How do keep employees rounte personal Honest?

[Beach Bum Vending]

hello everyone

 

My better half and I were talking last night and we were wondering what can you do to keep employees / family member service techs  anyone with access to your machines honest?    What can you do to check on that and make sure not skimming few bucks here and there.   Just think if took $5.00 a day for a year that would add up over time.  5x5=25 x 52 weeks that be $1,300 in a year that is nice little unapproved bonus.  Mission, RJT, some you other bigger companies who have few routes how do you handle and check into this?   It is a issue I hope to address before I have to hire employees.   What are some ways to protect your money? 

[Maddog3632]

I am not a big guy but believe I am sensible. I suggest if you question whether this is happening to show up prior and count the money, disable the bill validator so that it can't take more by draining one of the coin tubes. See what your driver comes up with it most certainly should equal your amount . This must be in a location where someone doesn't know who should be there servicing otherwise might give it away.

Just an idea?

[RJT]

This is one of the chapters in my book that discusses theft.

 

Employee and General Theft

 

If you are going to hire someone to stock machines, fix machines, etc, be advised that they can be potential thieves. I have seen it all in the vending industry. I have seen family members, part time preachers, claimed “Christians”, part time police officers, etc steal money and products from vending companies. When dealing with cash, it is too tempting. Does this mean anyone you hire will steal from you? No, I have had employees that I knew would not steal. However, I did “setups” on them just like I did on the ones I thought would steal or the ones I thought were stealing. Think of it as random drug testing. It is better safe than sorry. Ronald Reagan once said about Russia “trust but verify”. This goes for your employees also.  I could steal thousands of dollars from a vending company and they would never know until it was too late. Then they would have a hard time prosecuting. It has been my experience that it is very difficult to prosecute thieves. It is also very time consuming and in the end probably not worth it. A smart thief working in the vending industry does it slow and methodically. He or she will take $1.00 per machine per day, so that you will not notice. Over the course of a year, it can add up to thousands of dollars. Let me give you an example. One dollar from 30 machines per day is $30.00. Multiply that times 5 days per week. That is $150.00 per week and $7800 for the year. Pretty good Christmas bonus or pay raise for a route driver or service tech!

 

Another trick is selling out of your machines. In the industry we call this being “in” business with you.  They do this by buying popular items from a wholesale club just like you do and putting them in machines instead of your products. Snickers candy bars and other popular candy items and can drinks are the most popular items to do this with. This method is the most “sneaky” of the tricks because it is very hard to detect. Also you will hear employees that are stealing from you talk about how his “route is off” or how slow some of his accounts have become. He is trying to mentally prepare you for shortage in money. He will talk about folks complaining about prices and how they have stopped buying as much, all the while he is stealing.

 

One of the most extreme ways a route driver will steal from you is by staging a fake robbery. They will either say they were robbed or the truck got broken into while they were in one of their stops and the money was stolen. They usually will do this on one of their heaviest money pull days and always towards the end of the day. They will, on occasion, work with a partner. They just simply take the money and hide it and then go back and get it later. Usually their stories don’t add up and they will get caught in a lie. I highly recommend you involve the police with any break-in or robbery of a truck, even if you suspect it was internal theft. If you suspect it was internal theft or a fake robbery, then tell the detectives on the case so they can ask the right questions.

 

I think some employees that steal do not intend to steal in the beginning. I think they “borrow” the money with the intentions on paying you back. They “borrow” the money for cigarettes, cell phone bills, diapers, etc and then never pay it back. Eventually it becomes a habit. Money and inventory management is key in any business and vending is no different. There are electronic inventory systems that can be implemented but they are costly. They have to be added to each machine, and are operated with a handheld unit that tracks sales and inventory. This is usually not cost effective to smaller companies.

 

These are just a few ways employees steal in the vending business. Stay vigilant and from time to time setup all your employees who have access to money or machines. Also consider this, if an employee eats just $3.00 a day in products, that’s over $1000 a year in loss.

