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Key Agent Newsletter
Spring 2016

IN THIS ISSUE:

- 10 Do's and Don'ts for Responding to Negative Online Reviews
- Tips for Getting a Better Insurance Rate
- Planning a Good Offense: How to Hurdle Security Issues
- On the Road with MiniCo
     


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Planning a Good Offense:
How to Hurdle Security Issues
by Elizabeth Ferrin

Data Compromise Coverage for Self-Storage BusinessesThis article is reprinted from Mini-Storage Messenger with the permission of MiniCo Insurance Agency.

Security and success go hand-in-hand for self-storage operations. To attract and maintain renters, facilities must be well protected, giving customers a positive feeling and an overall impression of safety. No one wants to pay to store their personal belongings at an off-site location where there is a high potential of damage or loss. With safety in the forefront, adding a few extra protocols to the daily routine can go a long way in enhancing your site’s security and protecting your self-storage store.

When most customers think of risks, theft is the first crime that comes to mind. However, thefts and break-ins are a relatively rare occurrence at self-storage businesses. According to the 2013 Self-Storage Almanac, an incident of theft was reported by only 8.9 percent of self-storage prop-erties nationwide. Other crimes – vandalism, trespassing, disorderly conduct, graffiti, storage of illegal or hazardous materials, incidents of customer fraud, and employee theft or fraud – were even less commonly reported over the course of the year.

Risk of Theft

“The most common crime at self-storage facilities is theft,” says Chris McGoey, president of McGoey Security Consulting. “This can be an inside or outside job.” He adds that over the course of his tenure working with self-storage companies, he has witnessed a wide range of crimes at self-storage properties. He’s heard of everything from employees completely cleaning out a store’s retail area and cash drawer by just backing the truck in and driving away, to criminals gaining access to a vacant unit and then cutting their way through the walls to enter unsuspecting tenants’ units. He adds that self-storage properties can also be targeted for theft or burglary of stored vehicles and boats as well as illegal drug activity and trades.

Although rare, when any type of crime hits a self-storage business the impact can be powerful and potentially long term. Customers directly affected by a crime are likely to immediately vacate their units and end their tenancies. Other renters may hear of the incident or notice additional police presence at the site and reevaluate their decisions to rent a space at the storage facility. These tenants may go on to tell their friends and family members about the crime, leaving a negative overall impression on potential future renters, as well.

With so much riding on maintaining a secure self-storage facility, some self-storage professionals choose to regularly revisit their business’ operations and procedures to ensure their facility is as fully protected as possible. Reviewing the employee screening process can be a good place to start since some crimes are initiated by staff members and contractors who intentionally target the self-storage businesses.

While uncommon – only 0.6 percent of self-storage facilities reported an incident of employee theft in the 2013 Self-Storage Almanac – the impact of this type of crime can devastate a business. “Employee theft can be an issue for self-storage businesses because they pretty much operate with only one person on duty at a time,” says McGoey. “They can take cash or supplies or give an unauthorized person access to the property.”

Employee Background Checks

He says his first recommendation for curbing incidents of dishonest and disingenuous employees is emphasizing the importance of thorough background checks. These types of reports vary widely and can consist of anything from a basic applicant screening to a full screening with reference checks. Many are prepared online by the owner or operator of the site but businesses also have the option of hiring an outside agency to run a larger-scale full background and criminal records check.

Depending on the individual business, most industry experts advise owners and operators to invest in a detailed evaluation. “If someone is going to be working with you – especially when you’re dealing with access to property – we recommend criminal background checks on employees,” says Officer Chris Tovar of the Surprise, Arizona Police Department. He emphasizes that paying out of pocket for a full background check can prove a sound investment in the long run. “Most people tend to only check for felonies in background checks, but you need to be aware that something that would normally be classified as a felony can be pled down to a misdemeanor. You really have to be careful with that.”

Tovar adds that he has seen cases where potential new hires are extremely eager to move quickly through the application process to avoid revealing a pending criminal case. He explains that any criminal procedures awaiting adjudication will not show up in most background checks. However, outside companies that specialize in employee screenings, operating under private investigator licensing, may provide more access to cases that are in process.

In addition to proper background checks, solid training programs have also been shown to reduce crime at storage properties. “On-site management plays a key role,” says Deb Tellinghuisen, Crime Free Programs coordinator for the Fargo Police Department in Fargo, N.D. “Staff members are your first line of defense. They often notice if someone is not acting with typical behavior because they know the patterns of their customers.”

Manager Awareness

She says promoting manager awareness is most successful when coupled with a program of regularly scheduled property checks. Walk-throughs can reveal damage to the store’s structure or fencing that could potentially lead to a security breach. Managers can also spot maintenance issues – such as overgrown trees or cracks in the sidewalk – that can be addressed to provide customers with a safer, more secure self-storage experience.

