Even with all of the energy now being devoted to keeping a dealership running smoothly there are still some areas of day to day operations for which the appropriate solution, product or consultant has not yet been found. One such area is the use and control of dealer demo tags, a statutory requirement in most states, and long regarded by most dealers as a problem without any good solution.

Efforts have been made over the years by individual dealers to govern demo tags in a variety of manners ranging from:

While the problem of demo tag control appears intractable, there are solutions. The solutions take the form of dealer demo tag control systems and there are a number of providers in the market today.

One such provider is M-Tech, a company that is specializing in dealer demo tag control systems. M-Tech manufactures and markets the Securitag System. This “Smart Box” has been solving demo tag access control problems for nearly twenty years.

M-Tech’s biggest supporters are the dealers, managers and salespeople using the product. It is gratifying to be given such a vote of confidence.

“Is it OK if I come along?” She asked.” I could run in to the mall while you work and pick up a few things we need. It won’t take me more than an hour.” While she climbed into the passengers seat he slapped a demo plate on to the tailgate of the late model pickup and they headed to the mall.

“ Having these demo plates from work makes this easy. Without them it would be next to impossible to move these things around. I’m sure glad you were able to get a couple from the dealership.” He said smiling at her.

“ It was easy.” She said smiling back.

We don’t know what went on for the next hour or two. We don’t know what they bought, sold or traded that night. What we do know is that scenarios like the one described above are all too common today. Unlicensed dealers are not only stealing your business they are probably using your equipment in the form of your dealer demo plates to do it.

In conversations with dealers all across the nation I find that a large number of dealers have decided to “protect” themselves by charging their sales personnel large deposits for a demo plates, hoping or perhaps even thinking, that by doing so they are some how making the sales persons responsible for the demo plates. Sadly this is not the case. The dealer remains responsible for all of his demo plates regardless of who has them, when they have them, why they have them, how they got them, or how big a deposit they paid on them.

Unless they have been reported lost or stolen to the appropriate authority you the dealer are responsible for the demo plates and perhaps for any damages that might result from the use of those demo plates.

As a responsible corporate citizen you the dealer owe it to your community, to your dealership, to your family even to your nation to make certain that you know your demo plates are being used in accordance with State and local regulations. You might ask the question.” How can I ever be certain of where and how my demo plates are being used?” The answer of course is to control the demo plates. Once you have control of them then you can manage them. When you can manage them you can know who has them, when they have them, why they have them, even how long they have them. You can even know where they are when they are not being used on dealership business. The best way to get this kind of control is by utilizing a system designed specifically for the purpose, rather than one that has been adapted to it.

By putting off getting a demo plate control system, even for one more day, dealers are gambling with all their dealership’s assets.

Oh! Here they come. It’s 11:00 o’clock. They each have a car, a sporty little ragtop and a mid size SUV, both running on demo plates. Looks like he did some good business tonight. Do you know where your demo plates are?

By now, you are beginning to wonder what any of this has to do with you and your dealership’s day-to-day operations and the answer is simple:

• Increased Profitability
• Improved Security
• Streamlined Sales
• Increased Management Efficiency
• Reduced Overhead
• Lower Liability Exposure and perhaps even Lower Insurance Costs.

All of the above benefits can be realized through the utilization of ACS Technology. You may be wondering how ACS technology even fits into the dealership environment. Your question probably is: ‘ How does this apply to me and to my dealership?’ In response to this question I would say every dealership, regardless of its size or location needs to employ some type or types of ACS to limit access to everything from the shop supplies to the cash drawer. After all, you wouldn’t leave your cash drawer open exposing its contents to all of your employees and customers would you? So why would you leave your other assets like specialty tools, inventory, inventory keys, dealer tags or office supplies exposed? They are all valuable assets requiring some type of access control to make certain that only the persons authorized to have access to them actually have that access.

You probably already have some type of Access Control Systems at work in your dealership such as cash registers, locked tool rooms or secure office supply storage. You may even have a fenced and gated lot or lots, which limits access to your inventory. This is rudimentary ACS Technology working for you. Some of this may be manually controlled in which case it would probably require the time and attention of a manager or a specifically assigned employee and likely does not produce accurate records of access usage. Some may be automated, eliminating the need for direct supervision, and they may produce reliable access usage reports. The latter is the direction ACS Technology is heading today. Dealerships should be taking advantage of this emerging technology to control access to assets such as: inventory keys and dealer demo tags. Two areas of constant concern to dealers and managers everywhere. There are good, proven, reliable and affordable ACS specially designed to deal with these concerns.

