Real Deal: The Case of the Pawn Receipts

There are signs one of Nancy Amos’ star employees has been stealing from her. But with no hard proof, what should she do with him due back soon from vacation?

This article originally appeared in the January 2016 edition of INSTORE.

Nancy Amos had been through a lot with her business. She’d worked with her family at Master’s Diamonds full-time since graduating from college. After her mom got sick, she took over the family’s second store in a local mall but she had struggled to win over a group of her dad’s contemporaries who were used to doing business the old way.

Finally, with the retirement of her father she was able to consolidate and modernize the business.

Now, about to head into the fourth quarter of the strongest year in Master’s history, she was feeling pretty good about the store, and about all she and her team had accomplished in the preceding 10 years.

Her upbeat mood changed one recent morning. As Nancy was putting the finishing touches on her new diamond window, a man came into the store and asked to speak with Joe Herzog.

Joe, a carryover from the now-closed second store and the company’s top salesperson, was Nancy’s right hand. He was, in her view, a key part of the turnaround and an integral part of her plan for the future of Master’s.

Joe also happened to be on vacation. When Nancy told the man that Joe was out of town, he produced a gold shield that identified him as a detective with the local police department.

After determining that Nancy was the owner of the business, he handed her a long report and asked her to review the items listed under “transactions” to see if she recognized any as missing from her inventory.

Nancy knew that since the installation of their POS system over five years ago, the store’s physical inventories had been near perfect. She said as much to the detective and asked what, specifically, he was looking for.

Nancy’s anxiety escalated as the detective’s story unfolded. He told her that the items on the list were all pieces that one Joseph Herzog had sold at 27 different pawn and cash-for-gold shops over the past four years. In all, the department’s fraud division had tracked over 500 transactions, with payments to Joe totaling well in excess of $100,000.

Nancy felt nauseated.

She agreed to cooperate fully with the department’s investigation and to keep the matter confidential until they knew exactly what they were dealing with.

Her first task was to take the complete list of sold items and scrap gold lots the detective had compiled and to start looking for any indication of where Joe may have gotten them.

As Nancy looked through the list line by line, she started to realize how easy it would have been for someone intimately familiar with the store to have walked off with so much — and how impossible it would be to prove.

She thought about all of the unclaimed repairs in the back room, some of which had been taken in by her father years before his retirement — back when tickets were written by hand. She also remembered the little spare parts drawers in the shop — mountings, findings, shanks, chains and just about anything else that might have accumulated over the years, but that were never documented. When she thought about her actual inventory, she realized that it was Joe who was in charge of researching discrepancies.

By week’s end, Nancy felt strongly Joe had somehow been stealing from the store, but she also knew she couldn’t prove it.

With Joe due back the following Monday, her head was spinning with questions. Joe was her top producer, and he had a lot of friends and contacts. What if he were running some sort of used-jewelry buying business on his own time? What if he were buying directly from people who came to the store to sell old jewelry? She couldn’t prove that even a single item on the list came from the store.

THE BIG QUESTIONS

➤ Should Nancy quietly dismiss Joe based on her suspicions?

➤ Should she try to talk to Joe before the detective comes back to question him?

➤ If she digs deeper and finds items are missing from the store, should she press charges and risk horrible press for the store?

RETAILER RESPONSES

Rex S.

Houston, TX

Nancy should definitely not try to talk to Joe before the detective comes back to question him. To do so might compromise the investigation and could result in an obstruction of justice charge. If Nancy digs deeper and finds items are missing from the store, should she press charges and risk horrible press for the store? Yes. Over the last 63 years and over 4,000 employees we have been the victims of internal theft. In the last 21 years, those thefts have resulted in prosecution and felony convictions. The arrest, trials and convictions received no notice from any media. In fact, after convictions were handed down those customers and members of the trade who did find out about the situation were all congratulatory that we prosecuted and did not allow these criminals to get away. It is everyone’s civic duty to help prosecute anyone who commits a crime.

Shevvy B.

Louisville, KY

Nancy needs more proof first. Maybe hire a private detective to follow him. If he is confronted, he must be able to give a logical explanation for his actions.

Dennis E.

Grandville, MI

We had the same experience with a trusted employee. Nancy should call her corporate attorney. Have him draw up a letter stating effective immediately he is terminated. Send it FedEx overnight. Do not call him or answer any of his phone calls and do not let him into the store. Do not give any reasons or make any comments about why she let him go. It sounds like Nancy is an “at will” employer and can fire at will. Do not talk to Joe ever again as you may say something that could give him a reason to start a lawsuit.

Eric P.

Elk River, MN

She absolutely should not tip Joe off by talking with him or by doing anything else until the detective tells her it is appropriate to do so. It is the detective who should interview Joe about the situation, not Nancy. If it is found Joe has been stealing from the store, she should press charges.

Marcus M.

Midland, TX

So let me get this straight: You’re the owner and you don’t know if an employee is stealing from you? Put all of the nonsense aside of him being your best seller and confront him head on when he gets back. I’d call him in to my office and really get him squirming in his seat. I’d tell him to pay back everything he made off of the merchandise from my store and my customers and if he did, I wouldn’t press charges but he would obviously be fired. You clearly have a scumbag and a bad situation on your hands. Step up, be a leader and do what’s right for your store.

Dan B.

Provo, UT

She should talk to him and imply that she has evidence and see if he spills his guts. If she doesn’t feel comfortable with the interview then she can hire a private detective to do it. They are very good at getting confessions.