The 5 most common business scams

How business scams work at stores, gas stations, etc. — and how to avoid them: Internet ScamBusters #290

Today we have a real treat for you. Today’s issue is on business scams. However, we first want to share a valuable new resource which answers so many of the questions about Internet safety we hear day in and day out.

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We highly recommend you download “Internet Safety” now — and be sure to recommend it to a few people you care about as well.

OK, on to what you’ll find in the rest of today’s issue…

Business scams hit hard at retailers trying to survive the downturn in the economy. But sharper eyes and a few simple security steps can eliminate many of them. This week, we highlight the 5 most common pitfalls.

Let’s get started…

The 5 most common business scams

Business scams cost owners hundreds of millions of dollars, probably billions, every year. And with the economy staggering, the scammers find rich pickings, especially among smaller firms struggling to survive.

If you run a company or maybe are thinking about going into business, you can improve your chances of success by knowing the games these tricksters play. Many business scams are aimed at people in the retail business, especially convenience stores.

It’s not only how much money the business scammers steal that hurts. The disruption to your business, the need for extra vigilance and security measures and the cloud of suspicion it throws over customers and employees can also cause a big, long-lasting headache.

In this issue, we identify 5 of the most common business scams used in stores. In a later issue we’ll focus on other small businesses that scammers target. And, if you’re not in business yourself, please pass these tips on to someone they might help.

1. The Money Changing Flimflam

In this scam, the tricksters aim to distract you while you’re making change. They target convenience stores, banks, gas stations and even grocery store checkouts. Sometimes, they work with an accomplice.

Either way, they try to confuse their victims into handing over too much change. Usually, they start with a big bill — $50 or more — and their trick involves swapping the notes, passing money back and forth until the change-maker loses track of what’s happening.

A good tip is to keep your hands out of reach of the customer while making change. Call a halt if you think you’re being flimflammed. Bring in an associate both as a witness and to help backtrack and double check your counting.

2. Switching Price Tickets and Barcodes

There’s no secret to how this one works. Individuals and gangs scout out stores where they can easily swap price tags or barcodes.

Either they put a low price tag on a more expensive item and aim to get through the register with a real steal, or they put a higher-price tag on a previously bought low-cost item and return it to the store for a big cash refund.

Counter this by making it difficult to remove tags and codes and make sure staff checks article descriptions as they come up on the register.

3. Hiding Items in Packaging

Do you sell things in boxes? Can the boxes be opened in the store? Answer “yes” to both of these questions and know that scammers have you in their sights.

If you make it that easy, they’ll open the boxes and either replace the contents with something much more valuable, or they’ll add something to the existing contents — like putting perfume inside a pair of shoes.

In one case we know of, scammers placed a computer inside a box that was supposed to contain a cheap portable barbecue.

The answer here is to seal boxes where possible and just put a sample on display. If you can’t do this — as with shoes, for example — check the items carefully at the register.

Put a sign up saying it’s company policy to do these checks and you’ll probably stop this business scam dead in its tracks.

4. Passing Bogus or Stolen Checks

This is one of the fastest growing scams. Computer software makes it cheap and easy to print checks. And thieves use stolen checkbooks quickly before owners discover the theft.

More and more stores now refuse checks, preferring cash, credit or debit cards. Interestingly, the US is way behind many other parts of the world, especially Europe, where checks are hardly used in stores — so much so, that offering a check would immediately arouse suspicion!

If you do accept checks then, obviously, the main thing is to try to confirm the payer’s identity, usually by inspecting a driver’s license.

You can also minimize risk by limiting the amount you accept for payment by check or insisting that, over a certain amount, you won’t release items until the check is cleared.

5. Employees with Too Much Cash in Hand

A recent court case told how employees at a gas station reprogrammed certain pumps so they would only accept cash purchases, which, also, the register did not record. When anyone paid in cash, they kept the money, getting away with $60,000 before someone rumbled their scheme.

Pocketing cash that doesn’t go into the register is one of the most common scams in all types of sales operations, especially if the bill doesn’t involve opening the register to make change.

Of course, keeping a sharp eye on inventory and matching that with receipts should do the trick, but sometimes that’s simply not possible, especially day to day.

Tackle this one at the root by using security cameras, having an automatic customer counter at the door and posting a note on registers that says: “Please ask for your receipt.”

Some employees might not like this but that’s usually only if they’ve got something to hide. Anyway, these security measures will protect them as much as they protect you.

Making your small business work is a challenge, especially when the economy is shaky, like now, but applying the simple rules in this article will cut business scams and make all the difference. Here’s to success!

Time to conclude for today — have a great week and for our US readers, a happy July 4th!