Check out this handmade sign posted on the front door of a shutter At Jimmy John’s sandwich shop in Missouri last week. See if you can tell from the store owner’s message what happened.
If you guess someone in the Jimmy John’s store might have been the victim of a business email compromise (BEC) or “CEO fraud” scheme – in which scammers pose as executives of the business to steal money – you would be in good company.
In fact, that was my original guess when a reader in Missouri shared this photo after being turned away from their favorite local substore. But a conversation with the store owner Steve Saladin brought home the truth that some of the best solutions to fight fraud are even more low-tech than the BEC scams.
Visit any fast-casual restaurant and chances are you’ll see a sign somewhere from management telling customers that their next meal is free if they don’t get a receipt with their food. Although it may not be obvious, such policies are meant to deter employees from stealing.
The idea is to force employees to finalize all sales and create a transaction that will be recorded by company systems. The offer also encourages customers to help keep employees honest by reporting when they don’t receive a receipt with their food, as employees can often conceal transactions by voiding them before they’re completed. In this scenario, the employee gives the customer their food and change and then pockets the rest.
You can probably guess by now that this particular Jimmy John franchise — in Sunset Hills, Mo. — was one of those that chose not to urge its customers to insist on receiving receipts. Thanks to the oversight, Saladin was forced to close the store last week and fire the husband-and-wife managers for allegedly embezzling nearly $100,000 in cash payments from customers.
Saladin said he was beginning to suspect something was wrong after he agreed to take over Monday and Tuesday shifts for the couple so they could have two consecutive days off together. He said he noticed late-night collections on Mondays and Tuesdays were “significantly greater” than when he wasn’t cashiering, and that this was consistent over several weeks.
Then he asked some friends to drop by his restaurant’s drive-thru to see if they were getting receipts for cash payments.
“One of [the managers] was taking a drive-thru order, and when they determined the customer was going to pay cash, the other would give the customer change, but then delete the order before the system could complete it and print a receipt,” Saladin said.
Saladin said his attorneys and local law enforcement are now involved, and he estimates the former employees stole nearly $100,000 in cash receipts. This was in addition to the $115,000 in total salaries he paid each year to the two employees. Saladin must also find a way to pay its franchisor a fee for each of the stolen transactions.
Now Saladin sees the wisdom in adding the receipt sign and says all of his stores will soon carry a sign offering $10 cash to all customers who report not receiving a receipt with their food.
Many business owners are reluctant to involve the authorities when they find out that a current or former employee has stolen from them. Too often, organizations victimized by employee theft are reluctant to report it because they fear that any media coverage of the crime will do more harm than good.
But there are discreet ways to ensure that embezzlers get their due. A few years ago I attended a presentation by an investigator from the criminal division of the WE Internal Revenue Service (IRS) who suggested that any victim of embezzlement seeking a discreet response from law enforcement should simply contact the IRS.
The agent said the IRS is obligated to investigate all notifications it receives from employers about unreported income, but victims of embezzlement often neglect to even notify the agency. It’s too bad, he said, because under US federal law, anyone who deliberately tries to evade or evade taxes can be charged with a felony, with penalties up to $100,000 fine, up to five years in prison and prosecution costs. .