Putting The Honor System To The Test

This unique service can give distributors a competitive advantage, but is it a good idea?

A customer needs a cylinder of gas at 2:00 on a Sunday afternoon to finish a project. His local gas and welding supply store is closed for the day, so he drives to the nearest big box store to meet his gas needs. The independent supplier has lost a small sale, and can only hope that it hasn’t lost a customer for good.

Delivering service exactly when the customer needs it is not always easy, especially if that customer’s needs fall outside the scope of normal business hours. Such situations may leave customers seeking temporary—or even permanent—sourcing substitutes. It may not be practical for an independent distributor to keep the hours of a big box retailer, but is there another answer?

Reliable Propane, a distributor of LP Gas in Clarence Center, New York, has come up with a unique solution to keep customers happy and supplied with gas 24/7. But as one might expect, it comes at a cost. President Ken Albrecht explains what he calls “the honor system” in an LP Gas blog:

“A few years ago, we began to notice that when customers needed gas for their grills over the weekend, they would visit local convenience stores for an exchange cylinder. To accommodate these customers, we made up several ‘honor tanks’ and set them next to the small building where we do our refills. The customers have access to these tanks after hours and on weekends. The sign invites the customer to take a cylinder home (each one contains only 5 pounds of product) and return it the next business day. We do not charge for the service.”

Albrecht says his business has seen an overwhelmingly positive response from the service. Even those customers too far away to take advantage of it appreciate what it says about Reliable Propane as a company. However, Albrecht adds, “As you might suspect, not all of our tanks are returned.”

As for Reliable Propane, Albrecht feels that the benefit of the honor system outweighs the cost. What do you think? Is the honor system a smart idea? Or is it one that needlessly puts a business in a position of risk?

Gases and Welding Distributors Association