8 fraud schemes that a store owner should know about

The actions of fraudsters are one of the most significant risks in managing a trading business. Fraudsters can be found among employees, suppliers, and customers. It's important to know the most common fraud schemes to avoid falling into the scammer's net.

How suppliers cheat

1. Deception with prepayment
In the current environment, using prepayments is like playing roulette. Nothing guarantees an entrepreneur protection from scammers. They hide behind different disguises: they come on behalf of well-promoted companies, on recommendations. And some scammers are able to deceive even after many years of working together.
The most popular way to cheat is to create fake one-day companies and websites with names that are similar to well-known brand names. Sometimes these are copies of the pages of promoted companies, where the only difference is in the contact information field.
After the prepayment, the enterprising Ostap Benders evaporate along with the money. The same can happen to trusted suppliers whose cash reserves have been wiped out by the crisis. And as it turned out, they never had a conscience.

2. Cooperation with China
Supplying goods from China is a separate topic for articles. In this area, prepayment scams are even more common than in other industries.
In China, you can find products at symbolic prices. At the same time, you can get both very decent goods and complete illiquid. However, you need to carefully calculate all the costs of delivery and clearance so as not to go into the red. Accounting for expenses and income for such activities should not be done manually. It is better to automate the process by entrusting this important task to the Torgsoft program. This will give you better and more efficient control over inventory balances, revenue, and the prevailing volume of purchases.

There are a lot of fraudsters in the Chinese industry, and they are especially common for those who are just starting to do business with companies from China. Local suppliers agree to work exclusively on a prepaid basis. They demand to pay from 20 to 50% of the cost of a batch of goods.
Scammers attract entrepreneurs by offering incredibly low prices. They assure that there are no quality problems, that they are ready to make discounts because they are just entering the market and launching production. They disappear immediately after receiving the transfer. And even if they stay in touch, they stall or start referring to misunderstandings, strikes, and rising raw material costs. In general, they demand payment for the goods in the usual amount, the same as in all other companies.

If you refuse to pay extra, you may be left without the goods and without your own money.

3. Cheap trial purchase
Not all manufacturers from China evaporate after prepayment. They may even send the goods at the stated price. A typical scheme of Chinese suppliers is to sharply raise prices after a trial batch.

Such methods of deception are especially common in the field of construction products: linoleum, wallpaper, tiles, laminate flooring.
The second batch of products may differ from the first in quality, and for the worse. Chinese quality is unstable. You can't order the same product variants. The difference will be visible in everything: in shades, texture, and material composition. Local manufacturers are well aware of this. And when they see that their goods are suitable for a businessman, they start raising their prices over and over again.

If you don't have strict criteria for choosing products, you can get scrap metal for the price of a car. And there is nothing you can do about it.
Laws do not define the concept of "quality of goods" well. This definition is subjective, and everyone interprets it in their own way. In China, quality is rarely excellent. Simple T-shirts can shrink, shed after the first wash, or tear when you try them on. And the color scheme will not necessarily match the one that was displayed on the company's website.

Correspondence with the supplier leads to the fact that the supplier assures you that his managers have confused something. And he is ready to sort it out as soon as he receives the defective goods back. He even promises to send another batch at his own expense. This trick is for naive and inexperienced businessmen. The fraudster's task is to stall for time until the deadline for filing a claim has passed.

How buyers are cheated

1. Vlashtovuyut scandals
The most common type of scam is known to many. Customers receive change in small coins and distract the cashier. And then they say that they were given the change incorrectly. And they are short to 5–20 hryvnias. When recalculating, it turns out that this is true. Sellers in such situations don't get involved with brawlers. They don't want to take a break from work to figure out the problem and prove their innocence. Especially because of small amounts! They give the money away. And that's exactly what the fraudsters wanted.

There is only one way to prevent such incidents: carefully count the change and give it out with the receipt.

Another option to secure your trading business is to use an accounting system. For example, Torgsoft. It greatly facilitates the process of creating all the documents necessary for business. Waybills and invoices are issued in one click and printed on a printer. It is quite easy to distract the seller by manually filling out a sales receipt, but with the automation of the trading process, it will be simply impossible.

2. They talk through their teeth and hide the bills
Buyers rarely ask sellers many questions. And if they do, it's not always with good intentions. After answering endless questions about discounts, prices, and methods of caring for things, the staff may lose several hundred hryvnias in the cash register.

Talkative people are not the only type of fraudsters who steal money from the cash register. Some rely on sleight of hand rather than eloquence. With the skill of a magician or juggler, they fold the bill into their sleeve. As a rule, they come to the checkout with penny purchases, for which they want to pay with large bills. When the salesperson opens the cash register, they assure him that one of the bills in it is the one they have given. If there are no banknotes of this value in the tray, they quickly disappear. If not, they put on a circus show. They start opening their wallet and showing everyone around them that there is nothing in it. At the same time, store visitors have already seen an orange or green piece of paper in their hands.

It's easy to counteract this: when receiving a wad of money from customers, the salesperson should say it every time: "Here are your 200 hryvnias." Those who like to bend bills try not to mess with such employees.

3. Return the goods back

Another type of fraud on the part of buyers concerns the "return" of goods. Such scams are pulled off by groups of visitors. While one person tries to pay for a cheap product with a bill, others distract the seller. And then the seller starts returning the products they don't like. If the seller refuses, the outraged customer even offers to "compensate" for the purchase: "Take your goods and 50 hryvnias, and give me back my 200." In response to the employee's embarrassment, the "support group" starts shouting and playing along with the scammer. A good defense is to try to make a written return. The form should include the passport details of the "buyer". The mere suggestion of giving a passport is sobering to many scammers. And they simply retreat.

How sellers cheat

1. "Framed"
This scheme is commonly used by grocery store employees. They buy half of the goods from the wholesaler under invoices. And half of it is taken for sale without any paperwork. The seller then sells the "his" and the legal goods in turn. The employee keeps the profit from the unaccounted-for batches.
Fraudsters try to sell off "leftover" batches of products first. After all, they need to hurry so that the "setup" is not discovered by the owner of the outlet or officials from supervisory authorities.
You can combat this by organizing all purchases yourself. Another option is to fully automate trading processes. You can also ask customers for help. Usually, they do not receive a check for the "left" product. Posting a notice on the counter with a phone number and a request to report a receipt is a common practice.

2. Nakruchuchuyut
Fraudulent sellers use handwritten forms for price tags to draw inflated prices on them. They pocket the difference from the real price. Once again, process automation is a guarantee of controlling the human factor. A barcode scanner and receipt printer are the easiest options to avoid such problems.

Trade automation is an effective way to protect yourself from fraudsters and common fraud schemes. The Torgsoft accounting program pays for itself very quickly, and you can try it for free for 30 days.