 

We have talked about employee theft but we also need to talk about outside theft and robbery. A vending truck can be a target just like a pizza delivery driver. Some companies choose to not brand their trucks for this very reason. They feel the risk/reward factor is not worth it. What you get in advertising is not worth the risk of making your drivers a bigger target. They make safes specifically for vending trucks that can help “secure” the money. However it was always my policy that drivers have access to the safe in case of a robbery. Making a driver use a safe with no access to opening it can be a dangerous situation. No amount of money is worth someone’s life. In the end you will have to decide what is best for you and your company.

 

You will also have to deal with people at accounts trying to steal product from you by shaking machines, breaking the glass, etc. One method used is by running a wire up through the delivery door and pulling out products. The industry calls this “fishing”. Pay close attention to your break area and keep an eye out for wires like straightened coat hangers hidden around the account. Look on top of the machines, under them, behind them, etc. Most of the time kids are doing this, but I have had it happen in other type accounts also. In a college one time we had a machine in one of the dorms. We got a call that the machine was vandalized. I get there to find a quarter size hole burned in the front plexi glass of the snack machine. After burning the hole with a torch lighter they took a coat hanger and jerked product out of the spirals. They even jerked some of the spirals out of the motors. If you work in vending long enough it is not “if” you are going to get hit, but when and how bad. Do everything you can to secure your money and products.

[Beach Bum Vending]

yes RJT  I read your book what brought up my question.  Didn't really go into detail of you do this process??   How do you do that RJT?  And "check" on your employees?  

 

Thanks,  Beach Bum

[RJT]

Here is how I did setups on employees. I knew which accounts they were going to ahead of them and did an audit on the machine as far as the money count and then went right in behind them after they left and did another audit. Another easier way is to pull all the money and put in a known amount back in. Then after they leave pull the money and do a count. Even with a few sales it should be the same amount or just over the set amount and not less.

 

I did this at random accounts and if was pretty sure they were stealing I did it over the course of a few weeks/months to monitor it closer.

 

Let me know if you have any questions.....

[AZVendor]

This is a very good question to ask of the professionals here.  This subject is often overlooked, especially when vendors believe they can trust the friend or family member they employ.  Speaking from experience, the very first thing you need to do is realize that you can trust no one when dealing with cash. 

 

As far as service techs go, you will either have to meet them at the location to watch over them or you will have to trust the tech from experience and simply wait to see if anything suspicious comes up.  As a service tech myself, I have never had a customer question me about any missing cash, but I am always concerned that a route driver might take money, knowing I was just there and blame the shortage on me.  I also worry about what the location personnel might think when they see me put money back into my wallet and pocket if I have had to use my own money for testing purposes.  Again, this has never been an issue for me yet in 13 years, but there are some techs in this area that I wouldn't trust to even touch a machine let alone access the money.  I have some customers that insist on meeting me because they don't want to put a common lock in the machine for me to access with or give me a copy of their keys.  However most of my customers either give me a copy or are regularly using common keys or will put a common lock in for my access.

 

Now to the sticky part of your question.  Again, do not trust any employee.  If they know they are being supervised and watched, regardless of if they are a relative or not, they will be more likely to be honest.  I learned this by running my vending company with 3 route drivers for 16 years.  You must put controls in place to allow you the ability to know when cash is missing or to know when something suspicious has happened.  These controls are referred to as Route Accountability and you need them in place at the machine level, the truck level and the warehouse level (if you have one), for cash and products. 

 

The bare minimum level of control you need is at the machine level.  This can be accomplished by following route accountability steps that include reading meters at every cash collection.  These meters are built into the logic boards of all late model machines or you can install a unit counter in any single price machine.  The logic meters are best used by reading the non-resettable cash meter at every collection.  The simple formula to use is Beginning Cash Meter (from last end meter) + Coin Added (from outside source) - End Meter = Expected Cash in collection.  Compare the cash collected and counted to the Expected Cash and you will have the over/short of that collection. 

