In this episode of “At Your Convenience,” CSP Editor Rachel Gignac talks to Fidaa Mohrez, senior director of operational systems at H&S Energy, Orange, California, and Mehdi Mahmoodi, co-founder of LottoShield, San Ramon, California.
They talked about H&S Energy's experience with LottoShield during CSP’s Convenience Retailing University (CRU) event in February in Nashville.
“At Your Convenience” brings industry experts and analysts together with CSP editors to discuss the latest in c-store news and trends. From mergers and acquisitions to foodservice and technology, the podcast delivers the story straight to listeners in short-format episodes, perfect for the morning commute or a quick break at the office.
- H&S Energy Group is No. 23 on CSP’s 2025 Top 40 Update to the 2024 Top 202 ranking of U.S. c-store chains by store count. Watch for the full 2025 Top 202 ranking in the June issue of CSP magazine and in CSP Daily News.
Listen to their conversation above, or read the transcript here, which has been edited for length and clarity:
Gignac: Mehdi, do you want to start off by explaining what LottoShield is and how it works?
Mahmoodi:Yes, and thank you for having me, Rachel. So LottoShield is a fully automated system for tracking lottery, and one of the things that really set us apart is we're integrated with individual state lotteries. So what our system does is two things. The first thing is we automate the manual processes that goes into tracking lottery inventory, whether that's at the manager level or at the office level. And the second thing is we cut down usually around 90% on lottery theft for the retailers.
Gignac: Fidaa, do you want to talk about some of the challenges that H&S has faced and how LottoShield has helped?
Mohrez: The biggest challenge was loss prevention. We were losing a lot of inventory. And with the scratch-offs, it's mainly in-house theft. So we were having issues with controlling our inventory and communicating with the California lottery to track our inventory. And that was the main challenge. But then we had other challenges with the efficiency and the labor. We were spending a good amount of hours controlling the inventory in a non-efficient way. And then also automation. We were doing a lot of manual steps. We went to LottoShield to fix the main one, loss prevention, and then we ended up fixing everything.
Gignac: How does LottoShield help with loss prevention?
Mahmoodi: LottoShield gave us the capability to track our inventory from the moment it is issued by the California lottery to the moment we sell it. We see the lifecycle of a scratcher ticket. So the moment the California lottery issues the ticket to our stores, we start seeing it. It goes into our inventory. We see it when it gets delivered to the store. We see it when it gets inventoried. We see it when it gets activated, and it's basically linked to our operation. So cashiers have to, using the handheld, scan the tickets they have on hand. Managers have to scan the packs they have in the back storage. So we went from losing a lot of tickets to almost zero. Everything is counted, everything is inventoried. In a few incidents, we lost few tickets and LottoShield was able to flag these tickets saying that you have this ticket missing from your store. Plus, you know who's accountable for this loss now, since LottoShield is providing tracking per shift, so we know who was in that shift, who was the cashier who scanned the tickets. So we solved this issue, the loss prevention, and then when we got to the labor, using handhelds and using LottoShield technology, it's really nothing compared to before. It's all automated cashiers, they use the handheld just for the tickets. They don't care about the order of the tickets, they just scan them. And a lot of it is doing the calculation in the back end. So we went from spending, in total, a few hours a day to almost an hour. So we were able to cut labor hours. And the last thing was automation. It was a fully customized solution for us. We were able to automate also the billing and the invoices and the credits coming from California Lottery into our enterprise resource planning (ERP) system. So we eliminated the manual factor 100%. And then everything now, it's really automated through electronic data interchange (EDI) invoices with their help. So as a department, we increased the efficiency. So three challenges were resolved with one system and that was a big deal for us.
Gignac: What did it look like to train employees on the system?
Morhez:It's really based on us, the way we decided to do it. You can take the difficult route, you can take the easy route. The difficult route is to do quick rollouts and train them quickly. We used the coaching method. We started with a few sites, and then we used the team of these sites as a coaching, basically to be a coach for every new site. So it was easy to roll out the system. It took us a few weeks, but actually zero hiccups. But we trained the trainers first, and then we moved from there. But it was very, very easy. The back office took extra training, because you want to make sure that you know how to get the result out of LottoShield. And this is where LottoShield team, they helped a lot. And for weeks, I actually worked on the project for a few weeks and then I stopped getting engaged. But I saw my team week after week meeting with a LottoShield team. They were always available for them, providing them with feedback, with comments, with support. So the back office team, they were trained, but also they got a lot of support, and that helped a lot.
Gignac: How long have the two of you been working together?
Mahmoodi:I think it's been almost close to two years now. One and a half, almost two years.
Gignac: Mehdi, what has LottoShield taken back from your experience working with H&S?
