Check out this handmade sign mounted on the front door of a shutter Jimmy Johns Sandwich shop in Missouri last week. See if you can tell what happened from the shopkeeper’s message.
If you suspect that someone in Jimmy John’s business may have been the victim of a Business Email Compromise (BEC) or “CEO scam” scheme – in which scammers pose as company executives to steal money – you are in good company.
In fact, that was my initial assumption when a reader in Missouri shared this photo after being turned down by his favorite local sub shop. But a conversation with the shopkeeper Steve Saladin brought home the truth that some of the best anti-fraud solutions are even more technically simple than BEC scams.
Visit any fast-casual restaurant and there’s a good chance 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 meal. While not obvious, such policies are intended to deter employee theft.
The idea is to force employees to complete all sales and create a transaction that will be logged by the company’s systems. The offer also aims to encourage customers to keep staff honesty by reporting when they don’t receive a receipt with their meal, as staff can often disguise transactions by canceling them before they’re complete. In this scenario, the employee gives the customer their food and change, and then pockets the rest.
You can probably imagine by now that this particular Jimmy John franchise — based in Sunset Hills, Mo. — was among those who chose not to encourage their customers to insist on receiving receipts. Thanks to that oversight, Saladin was forced to close the store last week and fire the couple’s managers for allegedly embezzling nearly $100,000 in cash payments from customers.
Saladin said he began to suspect something was wrong after agreeing to work Monday and Tuesday shifts for the couple so they could have two consecutive days off together. He noted that the box office receipts at the end of the Monday and Tuesday nights were “substantially greater” than when he was not at the register and that this was consistent over several weeks.
He then had friends walk through his restaurant’s driveway to see if they had received receipts for cash payments.
“One of [the managers] took an order at the drive-thru and when they saw the customer would pay with cash, the other took the customer’s change but then canceled the order before the system could complete it and print a receipt,” said 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 proceeds. That was in addition to the $115,000 in salaries he paid combined each year to both employees. Saladin must also find a way to pay his franchisor a fee for each of the stolen transactions.
Now Saladin sees the wisdom in adding the receipt sign and says all his stores will soon carry a sign offering $10 in cash to any customers who report not receiving a receipt with their meal.
Many business owners are reluctant to contact the authorities when they discover that a current or former employee has stolen from them. All too often, organizations that have been victims of employee theft are reluctant to report it, fearing that resulting media coverage of the crime will do more harm than good.
But there are quiet ways to ensure embezzlers get their due. A few years ago I attended a presentation by a CID investigator US Tax office (IRS), who suggested that all embezzlement victims who want a discreet law enforcement response should simply contact the IRS.
The agent said the IRS is required to investigate all notifications it receives from employers of undeclared earnings, but that embezzlement victims often fail to notify the agency at all. It’s a shame, he said, because under US federal law, anyone who intentionally attempts to evade or evade taxes can be charged with a felony, with penalties of up to $100,000 in fines, up to five years in prison and costs of law enforcement.