 

The Coin Added item is for refilling the coin tubes from a change bag issued to the driver.  This is a must as the coin box will not always have the correct number of coins in it to refill the tubes.  Making sure the tubes are filled to the same level every service is important as a fluctuation in the tubes will affect the over/short of the machine.  If the tubes are low and not refilled, you will have an overage. If the tubes are properly filled the next service you will then have a shortage.  These over/shorts may balance out, but don't allow the drivers to regularly ignore this part of the job or you will never know what to expect.  The change bag itself should be issued each week with a known value of rolled coin.  Any time the driver fills the tubes with coin from the change bag, it must be noted on the route ticket so you can track how much coin was used from the bag and so you can subtract that added change from the collection of the machine (coin added externally is cash not generated by sales).  At the end of each week you count the remaining change fund then perform the calculation: Begin Fund - Adds to machines - Remaining Fund = End Fund which should equal the beginning amount.  Any difference means the driver is not recording the information correctly, or stealing from the change fund.

 

In order to make the driver accountable for products you will use the formula Beg Inv + Adds - Stales - Pulls (back into inv) - End Inv = Units Sold.  I always did this by categories such as chips, cookies, candy, bag snacks, pastry, gum/mint, etc. as prices would be the same for all products in each category.  Then you can perform the product accountability by category instead of lumping it all together in a nightmare inventory.

 

As to methods to use to keep tabs on drivers, knowing their route order is a must as well as knowing where they should be at any given time.  This is best learned by running the routes yourself or with the drivers so you can learn the timing of the stops.  Once this is known, and if you suspect a problem employee, check the machines ahead of them at one or two stops and count the money in each machine, read the meters and, if you suspect they are stealing bills, mark some of the bills (5's are a popular target) so you can verify that all have been included in the collection bag.  Once they return the cash bags, audit each one to see if anything is amiss.  You must do this a few times if you want to fire someone for cause, but you can probably fire them the first time you confirm it using this method.

[RJT]

We even went as far to mark bills in UV ink and got LE involved. The day we took them down they had the bills on them that were marked with the UV ink that said SCSO. Which stood for Stanley County Sheriff Office.

[AngryChris]

The short answer: there isn't much you can do to keep them honest.  However, there is much you can do to prevent the amount of theft that takes place.

 

The bigger question is... how much are you willing to SPEND to protect yourself from theft?  You could invest hundreds of dollars in every machine to enable them to send you sales reports.  This will increase accountability, but it won't necessarily prevent theft.   You could also install GPS tracking systems in your trucks to make sure that your employees aren't wasting fuel and doing unnecessary traveling.

 

On a much cheaper level, you can set traps.  If you know an employee is going to service a machine that almost always makes $50/week for example, you can count the bills in the validator ($40 for example) and add $30 in bills to the validator.  The vendor will probably notice that it was a good week.  If he/she brings $68 in bills back (and you KNOW there was $70 in that validator), this is borderline PROOF that he/she stole some money.

 

You can also have your employees record meter readings from the machines at every collection.  It is still difficult to figure out because the coin mechs have to hold the exact same amount of money between collections or the money collected could appear different from the meter reading from one week to the next.  However, they should be very close in the long run.  This will NOT account for coin jams or refunds though.  Coin jams will make the money collected appear higher (because they weren't counted by the machine) while refunds will make the money collected appear lower (because they were counted by the machine but not collected as they were given to the recipient of the refund).  Taking meter readings is probably the best way to do things.  If you make sure that EVERY refund is accounted for, the money should add up to be very close to the difference in meter readings but a money shortage is no guarantee that the money is being stolen and an overage is no guarantee that the employee is being honest.  The money trap is probably your best bet.

 

I have had thoughts about whether or not I even want to have employees in the future.  I might stop growing at $4,000/week in revenue and live off of that by itself.  It would be enough to keep me busy every day of the week but also leave enough time for repairs and bookkeeping.

[AngryChris]

Keep in mind that the service techs are generally smart enough to know how to steal without getting caught.  A service tech always has the excuse of testing a validator.  They might be $10 short from a meter reading even though they only tested $7 in bills (because they took 3).  You would never know how many times they tested that validator though.

