Avoid Making a Sale Sometimes
I worked in an electronics stores years ago. The customer had to know what they were doing to make some of the items work. When I sold an item, I made it my job to figure out if the customer was up to installing the item properly. If I thought they were going to make a mess of the item, then I made up some excuse to discourage them from buying the item. That ploy usually worked. One day I discouraged a customer from buying an item to mount on a motorcycle. Later in the day the customer came in and talked to the owner. The owner promptly sold the customer the item. The next day the customer returned the item saying it didn't work and asked for a refund which we had to give to him. He had totally ruined the item so that it was a total loss.
Along the same lines I have talked with owners of repair shops. Some say that there is some customer behavior pattern that tells them when a customer was going to stiff them with a bad check or whatever on a repair bill. If they can avoid making that sale, then good things happen. The owner is not out money, and they don't have the grief and time wasted trying to collect the debt. Equally important, a competitor has to deal with that customer. To avoid bad customers, the service writer must recognize them as a bad customer and be able to send them somewhere else without making them angry.
Labels: avoiding a sale, bad checks
Employee Theft Cont'd
Often when I spend time in a store I hear new stories of employee theft. It usually seems that the people that can cause the most problems are managers and bookkeepers. If they are the same person or they are good friends, the possibilities for theft go way up. In what follows are the latest cases that I heard about.
1. In this case the manager and bookkeeper were good friends. Company policy required that the bookkeeper monitored all returns. The returns were stored on a shelf until the bookkeeper checked them in. The store owner had confidence in the bookkeeper since she always caught any of his mistakes. However, the manager and bookkeeper were good friends. She somehow missed hundreds of dollars a week in fake returns by the manager. The bookkeeper was out sick for an extended time. A temporary bookkeeper immediately noticed the fake returns and that ended the fake returns.
2. In the next scheme the manager authorized that some stock was drop shipped to an associate's home address. The manager authorized the paying the bills. Once this scheme was uncovered, it was assumed that the manager retrieved the drop shipped items and sold the items.
3. This third scheme was clever. The manager cashed checks in the store. The checks all bounced but the manager picked up the mail and removed the bad checks from the envelope. The accountant and the bank assumed that the owner knew about the bad checks so nobody bothered to point it out to the owner.
4. This last scheme was a mistake but uncovered the potential for theft. The owner was very busy and did not have time to take some deposits to the bank. He tossed them in the file cabinet and locked it. A couple of weeks later somebody was looking for something in the file cabinet and noticed the bags with the deposits. They had a company policy that required them to check to make sure the deposit slip matched the end of day report from their computer. However, they did not check to make sure that the amount deposited matched the deposit slip. A manager or bookkeeper could have made a second deposit slip leaving out some of the cash and used that second deposit slip for the deposit. Unless there is a check that the amount deposited in the bank matched the end of day computer report, there is a potential for theft. This same check would have spotted the theft in 3. above.
One thing that is not exactly theft but can cost the store owner dearly is employees that give their friends a good deal. The good deal can either be reduced selling prices or selling items tax exempt. Owners often watch selling prices but sometimes can miss tax exempt sales. You should carefully check your daily or monthly summary reports on your Store POS System and look for cash nontaxable sales. That is the first thing that a sales tax auditor will look for during an audit. There is an obvious red flag if the sale is cash to a regular charge customer.
Once you uncover theft in your business and you send the thief on their way, you face another problem. You can't report theft to some future employer that calls about the employee involved in theft because in many cases you can't prove it beyond a reasonable doubt. One crafty store owner said that he tells employers looking for a recommendation that he can't discuss that employee without talking to his lawyer.
Labels: bad checks, bookkeepers, deposit slips, drop ships, employee theft, fake returns, managers, recommendations, tracking changes in Store POS System data
