Five Forms of Employee Fraud to Be Aware Of
Before evaluating solutions, retailers need to understand the types of fraud they’re facing.
Many forms of employee fraud involve a customer accomplice. Some of these tactics include:
- Sliding: Intentionally obstructing an item’s barcode when scanning. Cameras register the transaction as standard, but the accomplice posing as a customer doesn’t pay for that merchandise.
- Sweethearting: Giving an inappropriate discount to friends, family or other accomplices.
- Stripping: Using an independent barcode scanner instead of the store’s scanner to scan gift cards, making it appear as though the cards are being treated as a legitimate transaction. The gift cards are then activated and used. The cards may be returned to the rack to circumvent inventory controls, but the card is now worthless.
- Thimblerigging: Creating commotion at checkout so that items can be taken without detection. This can be done by the employee removing the barcode from an item or by orchestrating a scene involving an honest cashier and relying on the innocent employee’s confusion to avoid the accomplice paying for an item.
- False void fraud: Keeping a customer’s receipt, then using it to create a fictitious void and returning the charge to the complicit customer.
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Card-not-present transactions — where neither the card nor the cardholder are present during payment — is another form of employee abuse. If a retailer allows CNP transactions, employees may be privy to cardholders’ verifying information, such as a CVV number or billing address. All an employee has to do is use that information, either at the retailer he or she works for or at another retailer, to commit CNP fraud.