Padding the Numbers

By Jim Firsich, Associate Member

Retail store managers occasionally manipulate inventory systems to increase their year-end bonuses and preserve their jobs. Here's how to find this fraud and deter it. 

Alex is excited. This manager of a chain discount store thinks he'll be receiving a substantial year-end bonus - if he meets the company's projected numbers for his store.

But as the months progress, his store falls short of projected sales goals, and the loss prevention manager warns him of an alarming rise in shoplifting and suspected employee thefts.

However, at the end of the year the store apparently meets its goals and Alex receives his fat bonus.1 The loss prevention manager is mystified. He wonders how certain store departments have drastically reduced huge losses.

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