While Manager of Internal Audit at the supermarket company, I was informed that the Loss Prevention Department had heard rumors of odd goings-on at one of the drugstore locations. It sounded like there were “after hours” (the stores all closed at p.m.) “parties” and perhaps other naughtiness.
Generally, Loss Prevention took care of things like that, but this one time, the Manger of Loss Prevention and I assigned ourselves the task of taking a first-hand look. Now, many of the store pharmacies had been purchased from independent pharmacists who were then hired as employees of the chain. They got steady wages, benefits, and regular hours. Sometimes they were also names as store managers, too. That was the case in this pharmacy, and we were attuned to the fact that many of these managers often felt like the store was still theirs. But we had an open mind perspective, so we drove to the store one Friday night and waited and watched as the store went through its closing routine. One by one each of the night employees were seen leaving through the back door, let out through the locked door by the pharmacist/manager. We didn’t notice anything unusual. But after all, this was only one random night. What were the odds of catching anything? Pretty low, I guess.
About 20 minutes after all the employees had left, the pharmacist/manager leaves the store and begins walking home along the sidewalk. He has a store bag with some sort of goods or product in it. So we begin to slowly follow behind in the car. It seemed very strange to be doing this, but all the while, the other manager and I were actively engaged in speculation as to what was in the bag, and more importantly, whether or not the pharmacist/manager had a receipt for the goods. What if we confronted him and everything was completely above board and proper? We would look a little foolish at best. But our time was quickly running out. Finally, based on our combined experience and the circumstances, we decided to stop him, identify ourselves, and ask if he had a receipt.
Well, fortunately, he did not put up any fuss, and he quickly admitted that he did not, in fact, have a receipt. We walked him back to the store to take a closer look at the bag. Inside, we found only about $15 worth of miscellaneous stuff, but more importantly, we found he had refilled his wife’s prescription, but had not recorded it anywhere in the pharmacy logs. So it was free, get it? It was admittedly small potatoes in this one case, and he was obviously acting as if he still owned the store, so I bet his rationalization was that this stuff was really just his anyway.
But what if he was in the habit of pilfering only $30 a week. That sounds like a pretty reasonable and likely amount. But at that rate, after 1 short year, the total would be almost $1,600. Small amounts can add up to big amounts over time.
I can’t remember if he kept his job after that or not.
embezzlement, Employee Theft, fraud, fraud theft embezzlement internal controls small buisiness, grocery store, Internal Audit, internal controls, retail theft