The ‘perfect’ pub, that was in fact victim of a systemic £2m fraud operation running for ten years; a frightening example to multi site operators, of the dark possibilities of fraud.
Conceding there might be a slight problem or at least some lessons to be learned, owners of this managed house called in Venners to investigate. Analysis of till receipts raised suspicion over the cash to credit card transaction ratio. Before 6pm, cash sales were 76%, after 6pm, just 33% of sales. Applying the daytime ratio, suspicions were that 64% of evening cash sales were missing, a potential loss of £15,000 per week.
Stocks were perfect but undercover observations confirmed that the pub had Sunday deliveries; credit card sales were stopped after 9pm; and staff were manually recording sales on ‘cheat sheets.’
Receiving reports of an epic problem was a moment of horror for the company that had held the ‘perfect business’ in such esteem. However on comprehending the news they quickly gave Venners the green light to ‘storm’ in and resolve the issue which led to the managers been caught ‘red handed’.
The post-mortem revealed staff receiving ‘bonuses’ of £30 cash per week – that was all it took to keep them on side. The till was used in training mode during the evening, transactions that are never recorded on reports, but can be used to produce a shopping list to cover the fraud.
In short, managers extracted £2m over ten years – hiding a ‘pub within a pub’ – just by keeping their heads down, and never having a holiday.