PT the Auditor

Let Them Out! Free of Charge!

March, 2012

As parking becomes more complex and we begin to market our garages in different ways, we add products that we can sell to potential customers. One of my clients provides debit or value cards.
These are cards with actual money on them. The garage operator adds money to the card when it reaches a certain amount, and in some cases, the cardholder can add value online.
The benefit to the cardholder is that they pay for only the amount of parking they use (say they park just once or twice a week), and the garage gets the benefit of the “float” or value that remains on the cards in circulation. It’s a win-win.
(In some systems, a credit card is kept on file for these debit or value cards and that credit card is charged when the transaction is complete.)
These debit cards typically work like this. When a person enters the parking lot, the revenue control system remembers their entry time. When they exit, the system computes the fee based on the entry time and deducts that amount from the card’s balance.
In most systems, these cards can be charged at the same rate as a normal daily parker, or at a different rate depending on the deal the operator made with the cardholder. If they want to attract these parkers, the operator may offer debit cards at a lower rate than a regular pay-as-you-go daily. So far, so good.
The money is deducted when the card exits. If there is some issue at exit (the reader doesn’t work, the card doesn’t work, the gate doesn’t work, etc.) and the attendant on duty lets the driver out manually, the card never gets charged.
Since most debit cards “look” like standard monthly cards, the attendant simply re-synchs the card to keep it in the correct anti-passback status. No money is charged or debited from the card file or the stored value on the card. The customer parked for free.
At one of my locations, the client has fewer than 100 debit cards. An audit of usage for 2011 revealed a loss of more than $7,300 on debit cards improperly processed.
In this system, both monthly accounts and debit cards are set into an account. The account determines what the monthly rate is, or if a debit card, what the transient rate is.
As an example, an early bird rate or night rate may be available only if a person has a “frequent parker card.” Depending on the deals in place, there are different rates based on volume of use, areas parked and time of day parked. This is true for both monthly and debit cards.
Not a single month goes by that I do not find an error in how the cards were set up in the system that enabled the customer to pay a lesser amount than what they should have paid. This is due to both the quality of the person doing the account setup and their attention or lack of attention to the details. Sometimes good help is hard to find.
To catch this problem, we are placing a colored decal on the access card to designate that it is not a monthly access card, and we are using a range of numbers. All cards in the 3,000 series are “value (debit) cards” in case the decal is removed.
We also are running an automatic “alarm” message report every 24 hours on all card numbers in the designated series. Any alarm message has to be counter-signed-off by the manager to indicate that the account was properly charged.
In addition, we are running an automatic report once every 24 hours to show “denied” credit card transactions that management would have to review.
If a value card account shows up, the duty manager will attempt to do a “manual” charge against the balance or credit card on file. The manager now initials all new account setups in the system done by clerks or duty managers to ensure that the access cards were correctly programmed and activated.
As is always the case, all of these tools were available. With employee turnover, it was simply a matter of better training. We have now written a standard operating procedure (SOP), specific to the facility, showing photos of the various forms and screens that should be used in the event there is, say, a language issue or reading impairment.
I also found out, on review, several things on credit cards:
The manager was not showing credit card refunds on the daily report, thus we were refunding 100% of the charge, but netted only the parking fees less any tax. Now the manager must note any refunds so the operator can adjust that month’s tax payment accordingly. With an 18.375% tax, a $410/monthly fee is $346.36 for parking and $63.64 in tax.
If the manager found an error and did a refund, and the customer also realized there was an “unauthorized” charge, the customer would request a “credit” from the bank. Since the facility owner also “owns” the credit card account, the garage was either not notified of the contested charge; was notified but after the response time permitted; or was informed in time and the manager simply said, “Oh, I refunded the account.”
The manager on duty did not realize that he had refunded the money and that the bank was reversing the charge as well. This provided a double credit to the customer.
These are all problems when you move the accounting and payments away from a central/regional office. They also are easy to resolve with an SOP and communications between the parties involved.
So here we had a situation where nearly $7,500 was lost and there was no theft, just an equipment failure. But since the system was completely automated, there was no backup to catch the problem or fix it.
Now, however, with an SOP in place, the error will be caught and proper charges made.