With technology advancing at such a rapid pace now is the best time to jump in and find out exactly how ACS technology can benefit your dealership.

Above are four questions that every automobile dealership, large or small, publicly owned or private, single dealership or member of a group of dealerships, even mega dealerships, should be working on, hard and fast, to find answers for. The fate of the entire automobile retail industry may depend on how serious today’s Automobile Dealers perceive the whole issue of security to be. We should be able to learn from the mistakes and shortcomings of others. Let’s take the airline industry as an example. In that industry there was a recognized need for security that had been established over a long period of time resulting from incidences of people taking advantage of low or non-existent security measures. The industry responded, raising the level of security by implementing security checks of people boarding aircraft as well as their baggage and cargo. However, it was common knowledge that security levels were not uniform throughout the industry and that common knowledge was taken advantage of with disastrous results, which we are all well aware of.

Today, automobile dealerships are large business operations, not unlike the airlines, with hundreds of employees selling millions of dollars worth of product every year. The pressure is on to perform, meet goals, maintain growth and stay competitive. Often times, for upper level management, the business of operating an automobile dealership is more involved with dealings with the factory, the banks, the insurance industry, state and local regulatory agencies and a host of other business related distractions than it is with the business of selling cars and trucks. The thousands of Dealer Principals who operate their own stores either have to allocate a disproportionate percentage of their time and energy to administrative tasks or delegate those responsibilities to various managers.

Regardless of your particular situation, in the day-to-day business of doing business, important issues, which do not have near term deadlines, tend to be left off from meeting agendas in deference of more pressing matters. This is normal. We all understand that time in meetings is precious; the critical issues are dealt with, while items considered to be less critical are deferred to subsequent meetings, or given to committees to evaluate and report on later. From experience we also know that this committee work often remains uncompleted from meeting to meeting. Committee members usually have other responsibilities, which of necessity take priority, and they only work on committee matters when time permits. The truth is that if you have not actually taken the issue of dealership security and assigned a high priority to it, you will likely never actually deal with it. The sheer scope and complexity of the matter virtually guarantees that. The result will likely be an ineffectual, uncoordinated collection of antiquated equipment, practices, policies and procedures, which will leave you and your business virtually unprotected.

In today’s world of shady business practices, color coded terrorism threat level indicators and federally mandated security measures for some industries, the issue of security in, of and around your dealership should now be very close to the top of your list of priorities. In virtually all of the dealer interviews I have read recently when the dealer is asked to what he/she attributes the success of their business, the response is:

• Dealing honestly with their customers and employees.
• Up-to-date training for sales and management personnel.
• Attention to business practices and procedures.

We all know that it is of paramount importance to deal honestly with our customers and employees. No business will survive for very long if they do not follow this advice. Most dealers have come to the realization that a well trained sales and management team will make more sales than untrained uncoordinated salespeople and managers. However, some dealers have not yet come to the conclusion that they need to up-date and in some cases change or improve some or all of their old business practices and procedures. They are still attempting to operate their dealership the same way they did it 10, 20 or more years ago. We all know that ‘the times they are a changin,’and we have to change with them or we’ll be left behind.

One of the changes all dealers need to be making today is a serious revision of the security systems, practices and procedures used in and around the dealership. Dealers actually need to encourage each other to take these steps, for the good of the automobile retail industry as a whole. The cost of taking the initiative and implementing adequate security systems and procedures to protect all aspects of the business, while not insignificant, is likely not as high as would be the cost of complying with some form of federally mandated security requirements. Just ask any airline executive. Such federal mandates would likely be the result if the assets of an automobile dealership were utilized in some sort of incident like what we saw in Oklahoma or more recently in New York, Pennsylvania and at the Pentagon.

Decisions to make the kinds of commitments to security systems, practices and procedures that will be required to keep your dealership and it’s assets safe, secure and profitable will not happen by accident. You will have to be proactive, ‘take the bull by the horns’! Make it happen!

