If you are looking for studies conducted and figures published by big organisations, this article is not for you. In this article investigators working on a wide spectrum of fraud, theft and embezzlement investigations in South Africa is allowing you a little insight into what we have found.
We have divided the information into two sections, simply because the modus operandi used by white-collar criminals differ a lot from the ones used by blue-collar criminals.
“In criminology, blue-collar crime is any crime committed by an individual from a lower social class as opposed to white-collar crime which is associated with crime committed by someone of a higher-level social class.” Wikipedia
In this article, we will only deal with blue-collar.
Stock levels are spot on day after day, week after week, month after month –
- Your staff might be manipulating stock figures. – If your checkers are involved in the “syndicate” you would never get the real figures…
- Or they might be rolling stock. – Where for example 10 items were stolen from existing stock, it would be replaced with items from new deliveries. You would only detect the shortage once you independently check and verify all stock.
Stock levels are almost always incorrect –
- This is a sign of dishonest staff trying to figure out how to deal with shortages. – It is a scenario where nobody really knows how much stock there is supposed to be, and they are guessing numbers.
Stock levels need to be “adjusted” regularly –
- We have seen in, specifically the fast food industry, that totals for rolls and patties had to be adjusted almost daily. The managers claimed it was “shrinkages” and broken products. – Very little broken products could be provided. During an investigation, we uncovered that everyone was involved from the “back of house” (where they make the burgers) to the counter staff (where they were selling).
Too many “Cash-up” discrepancies –
- Employees very seldom would steal your product for own consumption. – They prefer to sell it and have the cash.
- The bigger the “syndicate operation”, the more mistakes you would have in your cash-up of cash registers. – Allow me to explain: They would sell a product to a customer and not ring up the sale. The change is given and the customer leaves. As soon as that happens the employee need to remove the exact amount from the cash register. Many times, this becomes difficult as there are cameras or there is a manager around. They then start tallying the numbers in their head and when the opportunity comes, they remove the amount. If the tally is R127.35 they would normally remove R120.00 as it is easier to remove. The cash-up would then show that there is R7.35 too much in the cash register. Many business owners do not act if the till is over, or where the amount is under a pre-determined amount, for example, R50.00, simply because it is too much admin. – This, in theory, allows employees to every day “steal” R49.00 without facing any problems…
Too many mistakes in deliveries –
- A well-oiled system would have extraordinarily little (or no) mistakes.
- If delivery totals are incorrect too often it might be your staff selling products on-route and not having enough to deliver to the customer. – Employees involved in the selling of your products would normally early in the shift meet their “buyer”. The buyer might see something else and convince the dishonest employee/s that he/she wants that. As they are already compromised, they would normally agree to sell it.
Employees living the “high” life –
- No matter how much you earn, you do not eat expensive takeaways every day of the month. – Where employees are found eating takeaways almost every day you need to be concerned. Their takeaway expenses are funded by the employer…
- If you have deliveries and your delivery driver regularly return with take-away food for everyone, you need to be concerned. The cost of that takeaway food might be covered by the illegal selling of products.
Alcohol Consumption and Socialising after shifts –
- Alcoholic beverages are something not everyone buys regularly. If a group regularly meet and socialise after their shift and consume alcohol you need to be concerned. The cost of those beverages was covered by the proceeds from sales of the business owner’s products.
Certain Employee/s being favoured –
- Where you get complaints that certain employee/s are being favoured by the superiors when it comes to disciplinary action not being taken, or the allocation of tasks, you need to be concerned. – The superior’s position of authority might be “compromised”, hence him/her not being able to act against perpetrators. (The superior was seen stealing or doing something stupid and this is used against him/her.) They might also be involved in a syndicate with the ones they protect. – Do not simply view the complaints as “disgruntled employees” complaining. Inconspicuously check if there is favouritism and if so, investigate.
Gossiping in the Workplace –
- Honest employees might be caught up in a system where they do not agree with the dishonesty of co-workers. As they feel scared and intimidated, they would very seldom tell the “real” truth, so they would start gossiping (many times false stories) about the dishonest, hoping that an investigation would be started, which would reveal the “real” facts.
- Do not simply ignore gossiping. – We have seen that a simple interview with the gossipers reveals unbelievably valuable information related to syndicates.
Employees in “Competition” with the Employer –
- Many employers have staff discount on products as an incentive to employees. (The aim is to provide employees with a benefit. Unfortunately, many employees then start selling these products to others, which is in direct competition with the employer.)
- Many times, employee/s would build up a significant client base that need products and as the employee/s are (normally) limited to what they can buy, this leads to misappropriation of company stock. We have seen in investigations where employees would sell double or even triple the volumes, they are buying from the employer…
- As good an idea it might sound to give staff discount, it almost always leads to problems, and employers are advised not to do it.
Copyright Protected. Compiled by Willem van Romburgh April 2020