Theft by Credit Card

Hey Boss, Thanks for Paying My Credit Card Bill…. Every Month
In a busy strip mall, a counter service coffee shop has a line to the door with their loyal followers eager for their morning iced coffees and homemade scones. Jacinta, an employee of the parent company for seven years now, is at the register taking customers’ orders and payments, as the rest of the brew crew busily fill those orders. Jacinta’s speed, accuracy on the register and friendly service suits her role engaging with the customers. She keeps that line moving all morning and can swiftly handle any issue at the register without skipping a beat.

The parent company of the coffee shop also operates a burger joint in the same strip mall and Jacinta works there three evenings a week in the same role, expediting those orders, payments, and the line while maintaining the ever-friendly interaction with their customers. Jacinta shows up for every scheduled shift at both places, she never complains, and she does her job well. In an ideal world these admirable qualities would be recognized and rewarded. Unfortunately, with the difficulty in finding good talent and dealing with the day-to-day operational hurdles’ businesses face, Jacinta’s excellence, and predictable reliability, keep her under the radar and thus unrecognized.

It was this ‘under the radar’ thing that got under Jacinta’s skin a few years back when an often late, complaining fellow employee threatened to quit if they didn’t get a raise and the parent company, desperate to retain warm bodies, acquiesced and gave this employee a raise. Of course, employees talk to each other and the complaining employee, who continued to complain I might add, told a few co-workers, including Jacinta, about her raise. Boy did that rile Jacinta up! Here she was showing up every day with a good attitude and hard work, and the company rewarded the complainer with more money. Harumph!

Dan and Teresa both operate and work in their businesses and engaged this writer’s assistance to track down the discrepancy so they could continue to focus on running those businesses as normal.

That was a pivotal moment for Jacinta. You see, it was then and there that she decided she would take a little raise for herself.

She knows the register inside and out and she also knows what controls are in place. As a matter of fact, the parent company often relies on Jacinta to inform them how new programs should be handled on the POS system. Jacinta knows cash is reconciled daily and a shortage in the till would be obvious and removing cash from the till would be risky. She didn’t want to be fired, she just wanted to take a little something for herself to reward her dedication and hard work.

Jacinta knew something else. She knew that while the parent company employed what seemed like armies of administrative and operational help, they didn’t have someone who understood the POS like she did. So it was, on Jacinta’s next morning shift between ringing up two regular customers, that she quickly rang a refund for $5 under the coffee department, slid her own credit card out of her apron pocket and swiped it to apply the refund dollars onto her credit card. “Wow, what a rush!”, she thought. Anyone who happened to look at the video would never notice a thing; the drawer doesn’t even open unless it’s a cash transaction. Nonetheless, Jacinta was a nervous wreck in the following days wondering if someone had discovered her. They hadn’t.

Jacinta never intended for her little $5 grab to become a habit she couldn’t quit, but it did, blossoming into a full-blown escalating theft. Soon Jacinta was refunding to her credit card while working at both locations several times each shift. Her spending habits changed to make use of that extra income and now Jacinta relies on that fraudulently obtained income to reduce her credit card bill each month.

Where does it stop, you ask? This activity will show itself in a few places. The question is, who is looking in those places? Refunds? No, no one at this company is looking at refunds specifically. They would be if they knew to, but they don’t know what they don’t know. What about the CPA’s reconciliation of the books? In this scenario, no, it won’t show up there. The books will reconcile. Sales? Yes, sales are looked at daily and the refund activity reduces overall sales. Will they even recognize a reduction in sales? If they do, will they make the wrong assumption about the reason for that reduction. So many factors can have an impact on sales. Will they look far enough to know that their food costs are the same and their customer count is the same, but sales have gone down? Not likely. Will there be an assumption that sales in that mall are just declining? Maybe. Typically, it comes to an end with a tipoff from an alert customer or fellow employee who sees something and reports it; either lifestyle change or unusual behavior at the register. It’s not likely though that Jacinta will stop on her own…. until she is caught.

If you’re a business owner, don’t wait for that tip to come in. Know now. Contact Us.

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