So, the answers to the four questions regarding how important security in and around the dealership should be:

1. For you the dealer; Top priority. Urgent.
2. For your personnel and management; High priority. Very important for the continued success of the dealership.
3. The level of security at your dealership is the most important factor in their planning and decision making in so far as your dealership is concerned.
4. There is probably nothing more important that you can do today, for the future of your dealership and the automobile retail industry, than to make certain that you have done everything within your power to ascertain that you have adequate security systems, practices and procedures in place and functioning.

Setup Your Securitag System in 4 Steps

Step 1.

Each Containment unit should be mounted on a wall, inside the dealership, in a location convenient for the majority of the persons who will be using them. The WM Series was created to facilitate secure wall-mounting. In the event that you are short on wall space we also have a number of free standing installations – the SS-Series. Including the SS-120, SS-120RX2,  SS-180 and our flagship Tag Tower.

Step 2.

Each of the members of the staff who are required to use demo plates should be assigned one of the pre-numbered keys supplied with the system. A Key Assignment Log, also supplied, provides a record of each key number,the name of the person to whom it was assigned, the date it was assigned, the amount of the deposit collected as security and the signature of the person to whom the key was assigned. A space has also been provided to enter the date on which a key is returned in the event that a key holder no longer requires access to keys or leaves the organization.

Step 3.

Each demo plate to be used for demo purposes should be attached to the No-Marr Magnet Bar supplied with the containment unit in which it will be placed – magnet bars from other companies may not be compatible. The plate number should be marked on the Tag Number sticker, included, and this sticker should be affixed to the inner surface of the unit where it will be clearly visible when the plate is removed. It then becomes a simple task to identify any missing plates.

Step 4.

Each of the plates is placed in a containment unit and the doors are closed. The keys are removed and the system is ready for operation. Once the system has been readied for operation, only persons with keys may obtain demo plates and their keys easily identify the persons with demo plates. This simplifies the task of identifying who is using the demo plates that are not in their containment units.

Simple, proven, reliable and effective: this system has been protecting the assets of car dealerships for more than 20 years in 2,500 dealerships in North America.

On a trip like this by car, in my case a very nice 4X4 crew cab pick-up truck (I prefer trucks), one has a lot of time to think. I spent that driving time thinking about you dealers and your need for dealer demo plate control. I looked at the beautiful stores knowing that they were at risk with every dealer demo plate that was out on the road because as in a line paraphrased from an insurance industry publication, “A demo plate represents the entire assets of the dealership when it is on the road.” I was also comforted by seeing many whose names were very familiar to me knowing that they were using a demo plate control system that significantly reduced their liability exposure. I wondered how I could convince each and every one of you, large and small, that you need to have some form of demo plate control for your own protection. Certainly, if you all decided to purchase the product that my company manufactures it would be very good for my business, but in the overall scheme of things if every dealership had some form of demo plate security and control system it would be even better for the automobile retail business.

Did you know that 70% of all money paid out by the insurers of automobile dealerships is directly related to claims arising from the use of demos? If something could be done to reduce the amount of money paid out by insurers, costs would surely come down as would risk. Well, something can be done. Every dealership, regardless of size, or location, regardless of state requirement or regulation, needs to implement some form of reliable, proven and effective dealer plate security and control system. There should be industry standards for such equipment. Industry experts should be working with state and national dealer associations and insurance industry consultants should establish these standards. With these standards in place, dealers could purchase dealer plate control systems and equipment with confidence, knowing that the system met at least minimum security and control requirements.

I’m ready to get to work on this to improve security and reduce risk all across the nation. It’s not a small job and will doubtless require a great deal of time and effort but I’m convinced that the result will be worth the effort. Dealers will be able to profit from reduced costs and improved efficiency. I fear it will take a long time to get the work of creating industry standards done so I would suggest that you not put off securing your plates while you wait for the standards to be established. Every dealer already knows what is required and with a little effort can verify the capabilities of the few offerings presently on the market. I would recommend that you check them all or seek the endorsement of a dealer you know who is using a product you are interested in. Who needs dealer demo plate control? You all do.

