Who Has Their Hand In Your Pocket?

At a recent meeting, we heard about fraud and how creative and undermining it can be within business walls. Specifically, employee fraud or theft-by-taking. What causes this? Is it sickness? Greed? Jealousy? Addiction? To have an employee stoop that low, there must be a change of the heart. They’ve rationalized that their fraud is somehow justified because the business is making lots of money. They may feel underpaid, debt-ridden, not respected, mistreated, or deserve it because of longevity and faithfulness to the business.

No matter what they’re thinking, taking money or inventory off of your shelf is stealing. As our conversation continued outside the meeting room, one recycler after another had a personal story to tell and the amounts of money and time it lasted seemed to grow with each story. It almost felt like we were comparing surgery wounds.  Folks, your employees can do major surgery on your business, under your nose, unless you implement some checks and balances. The following are ONLY SIX WAYS some employees have stolen.

With cash going into the bank on a daily basis, a female employee would shorten the deposit $200-$300 each day. Since no one noticed, she kept doing it. They had TWO RED FLAGS. One, she wouldn’t take vacation, in fear someone might see what she was doing. Two, she made all deposits. To avoid another person putting their hand in this guy’s pocket, they needed to adopt some checks and balances.

Another recycler chimed in that hers involved distribution of keys. Only certain employees had her keys. Always distribute keys that say “DO NOT DUPLICATE”.  Why? Anyone sent to make keys could duplicate keys that aren’t supposed to be duplicated…specifically master keys. In this case, her trusted employee had a master key. Riding through the area one Sunday, she noticed that someone was inside her lot. Sneaking in from the back, she found this employee repairing his car using parts from her inventory. As she finished her story, another recycler spoke up.

He had a long-time, faithful employee. In fact, this employee was so trusted and appreciated that she attended his family Christmas celebrations and summers around the family pool. Since she paid all bills, every time county taxes came due, this trusted employee would write the check for the business property taxes and include her property taxes too.  No one paid attention because she wrote one check. No checks and balances! Imagine how you would feel if you found out the person that shared holidays and summers with you had her hand in your pocket for nine years.

Another owner spoke up. His office manager and the manager’s brother-in-law were caught selling transmissions that weren’t yet inventoried. They would put transmissions outside the fence and retrieve them after hours. Another person would sell them.  An audit of parts transactions and inventory surely would have revealed some discrepancies. Maybe a hidden camera would have helped.

Speaking of audits. This owner used gift and gasoline cards. Employees would use the gas cards to fill-up company vehicles at gas stations. Some employees would instruct family members to meet them at the gas station to fill-up. This owner said he also bought 100 gift cards at a time. Even the office lady would take several cards at a time for herself. He was easy prey because neither card was being monitored or audited.

My turn! Phone Logic is a training company and back in the day, I had a manager that I trusted explicitly. After being robbed of computers and equipment, the bank encouraged us to verify open checks. From the back of the checkbook, three checks were missing. Within 24 hours, a check cashing center called. Our “trust-worthy manager” was trying to cash the checks. To make matters even worse, we didn’t know him by his real name. I learned a valuable lesson. When hiring, check ID and references and don’t apologize for it. A thorough background check should be standard protocol.

As we commiserated, the most important thing I learned was we can’t be TOO careful. All of us are vulnerable because people are more creative today. It’s hard to believe that people we trust could have their hands in our pockets.  At the end of our conversation, the entire group decided the motto we heard that day was now ours, “It’s not that I don’t trust you…. I just don’t trust you!”

Correspondence regarding this article should go to:

D.J. Says, 2820 Andover Way, Woodstock, GA 30189

D. J. Harrington is an author, journalist, seminar leader, international trainer, and marketing consultant. He works primarily with customer service personnel, and his clients include such world-class companies as General Motors, DuPont, Caterpillar, and Damon Corporation. He may be reached at 800-352-5252. E-mail: dj@djsays.com. 52 weeks a year, we are as close as your telephone.