In this industry, we are always amazed at the new methods criminals can devise to steal money! Recently, I handled an interesting claim that involved employee theft.
The employer’s POS machine had a tab called “On Account” that was not utilized by the business in its regular operations. An employee figured out that they could purchase gift cards “On Account”, then use those gift cards to pay for a customer’s cash order and pocket the cash.
The theft went on for many months and resulted in over $35,000 in stolen funds.
Interestingly, the theft was not detected by the business but was unveiled by the employee, who could not help but brag to a friend who also knew someone at the business. The employee was confronted and eventually confessed.
The business owner was unaware of the “On Account” tab. Once the employee’s theft was discovered, the owner immediately contacted their POS vendor to have the tab removed.
The employee turned out to have a lengthy history of prior criminal activity. This history went undiscovered due to a lack of background checks completed by the business. Unfortunately for the business owner, the Employee Dishonesty limit was insufficient to cover the extent of the theft.
In addition to the importance of having a full understanding of the components of the POS machine, this claim highlights how important it is to conduct background checks as part of your hiring process. The laws concerning employee background checks vary by state, so you should review your state laws to ensure compliance with any limitations that may be imposed on conducting and using information obtained through background checks. With the current labor shortage, it may seem necessary to skip this step and get positions filled. Doing so could cost you and your business a lot more in the end.
For information about insuring your business with ICC, contact an ICC agent today. Use our Find an Agent search to locate an agent in your area.
