Retailers see an increase in Corporate Fraud

Most experts agree no company is immune to corporate fraud. Although all companies would love to believe they have the most honest employees, the reality of it is, they don’t.

Corporate Fraud is damaging to both the associates and the reputation of the company. Fraudsters cause millions of dollars in loss every year, and the estimates continue to rise.

I remember an employee working out of the corporate office of a beauty products company I worked for. She got herself into the mix of fraud. Befriending a vendor, the employee had control of a select line of merchandise coming into the company. After building a relationship with the vendor, she decided to push her luck. The vendor and employee partnered up and started their scheme. As the vendor pushed the merchandise, the employee inflated the purchase orders, buying more than what the company expected. The vendor delivered only what the company expected and the employee kept the additional items. These additional items were kept inside of a storage unit, rented by both the employee and vendor. Over the period of about 6 months, the two had enough merchandise to start their business. Initially, they started with a booth at a local swap meet. Realizing the possibilities of the internet, their business quickly left the swap meet scene and their new beauty endeavor started on Ebay.

These two were eventually stopped, but caused a significant loss to the company. The two initiated their scheme prior to the beauty company starting a loss prevention program. Hired as a loss prevention Investigator, I immediately saw huge issues at the store level that led me to investigate the corporate office. Shrink numbers as high as 25% told me the story of theft and inaccurate book keeping. The investigation led me to the buyers, and with the help of an additional loss prevention investigator we were able to uncover the scheme.

Corporate Fraud is damaging, no doubt about it. Having a program in place to combat the inevitable and remain profitable is the solution.

For more information contact us about corporate fraud or call 1.770.426.0547