knew who was accessing what equipment and locks and when? How much revenue loss could be prevented, or efficiency could be gained?”
INTELLIGENT LOCKS AND KEYS
This technology can be achieved by replacing existing mechanical locks with Medeco intelligent locks and keys, according to Allen.
Medeco offers Intelligent Key electromechanical cylinders for vending equipment, which are tamper-proof and can control and track every opening or attempted opening of the cylinder.
The Intelligent Key system provides access control, monitoring and scheduling. It’s made up of three elements: electronic locks, programmable keys and web-based management software.
These elements work together to provide increased accountability and efficient route management for vending equipment, kiosks and other unattended equipment. The lock itself is plug-and-play. All power comes from the key, so there is no hardwiring. It’s as simple as removing the mechanical lock and replacing it with the Medeco Intelligent lock.
Key holders can be assigned only certain locks, and their keys will only work within a pre-determined schedule. Audit information is recorded in both the key and lock, showing a time-and-date stamped record of every event, including authorized accesses and unauthorized access attempts.
Operations managers can respond quickly to security threats such as lost or stolen keys, or unexpected personnel changes by expiring rights to the access of the affected keys, making them in-operable.
“While protecting your revenue and property, Medeco’s intelligent locking system can also help to reduce operating costs and increase profits,” Allen commented. “It reduces the threat of internal fraud by controlling when keys will be active and tracking all openings and attempted openings and restricting and tracking access to facilities and equipment and reducing write-offs due to theft.”
These smart locking systems manages route-based operations more efficiently by using software to account for time and activities at remote locations. They identify gaps in driver and maintenance activities and enable quick responses through the web-based software by changing assignment of keys to locks. They also eliminate bulky rings of keys and speed up the amount of time spent at each machine, with only one key needed per route driver to access any equipment assigned to them.
“What’s more, key holders don’t have to return to a central office or site location to have their keys reprogrammed in the event that their route changes – either for an hour, a day or permanently,” Allen pointed out.
“The key holder can receive updates to their access rights – which locks they can open – and their access schedule wirelessly via Bluetooth using an app on their phone or other mobile device,” he added. “They can literally receive updates to the programming of their key on-the-go anywhere there is an internet connection.”
This is an ideal solution for remote locations, or large service areas as the time required to travel back to a central office is eliminated.
Similarly, the system administrator can program keys from anywhere there is an internet connection. Personnel do not need to be on site for these activities to occur, which provides flexibility to the workforce. The company’s security administrator can control access remotely, even from their home office, making management of access quicker and more convenient.
A STEP AHEAD
Security is a constantly evolving concept that is based on what attacks the criminals are currently using. CompX Security Products provides solutions to deter all types of criminal attacks.
“If they are picking locks, we address that attack with our high-security lock solutions. If they are drilling locks or handles, we have solutions to prevent this attack. If they are prying, then we offer high-strength handles and locks for this purpose," said CompX’s Larry Springgate.
CompX is a domestic lock manufacturer that serves convenience services and many other markets with its standard locks and hardware, route management locking systems and high-security locks.
The company’s roots as a security leader trace back to 1903 when it was founded in Rockford, IL, as National Cabinet Lock. In 1982, its headquarters moved to Mauldin, SC, and as it acquired other lock companies, including Chicago Lock, Fort Lock and Timberline Lock, the company added an additional lock manufacturing facility in Grayslake, IL.
CompX Security Products manufactures up to 75,000 locks a day and serves more than 20 different markets through its four brands domestically. Its largest customers include the United States Postal Service and Harley Davidson.
“As a designated essential manufacturer, CompX has not stopped production during the pandemic,” Springgate said. “Our experience offering touch-free locking systems spans various other markets and we have the resources to provide this type of product for the vending market, as well.”
He added that a good portion of losses in vending businesses come from internal theft, which CompX addresses with its two mechanical route management lock systems. KeSet and System 64 provide up to 64 quick and easy key updates within the same lock.
CompX also manufactures the high-security TuBAR lock, which is basically two locks in one, with high-security features including precision tumblers and springs that make picking nearly impossible. The company makes all of its high-security keys exclusively in its factory and registers the codes so only the authorized operator can obtain keys.
Unattended locations give thieves all the time they need to manipulate low security locks and steal operators’ profits. For this reason, more than any, Springgate urges operators to upgrade to high-quality route management locks or high-security locks that provide long-term defenses against attacks.