According to our own research:

• It is estimated that internal theft costs employers $9 per employee per day. This amounts to $280,000 a year for dealerships with 100 employees.
• The dealerships that are most vulnerable to this type of theft are those with fewer than 100 employees.
• 50% of all dealers experienced theft during a 5-year period during the 90’s and that percentage has been growing at an alarming 5% annually. This means that the majority of dealers can expect to be victimized by theft of some type every year.
• Reports indicate that 80% of all dealership employees have been involved in some sort of theft from the dealership where they work during the last 5 years.
• Theft or fraud is most likely to occur in departments where cash or other valuable assets are handled but there is significant risk in all departments.
• It is reported that the risk of loss is greater where poor or nonexistent internal controls are in place.
• 95% of all losses paid by insurance carriers results from actions taken by employees.
• $100,000,000 worth of vehicles is stolen from dealerships every year. $50,000,000 worth is recovered and $50,000,000 is paid for by insurance.
• Good loss prevention programs and internal control systems have been proven to halt loss experience growth of 10-15% annually and actually reduce losses by 30%

Theft schemes have been discovered in virtually all departments of dealership operations. The ingenuity of perpetrators is the ONLY limit on the manner in which dealers are being defrauded.

Dealership size isn’t a reliable indicator of the potential risk. Large dealerships with many employees offer a crowd for the dishonest to hide in while small dealerships don’t have the personnel and systems in place to prevent fraud. Theft and fraud rates grow in good economic times because less attention is focused on losses when times are good and they increase in hard economic times because thieves work harder at their craft when the need is the greatest.

You can take steps to reduce your exposure to employee theft by having a risk assessment of your dealership done. Your CPA should be able to provide you with this service, reviewing all aspects of your dealership operations and providing you with an assessment of the risk as well as some recommendations, which should include some type of demo plate control system, for managing and reducing those risks.

Rex Collins of Somerset CPAs also noted that,  “dealers should engage a CPA who is familiar with the industry…”. Sometimes the best advice is the most basic.

I just returned from a short road trip where I was able to meet and speak with many general managers and sales managers at several different locations. I am always amazed when I see how hectic their day is. At one point, I was in the managers office of a busy store along with four other people, all wanting to speak with him, all expecting him to solve some problem or approve some part of a negotiation or provide an answer to some question. We were all waiting while he was on the phone dealing with another situation. Does this scenario seem somehow familiar? Kind of like Déjà Vu all over again? You bet it does.

Easing the workload of a busy manager will allow the dealership to run more smoothly.

I was there to talk to him about Dealer Demo Plate Control since I had been told that it was his responsibility to ascertain that all demo tags at this dealership were properly accounted for. I wanted to explain to him how a good Demo Tag Access Control System could lighten his workload; that by installing and implementing a proven, client driven Access Control System such as “Securitag” from M-Tech a manager can reduce the number of tags required to operate the store efficiently through ‘controlled sharing’. Controlled Sharing is managed completely by the ACS (Access Control System) and the manager can visually appraise the status of the system and the disposition of the demo tags it controls at any time thereby knowing if any tags are lost or missing almost instantly. Being able to identify and report lost, missing or stolen tags belonging to the dealership in a timely manner is very important to the dealership, the dealership’s liability insurance provider and to law enforcement and public security authorities.

I waited for a break in the action and when he finally looked quizzically up at me as if to say ‘and what do you want?’ I did my very best to make my presentation as quickly and concisely as possible, it only takes about five minutes, but we were interrupted at least three times by people who had to speak to that manager about important dealership business matters. When the presentation was concluded, the manager thanked me, apologized for the interruptions and assured me he understood the advantages of having a Dealer Demo Tag Access Control System. I’m still working on that sale. I know that manager, like so many others, needs to reduce his workload. I know that the dealership, like every dealership, really needs the control and I know that a good Demo Tag Access Control System can fill both these needs. I wonder how long it will take, or what disaster will have to occur before owners and managers will make the decision to install an ACS to secure their Dealer Demo Tags and take some of the load off those busy managers?

However, all security is not created equal. There are good security systems, practices and procedures and there are bad security measures. The good ones result in a smoother running, more productive, efficient, safe and secure place for your people to work. The bad ones only provide the appearance of the real thing while leaving your dealership exposed to an untold variety of potential hazards. The real danger is that you are relying on these bad security systems, practices and procedures to protect your business. A task they may be unable to perform.

Management has many responsibilities; one of them is to make certain that the assets of the business are properly protected. It’s up to you to test your current security systems to find out if they are actually working. Check each system to make sure it is fully functional and that it still meets your requirements. Review practices and procedures and if necessary make changes to bring them up to date. Often good security measures fail to meet objectives simply because your personnel have been allowed to settle into a comfortable routine. Routine is the enemy of security. It is your responsibility to make sure your personnel are aware of the importance of security at the dealership at all times.