 

Every owner just needs to remember that the level of service that an employee provides to a customer can be far more profitable, even with theft, than an employee who does not steal but offers terrible service.  I was set up for some traps a few years ago when I worked for another vendor.  No one ever approached me about theft (probably because I never stole anything) but I did see a co-worker get fired for what seemed to be stealing.  It turned out that he would pull money from one machine and split it up between 2 other stops (so he wouldn't have to service them).  This made it appear that he was stealing from one machine when he was actually just providing an absolutely terrible service.  I guess they figured that out once they checked his story out (they must have found more money in the machines he supposedly collected from).  From my point of view though, he was still stealing as he was paid by the hour and would use this practice to enable him to sleep in the back of the truck for about an hour at a time.

[Maddog3632]

This stuff is like a science! And you all are scientists.

[chris in bc]

There is a science to any business! Lock your cashboxes, lock your bill inspectors. Back to the basics..!

[Beach Bum Vending]

There is a lot of good advice in this thread and I appreciate all of the input by everyone.  If anyone else has more too add please do. Lots of great ideas and ways to track and check up on employees.   Thanks  Everyone.

[Walta]

The happiest venders I have known had few employees outside the family.

 

The way I see it once you hire your first route man you need to 2 so you can stop running a route and by the manager so they do not walk all over you.

 

The biggest thief I ever saw was the route manager. He was the first to arrive at work every morning. He rode his men hard and was tuff as nails. He was a long time employee no one would ever suspect. This was an amusement company with 7 routes. He would get a new location have the equipment installed but only sum of them got set up for collection. He would run them himself. So the company bought him a route and installed it for him.

 

The thing about thieve is most of them can’t stop. If they took 1 or 2 coins from each machine no system would ever catch them.  But if they get away with 1 dollar then they can’t stop then they have to try for 2 then 5 then 20. At some point it becomes obvious.

 

If you want to track your truck and do not need real time data.

This is the tracker I carry with me. No monthly fee. Prints a report with max speed per day. Draws map that shows traveled route.

 

http://www.amazon.com/LandAirSea-GPS-Tracking-Key-Pro/dp/B0030DH0HU

 

Walta

[mission vending]

All machines made in the last 20+ years have nonresettable meters. Separate bag for each location, with a slip naming the location and the meter readings from each machine.

When its time to count, cash and coin totals are compared to the meter reading taken and the difference to the previous reading. Its not always a exact match due to fluctuations in coin mech levels but when you track the totals over time the trends become obvious over time.

The best deterrent is that they know you are watching. A occasional question like, "hey the cash count was off by 6.75 from the meter, can you tell me why?" Maybe it was refunds or refilling the mech or test vends but if you keep getting the same discrepancies and the same explanations its time to set some traps like have been mentioned.

Remember this is a cash business and don't trust anyone 100% or you are going to get ripped off, more often by friends and family then by some guy you hire off a help wanted ad...... provided you do a good reference and background check.

[rmorris1953]

There is a lot of good points here about catching a thief. But no mention of what if you are wrong! Machine break and machines do give away product and money at times. The thief maybe someone who has no keys or access to the vendor.

 

27 years and I have seen a lot. I haven't seen it all.

 

Mars validators.... 2000 series. Have seen them many times take a dollar give credit make buy hit coin return and get dollar in change. Many times

 

Light bulbs go bad...... Jackpot money and product. Royals & AP 

 

Door lock failed .... Sometimes the route driver and sometimes the lock.

 

Someone at the account making up false refund slips.

 

I have seen good drivers be accused many times for equipment failure. PEPSI was the worst of all. I have seen good drivers fired... 

 

I have saved a few from being fired....

 

I am just saying be 100% right before firing someone. I would suggest maybe move your people around so no one services the same machines all the time. 

 

 

If it seems like a certain drivers machines are always short no matter where he is then you are more than likely right.

 

All your drivers should know where the accounts are so when someone is on vacation you can compensate.

 

It will be pretty obvious if the driver has moved from a little here and little there. They get stupid and that is when they get caught.

 

I have been setup before. 3 times I know of because they told me afterwords I passed. 

 

Pay your drivers good so they don't need to steal from you.

[spdydre]

a friend of mine here had his brother and fiance running his route.  They were stealing $1500 a week lol I could never let anyone run my route unless it was a small manageable route I would let them run to free up more time.