Mahmoodi: They've been a great partner. We've been able to help them with a lot of the tasks they've been doing. But they've also helped us improve our product. We actually have a WhatsApp channel with their their their person that handles LottoShield. He always brings up things, and we always help them. And if there's like things that he thinks will be better, we implement changes quickly so that when you're an enterprise customer, we push changes if you want a certain dashboard. If you want a certain custom report, our goal is to make you spend this little amount of time possible on lottery, and that that's what we come to work every day. That's what we think about how to make lottery easier in the industry. But we've had a great partnership and we're in the same state, so it's also really nice, we've been to their office a couple times.
Gignac: How do you think LottoShield is scalable with small and large chains? How does that work?
Mahmoodi: Yeah, so that's actually a good question. When we started LottoShield about four years ago, we actually came from the industry. So that's how we came to be. We started going locally and going to all these smaller operators. We actually started with single site operators, multisite to five-site, 10-site chains, then we got our first like 30 site operators. And as we grew, we realized that basically anybody who sells lottery needs it because as you grow your chain, as you get into like 100, 200, 300, 400 site operations, there's a lot less visibility you have to what's going on at the individual store level. And what LottoShield does... there's no one that can manipulate it so with these larger chains, you oftentimes have like big theft cases at an individual store where some assistant manager or manager access to who has access to the packs will start stealing packs and those certain those those theft cases get out of hand quickly. So when you have a system like LottoShield kind of keeping track of that any theft that happens with in your in your company LottoShield will tell you within a day through our state integration and our point of sale (POS) integration. So to answer your question in short, we realize that as you scale you you need it more. And it was was really nice because we're selling to all. For the single-site operators who are on top of their business every day, it's still a huge reduction in manual time. And it's kind of like a, it's kind of like your own employee. They're working for you and making sure nobody, you know, takes it.
Mohrez: I want to add to this. When I joined H&S, I was managing only 50 sites. Now it's in its 280 sites. So when we were 50, it was easy for us to spend time reviewing the scratches per site, review the inventory and going over everything. Once you start growing, you don't have the luxury anymore. So you rely on system like LottoShield to work by exception. So when LottoShield is flagging the problems that you need to focus on, instead of me spending time going over the inventory, I just need to go over the red flags that LottoShield is showing. And this is where the size of the company matters. The more you grow, the more you need to rely on LottoShield in your operation. And then while we were growing, here's another thing about LottoShield. We went to them and we told them, we're operating now in Oregon. So they went, communicated with Oregon Lotto, and they implemented the same solution in Oregon. It took them a few months while we were closing the escrow. By the time we closed the escrow, they were ready for us. So this is when you recognize the kind of partnership you have. They're basically growing. As you grow, they're going to new markets. As you go to new markets, and they help you with your growing operation.
Gignac: I'll ask you both this, but starting with you, Fidaa, what's something that you want to see in the lottery category as far as tech? What's something that you're looking for for the future?
Mohrez: That's a tough question. I think this is first time I say this, but I think the system is perfect for us. We actually do internal meetings and we talk about, where can we improve the cycle? With the current scratchers and lotto operation, we close the cycle. Everything is done through the lotto shield, back office system, full automation. I'm encouraging a lot of the team to go outside the lotto scratchers, start adding more products that we struggle with. But as lotto and scratchers, I think they have a very good system.
Gignac: And what about you, Mehdi? Any innovations coming up in the future?
Mahmoodi: We plan to stay focused on lottery. We think that there's a tremendous opportunity with just improving our product. And we really like staying where we are in the lottery space because that's how you can really focus and build something great. And for now, that's our goal. But the lottery space is pretty exciting. mean, there's a lot going on. Certain states are rolling out new ways to buy lottery, have iLottery. States are getting into video slot machines. And so it's just, in the lottery space, there's a lot going on. As far as loss prevention, automation for us, we like the lottery space.
Gignac: Awesome. Is there anything else that you wanted to add?
Mohrez: I think it's been a nice partnership. And sometimes people, they think I work for LottoShield because they always get excited when they mentioned a LottoShield. But I always say that for me, it was a great partnership. It solved a lot of the headache I was dealing with. And this is why I'm always a pro-LottoShield. I feel like they deserve the credits. So they helped us a lot and we're proud of this partnership.
Mahmoodi: Yeah, I appreciate that. And I'll kind of add something in there, too. I'll just say whether however you're managing your lottery, whether you have theft, whether you don't have that, if you don't have that, you're spending a lot of time a lot of as we work with a lot of companies and if they have lowered, most of them have a lot of theft whether they know it or they don't. But if they don't have a lot of theft, they're spending a lot of time on the issue. Their accounting departments, their operations departments are putting a lot of people on the problem. And the moment that goes away, theft comes up. I encourage you to take a look at how you're managing your lottery and reach out to us for anything. We help companies, whether they work with us, whether they're customers or not, we have calls with them, we help them. Our goal is to just help people see this issue and make it better and help them doing that.
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