1. Did any business leader ever thought that scratch cards can be provided to desired customers, free of cost and that too by following all business processes? Here is how it can be done -
2. To fulfil the above requirement, the cashier shall proceed as under :-
He shall scan certain SKUs and generate the bill of the required amount which shall entitle the customer to get one scratch card. Once that is done, promotional scratch card is duly handed over to the customer (friend).
Customer scratches the card. Let’s presume customer gets the Rs 100/- as prize.
Next bill shall be generated in which all the previously billed SKUs shall be ‘refunded’ and customer shall shop for the amount which his scratch cards entitles him to.
3. In the instant case, the customer gets to buy SKUs worth Rs 100/- free of cost or I would say that he purchased SKUs at the cost of the store.
IS THERE ANY READER WHO COULD THINK OF THIS WAY OF BEATING THE SYSTEM ?
4. Not only this, smart cashiers would also know the denomination of scratch cards by merely looking at bar codes of scratch cards. Generally bar coding follow a set pattern and smart cashiers know the sequence of bar codes which indicates to them the denomination of scratch cards even without scratching the cards.
Wednesday, May 13, 2009
Monday, May 11, 2009
SMART WAYS TO DEFEAT BUSINESS CONTROLS
Business Parameters
1. It has been seen that retailers lay down lot of emphasis in controlling losses. Business rolls out lot of processes, carries out strict controls for implementation of same and continuously studies data to discern deviation. However, as the saying goes, howsoever smart someone is , there is some one else somewhere, who is still smarter. Key to controlling losses in organized is to stay a step ahead of such malicious ‘minds’.
General
2. Organised retailers have devised ways and means to MONITOR dump, line voids, refunds and shrink, because those are the avenues which are known to have been misused by staff. Even official studies of various independent bodies have established the fact that internal thefts cause losses amounting to approximately 34 % of total losses being suffered by the business.
Stores have been given specified targets of shrink, which is not permissible to be crossed or if they are crossed - they are questioned by management. Now, if some employee has to steal continuously, what he / she can do to not to raise alarm, keep the store shrink within acceptable parameters and still steal?
3. To understand the above, lets’ first discuss, how the genuine refund transaction impacts inventory and cash. Generally, for customer satisfaction, organized retailers have granted customers a facility, wherein, they (customers) can return the SKU to them (store) in case customers are not satisfied with the product for any of the defined reasons. Generally, customer has to bring back the product accompanied by original sales invoice / cash memo. That translates into following physical issues:-
· There is a person (customer) visiting the store and who is not satisfied with the product. He / family members are the ones who had purchased the product from the retailer in past (within stipulated time frame – generally not more than a week back).
· He/ She (customer) has a proof of the product being purchased on earlier occasion from the retailer outlet.
· There is a product in physical form which was purchased earlier and is now being sought to be refunded.
· All the above three sequence entail movement of men and material in the store from outside.
4. When, a cashier has to refund the product, the customer hands over the product to cashier, cashier carries out his point of sale activities, a refund invoice gets generated by the printer, showing the amount due to the customer and cash is handed over to the customer or is adjusted in customer’s bill. The faulty product received by the cashier is then placed back at appropriate shelf or is sent in back house if there are some quality issues.
5. The system data also changes and it adds one SKU to the store book count and reduces the amount given to the customer from its cash balance.
6. Now lets’ see how fraudulent store employee can manipulate above system. Malicious cashier do not wait for customer to come up with some SKU. The SKU is picked up from the store shelf only or product number is fed to the point of sale terminal by cashier himself or herself. later, refund transaction is carried out for the above bill. As given above, the terminal shall generate the cash to be given to customer. Since there is no customer, cashier picks up the cash himself / herself. As regards the SKU, since there is no SKU which has moved in physically, though the book stock shall increase by the numbers which have been refunded, but, physical stock shall not increase. NOW THAT WOULD BE COUNTED AS SHRINK.
7. Further more, smart store employees shall not permit shrink to increase in above manner. To prevent that they will simply post the refunded SKUs in dump, thereby effectively reducing refunded SKU from the store book count. Overall, NO SHRINK – NO ACCOUNTABILITY AND STILL THE STORE STAFF IS ABLE TO MAKE A KILL FOR THEMSELVES.
Mitigation Process
8. Data analyst has to study the dump data together with voided items and refund item data.
1. It has been seen that retailers lay down lot of emphasis in controlling losses. Business rolls out lot of processes, carries out strict controls for implementation of same and continuously studies data to discern deviation. However, as the saying goes, howsoever smart someone is , there is some one else somewhere, who is still smarter. Key to controlling losses in organized is to stay a step ahead of such malicious ‘minds’.
General
2. Organised retailers have devised ways and means to MONITOR dump, line voids, refunds and shrink, because those are the avenues which are known to have been misused by staff. Even official studies of various independent bodies have established the fact that internal thefts cause losses amounting to approximately 34 % of total losses being suffered by the business.
Stores have been given specified targets of shrink, which is not permissible to be crossed or if they are crossed - they are questioned by management. Now, if some employee has to steal continuously, what he / she can do to not to raise alarm, keep the store shrink within acceptable parameters and still steal?
3. To understand the above, lets’ first discuss, how the genuine refund transaction impacts inventory and cash. Generally, for customer satisfaction, organized retailers have granted customers a facility, wherein, they (customers) can return the SKU to them (store) in case customers are not satisfied with the product for any of the defined reasons. Generally, customer has to bring back the product accompanied by original sales invoice / cash memo. That translates into following physical issues:-
· There is a person (customer) visiting the store and who is not satisfied with the product. He / family members are the ones who had purchased the product from the retailer in past (within stipulated time frame – generally not more than a week back).
· He/ She (customer) has a proof of the product being purchased on earlier occasion from the retailer outlet.
· There is a product in physical form which was purchased earlier and is now being sought to be refunded.
· All the above three sequence entail movement of men and material in the store from outside.
4. When, a cashier has to refund the product, the customer hands over the product to cashier, cashier carries out his point of sale activities, a refund invoice gets generated by the printer, showing the amount due to the customer and cash is handed over to the customer or is adjusted in customer’s bill. The faulty product received by the cashier is then placed back at appropriate shelf or is sent in back house if there are some quality issues.
5. The system data also changes and it adds one SKU to the store book count and reduces the amount given to the customer from its cash balance.
6. Now lets’ see how fraudulent store employee can manipulate above system. Malicious cashier do not wait for customer to come up with some SKU. The SKU is picked up from the store shelf only or product number is fed to the point of sale terminal by cashier himself or herself. later, refund transaction is carried out for the above bill. As given above, the terminal shall generate the cash to be given to customer. Since there is no customer, cashier picks up the cash himself / herself. As regards the SKU, since there is no SKU which has moved in physically, though the book stock shall increase by the numbers which have been refunded, but, physical stock shall not increase. NOW THAT WOULD BE COUNTED AS SHRINK.
7. Further more, smart store employees shall not permit shrink to increase in above manner. To prevent that they will simply post the refunded SKUs in dump, thereby effectively reducing refunded SKU from the store book count. Overall, NO SHRINK – NO ACCOUNTABILITY AND STILL THE STORE STAFF IS ABLE TO MAKE A KILL FOR THEMSELVES.
Mitigation Process
8. Data analyst has to study the dump data together with voided items and refund item data.
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