Sticky Fingers

Times are changing in the scrap industry. Gone are the days when a peddler could sell a truckload of catalytic converters for cash without question. Today, that same peddler must present a form of ID, such as a driver’s license, and possibly even submit to a fingerprint scan before receiving payment in many states.

As scrap prices reach record highs, some state and local governments are doing everything they can to stop the rise in material theft. This includes requiring scrap yards to comply with certain regulations. But the variety of data these laws require scrap yards to capture is making it difficult for recyclers to keep up.

By purchasing industry-specific software, recyclers can save time, reduce costs and meet their obligations under local and state laws. For most recyclers, learning software can be just as time-consuming as understanding government regulations. Fortunately, software providers can help.

Many recyclers still record data concerning scale-house transactions by hand. And law enforcement agencies have added long lists of reporting requirements in some states geared toward reducing material theft.

"For example, in Dallas, recyclers are not allowed to pay cash for scrap unless [the seller] is an approved cash customer or vendor," says Dave Kane, co-founder, 21st Century Programming, Long Beach, Calif. He adds that reporting requirements vary by state or locality. "Texas recyclers have to report to the state, while recyclers in Mississippi report to LeadsOnline, and Arizona recyclers report to the Rocky Mountain Information Network."

Law enforcement agencies can require recyclers to keep detailed reports of each transaction, including the seller’s name and address, the date of the transaction and a description of the material being purchased. Recently, these agencies also have been requesting scans of the seller’s driver’s license and fingerprints as well as photos of the incoming material.

With the regulatory pressure mounting, more recyclers are turning to software to improve their current recording process. "With software, recyclers are able to keep up with regulations and speed up their recording process at the same time, says Scott Brenner, CEO of Recy America, Scottsdale, Ariz. "Our customers also get a solution that complies with all the rules and doesn’t negatively impact customer satisfaction," he adds.

"We are saving customers tons of time and are making their lives easier when it comes to the police," says George Kane, co-founder of 21st Century Programming. "Now, if the police ask for information, recyclers can print out that particular transaction," he adds.

For recyclers who are not facing local regulations, such as Scott Gezymalla, CFO, Lincoln Metal Processing, Erie, Pa., purchasing software is a proactive step. "Software helps us better identify both customers and their material for law enforcement officers," Gezymalla says. "It also gives us a much better record of what we actually purchase." Software also prepares Lincoln Metal Processing for what could be coming down the road.

Software providers and their customers are forever modifying and fine-tuning their systems to stay ahead of state and local regulations.

In most cases, enforcement agencies only recently began requiring recyclers to record transaction data, such as customer name, type of material, price and amount paid. "Today, these agencies are calling for more detailed information about each customer and the products purchased from that customer," Brenner says.

For Recy America, this meant updating its software to include high-speed fingerprint, signature and driver’s license scanners and cameras integrated with scales and ATMs. And to make retrieval and reporting easier for its clients, Recy America’s systems can also upload or e-mail reports to agencies when necessary.

Features of 21st Century Programming’s software also include driver’s license and fingerprint scanners as well as a camera system that takes unlimited pictures per transaction, including gross weights, tare weights, license plates and pictures of who got paid at the ATM or by check. "The software also features an electronic reporting system that sends purchasing information to the various reporting agencies," Dave Kane says.

Maryland-based Paradigm Software also provides its solid waste and recycling customers with an easier way to report information. "If a state is requiring a certain customization, we can modify the program to assist them in capturing that specific data," says Jackie Barlow, vice president of Paradigm Software.

For example, one of Paradigm’s customers can only accept so much of a certain material on a specific day. "The software tracks how much of that material has come into the facility throughout the day," Barlow says. "The customers can also request alerts to be sent to them via e-mail or text message."

Lincoln Metal Processing has recently added driver’s license scanner and material surveillance features from The Shared Logic Group Inc., Holland, Ohio, to its system. The scanner provides the company with detailed information, including customer name, address and driver’s license image. "And the surveillance system effectively takes pictures of material at the same time the gross weight is entered into the system," says Gezymalla.

"The price recyclers can expect to pay for a software system and its features really depends on the company’s size and type of business," says Dave Kane, as well as whether the recycler currently has a computer system. The starting price for a software system from 21st Century Programming can range from $25,000 to $30,000.

Brenner says it’s important for recyclers to consider the cost of peripherals, too. "For example, a single driver’s license and fingerprint scanner, along with an IP camera, can cost in the neighborhood of $2,500," he says. "This would be on top of the price of our software, which takes the information from the devices and marries it to transaction detail."

Dave Kane advises recyclers not to choose a system based on price alone. "Recyclers that go with the least expensive software are not going to get the support and flexibility they’ll need if regulations change."

The installation time frame varies depending on the recycler’s size and the project’s scope, with two to three months being common, George Kane says.

Software providers do not see recyclers’ interest in software dwindling in the future, as more government agencies create and enforce new regulations.

"Unfortunately and fortunately we are only at the tip of the iceberg when it comes to regulations imposed on the recycler for theft," Brenner says.