Security experts also recommend owners and operators conduct regular facility audits to account for every dollar going in and coming out of the self-storage facility. Audits should be a regular business practice at every self-storage operation from small, single-facility businesses to large operations with extensive retail offerings and moving truck rentals.

While the exact punch list of a self-storage facility audit varies based on the individual store’s needs, a basic audit generally includes verification of occupied and empty units at the site versus the number of units that are marked as filled in the businesses’ rent rolls or computer system. This helps guard against unauthorized access of units and ensures a proper accounting of every storage space. Some self-storage businesses also utilize mystery shoppers to gather information during the audit process, ensuring that employees are following all procedures correctly.

Inventory Audits

Completing an inventory check is another important component of overall audit process. Keeping an accurate tally of all retail items currently in stock at the storage store enables the business to accurately track and manage its inventory. Larger operations may choose an electronic retail management system with barcodes and tracking software. A good count prevents issues such as overstocking and shortfall of popular retail offerings. In addition, regular inventory audits can help owners and operators spot issues that would otherwise go undetected for long periods of time. “If someone is stealing packing tape, they could take a whole case and you would not know about it,” explains McGoey.

McGoey goes on to say that audits should be scheduled regularly, but the frequency will depend on the needs of the self-storage facility. A large-scale operation with an expansive retail area and moving truck rentals will require more frequent audits than will a small storage store with its entire retail offerings displayed on a small shelf display in the office. In addition, he suggests auditing new employees more frequently than longer term staff members are audited to help gauge how well the new hire understands and follows the established business procedures.

Since credit card, bank account and other personally identifying data is regularly utilized and stored by self-storage businesses, it is also important to check all facility computers for potential viruses and tracking software. Installing security software can help minimize external threats, but owners should be aware of the potential for dishonest managers to intentionally install tracking programs or computer viruses to gain access to customers’ identification and financial data.

Customer Screening

While background checks for new employees are a standard operating procedure at many self-storage facilities, most businesses are much more hesitant to complete similar checks on new customers. “Not all companies feel comfortable doing those kinds of tenant checks,” concedes Tovar. “However, storage owners maintain a right of refusal when customers want to put items into their storage units.” He says screening helps ensure that only authorized items are stored at the facility.

Tovar also suggests completing some type financial check on new tenants when they rent a unit at the site. He explains that customers who do not pay other bills may not pay their self-storage rent. With lien sale rules and procedures, the unit may be held up by the nonpaying tenant and realize no income at all for many months. Additional background checks can also help identify individuals who may be using the facility to house or manufacture illegal drugs or store stolen goods.

McGoey also emphasizes the importance of customer screenings. “You have to screen your tenants almost like an apartment renter,” he says. “Some facilities do almost nothing. Others do something minimal like ask for a driver’s license. However, someone could rent your smallest space for one month and that would get them through the gate.”

A well-thought-out lease agreement can also help evade would-be criminals. The document should include a list of specific items and substances that are prohibited at the site. As the manager walks the new tenant through the agreement, he or she can intentionally point out these items and ask that they initial the policy showing they understand the specific restrictions.

Utilizing Camera Footage

Security experts agree that a good security system equipped with video cameras is one of the best crime deterrents available for self-storage operations. The most effective system fully covers the entirety of the self-storage property, including the office and parking area. The feed can then be recorded in high-definition, allowing management and law enforcement to search and potentially identify involved individuals after a crime or security breech at the site.

Another security camera-based procedure involves the owner or operator logging into the system from an off-site location and monitoring the activity at the facility. “I think it’s a good practice from time-to-time to call the manager and say something like, ‘I saw on the camera my friend Bob came in yesterday,’” says McGoey. “I also recommend dropping in unannounced from time-to-time. It sends the message that the business is well monitored, and that message of an honest employee extends out of the office and into the storage facility.”

However, this message of protection becomes less clear when stores are outfitted with non-working surveillance systems. “If you have a camera system, make sure it’s not a dummy system,” warns Officer Tovar. “You don’t want to give customers a false sense of security.”

Implementing well-planned safety procedures is important for both the customers and the self-storage business itself. Security is one of the most important features a self-storage facility offers a tenant, and storage businesses rely on building a sense of safety in order to sell their product to new tenants. Protecting your self-storage facility not only helps close sales, it also reduces the risk of crime and ensures all customers have a positive self-storage experience.

“Security implemented at self-storage stores has gotten so much better that we don’t get a lot of calls from storage businesses,” says Tovar. “As far as using access and pin numbers to get in and out, camera systems and disc locks that are hard to open – these are good practices that storage businesses are now using.” He adds that while these kinds of protocols may be more costly to implement, they actually save time and heartache in the long run, putting the well protected facility on the best path for future safety and success.

Elizabeth Ferrin is a freelance writer and editor based in Maple Grove, Minnesota. She is a contributing writer for the annual Self-Storage Almanac and a frequent contributor to the Mini-Storage Messenger and other MiniCo publications.


 

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