One of the next things you can do is examine the method you use to manage your dealer demo plates. Dealer plates are one of your strongest selling tools and as such they should be readily available to personnel who need them. They should also be one of the main security concerns in any dealership. A dealer plate is more than just a piece of metal you get from the State. It represents the entire assets of your dealership when it is on the road. Should you trust everyone in your dealership with access to your demo plates 24 hours a day 7 days a week?

Does your current method of demo plate management provide you with the access control and security you require while keeping the number to demo plates at a minimum?

Does it allow you to follow the number of demonstrations given by your sales staff?

Does it keep sales persons from spending valuable time searching for lost or missing dealer plates?

Does it prevent them borrowing demo plates from other salespersons?

If the answer to these questions is NO then you need to change your current system.

A good dealer plate control system makes plates available to sales persons whenever they need them. They can stay focused on selling. This allows them to maintain the continuity of their presentation. A good presentation equals more sales. More sales equal larger profits. Remember sales people are trained to make sales. Their training probably does not include the course on ‘how to care for a dealer plate’. There are several dealer plate control systems available on the market today. Take the time to evaluate them before you make your selection and remember you are looking for a system that provides you with both security and access control. Function, not cost, should be the motivating factor in your selection.

Once you have checked everything and removed bad systems and procedures that didn’t provide your business with an adequate level of security and you have implemented good security systems, practices and procedures designed to handle the security requirements of your dealership today, you should be all set to move forward confidently. Some training will doubtless be required and any good security system will expose those most in need of this training. It is possible that it will also reveal the presence of persons on your staff who do not, or cannot, respect the rules and regulations in place. Under the previous systems and procedures it may have been possible for these individuals to remain unnoticed while taking advantage of your faith and trust. With a good system in place these individuals cannot remain invisible. It is security’s job to expose these problems. It is management’s job to decide how to handle the situations.

Good security systems, practices and procedures work invisibly in the foreground. If they do their job properly, no one even knows they are there. While the cost of good security is not insignificant, the cost of bad security or no security has the potential to be unlimited. The ultimate goal of every dealership is to sustain growth and operate profitably. The return on your investment in good security is assured as your dealership profits from increased sales by a more confident, efficient, focused and honest sales force working in a stable secure environment benefiting from lower overhead and reduced liability exposure. These are the keys to a more successful dealership.

The friendly People at M-Tech worked with me to create a dealer plate control system matched to my requirements. I will now be able to operate my entire operation, 3 locations, 2 franchises, using half the number of dealer plates I would have otherwise needed. My liability risk is reduced, my overhead is reduced, for the first time in years I know where my demo plates are, and my insurance costs may even be lower. The ‘Securitag System’ works for me!

Grant Petersen, President & CEO, Bronco Motors, Boise, ID

Based on the design of the SS-120, the Securitag SS-120RX2 was designed in consultation with Boise, ID dealer Grant Petersen of Bronco Motors. It was designed to meet the demo plate availability, control and security requirements of modern dealerships. The Securitag SS-120RX2 incorporates the proven, patented Securitag system into a durable brushed stainless steel case. The upper portion can rotate to provide easy access to any of the 8 demo plates it contains. This unique feature means the SS120RX2 needs very little floor space. Easily meeting the demo plate requirements of a sales force of up to 24 salespersons.

Seen here installed close to a glass office partition. Minimum floor space is needed.

Convenient and secure, the compact Securitag SS-120RX2 pictured here with the dynamic, Boise, ID dealer Grant Petersen Jr.

The Securitag SS-120RX2 provides a secure convenient location for your demo plates. Each plate is locked behind a clear polycarbonate door making the plate visible. The high security, American made, tubular key locks which are assembled to our strict specifications can be keyed alike or individually as required by our customers needs.

Each person requiring access to dealer demo plates is provided with a numbered key. These numbered keys are assigned to each person requiring access to the SS-120RX2.

We recommend that you take a security deposit from them or actually sell the keys to them. In either case, keep a record of the users name and their key number. Demo plates are accessed by using the numbered keys. Once the demo plate is accessed and removed from the SS-120RX2 the users’ key is trapped by the SS-120RX2 and cannot be removed until the plate is replaced and the door closed.

This makes each user accountable at all times as management can immediately identify the user who has the demo plate.