If you have an insatiable need for fast money, and a low aversion to incarceration, you should know that a bank is a terrible thing to rob. Firstly, they don’t carry much cash. Secondly, you immediately have the resources opt the FBI on your trail. Now-a-days, with the wide use of debit and credit cards, few places have a lot of cash on hand. But a grocery store usually does.
Downeast or coastal Maine in the winter can seem virtually deserted, drab and dreary. Our supermarkets barely hung on through the winter. But in the summer, one particular store downeast was the second highest grossing store in sales per week in the 100 store chain. At one point, the store’s shrink had been creeping up to the point we scheduled a shrink investigation. (See the post Who is in charge here?)
One problem we found the next morning was a huge potential for, and clear characteristics of, excessive and organized delivery theft.
Most grocery stores are stocked by a main warehouse for the bulk of their inventory, but a lot of perishable and other goods like beer, wine and soda, are delivered fresh every day or two by independent route salesmen. The goal of the dishonest deliveryman is to create confusion so he/she can perpetrate the theft undetected. Delivery route theft is highly organized and very wide spread.
See here for an excellent list of training videos:
When we arrived in the morning for our shrink investigation, we found virtually every driver scheduled to deliver that day at the back door clamoring to be let in or to be next. The confusion was epic. We could only conclude that these delivery persons had colluded to ensure they all showed up at the same time to get away with every and anything they could. We told the store management to schedule the deliveries over the course of the morning and to allow only 2 vendors in the store at any one time. One being actively checked in and the other setting up to be checked in. All others were to remain outside the locked back door.
But this story isn’t about delivery theft. It’s about the money.
When we arrived at the store early in the morning for the shrink investigation, we checked the front doors of the store to make sure they were locked. It was 6 am and the store did not open until 7.
The “IN” door was properly locked. That meant everything was OK, right? not quite. We checked the “out” door by trying to pull it open. Sure enough, it was unlocked. We opened the door and the 4 of us waltzed into the supposedly closed store. We stood around the front of the store because there was nobody in sight. We could hear the grocery crew crashing around in the back room but the sales floor was empty. We walked around and noticed that all the register drawers were removed and the cashier area was clean and organized. That’s good. We also saw that the door to the “cash office” was propped open. That’s bad.
We walked into the cash office and looked around. The safe door was closed and locked and the cashier tills were all behind locked cabinets. All the other drawers were locked. That’s good. Then one auditor asked, “Even though the safe door is closed, it could still be unlocked.” That would be bad. So we tried to open the safe door and it was indeed locked. That’s good. Then another auditor asked, “I wonder if it’s on “day lock.” Day lock is when you close the safe door, throw the lever closed, locking the door, and you turn the dial just a smidge. That way, for all intents and purposes, the door looks secure, but all you have to do to open the door is turn the dial until it stops on its own (the tumblers have not yet been re-scrambled) and use the lever to open the door.
Sure enough, the safe was on day lock. That was very bad. I kid you not. We opened the safe door and stood there looking at about $130,000 in cash, and nobody was aware that we were even in the store. I was sorely tempted to grab the cash and wait to see the reaction of the store staff when they arrived for the day, but sanity prevailed and we simply locked the door for real this time and waited to complete our shrink investigation.
The store manager survived that shrink investigation episode, but he left the company about 6 months later, presumably for other reasons.
cash flow, cash skimming, CIA, CISA, CPA, dishonest cashiers, embezzlement, Employee Theft, fraud, grocery store, Internal Audit, internal controls