Void / transaction cancel
Void sales frauds generally target cash sales. The aim of the fraud is to stop the sale from being recorded and to steal the proceeds. If the sale is not recorded, the money will not be missed from the banking of sales receipts.
A real sale of goods with a real customer is required, as someone needs to hand over the money that is stolen. The employee will sell an item to a customer, hand the item to the customer and take the money from the customer, but will either not ring up a sale or ring up a void sale.
Void last / void line item / error correction
All tills allow the operator to correct any mistake during the transaction.
During a sales, the operator will ring up a number of items from a real customer, conclued the purchase with the customer, but without finalizing the transaction. The operator will then void one or more line items from the transaction and finalize the transaction at the lesser amount, pocketing the difference.
The aim of a refund fraud is to process a fake return of goods and to steal the money allegedly paid back to the (fake) customer. In most retail businesses, some employees will have the authority to process returns of the goods in certain circumstances.
In a real return of goods, the customer will want the money or a credit after returning the goods, so using real returns for this fraud may be difficult. A false return must be created, processed and the money taken.
Sweethearting / collusion
Collusion or 'Sweethearting' as it is commonly known in retail is the unauthorised giving away of merchandise without charge to a "sweetheart" (friend, family or fellow employee) by the fake scan or ring up of items of merchandise by the cashier.
Typical methods are product substitution (low value for high value - often barcodes for low value items are kept by the till and scanned instead or low value PLUs are used instead) and sliding (high value items bypassing). Sweethearting always requires collusion with a 'customer' and can be an indication of organised theft on a larger scale
One of the most prevalent ways that an employee can cause a loss to their employer is by staff discount abuse. Most staff do not regarding mis-use of their staff discount as fraud - more a perk of the job to share with friends, family and others).
Although employers clearly state acceptable usage policies, staff soon forget or become relaxed about the matter. Ultimately most staff, even the most honest, do not regard usage of their discount privileges in an unauthorized way as theft.
Staff discount abuse
Industry reports consistently state that around 80% of all retail staff fraud is conducted at the point of sales by till manipulation. Till manipulation fraud is the alteration of transactions on the till for the purpose of liberating cash or goods. This is termed shrinkage.
There are many classic methods that are used - we have described the most widely used below.
These fraudulent transactions are almost impossible to spot amongst the thousands of genuine ones made every day.
Promotions / price alteration
Most retailers do not have strong controls or back office reconciliation of price promotions or price alterations at the point of sales.
By allowing staff to apply discounts, reductions or alter the price of goods (with or without manager override) opens up the till to heighten manipulation. This could be transaction fraud (staff member operating alone) or sweethearting (in collusion with friends, family or colleagues).
Shrinkage is the difference between the retail value of the goods and the actual value realized. The difference comes from error, waste and theft.
Known shrinkage is where the retailer can identify and record what happened to the goods. Unknown shrinkage is unrecorded loss, where theft is the dominant reason.
These losses drop directly to the bottom line of the businesses balance sheet - profit.
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