Magazine

PT the Auditor

Black Market Validations

This is a different one – Black Market Validations. No, it’s not the kind where someone calls a printer and prints their own stamps, or makes their own rubber stamp. This is much more devious and involves the parker, often people who aren’t parkers, and a third party, who is not connected to the parking operation.
The location is a shopping center with a large food market. The market is high volume and has a deal in its lease that shoppers buying more than $50 in merchandise would receive 3 hours of free parking. So far so good. The problem with all these programs is how to ensure that the cashier properly validates the ticket. In this case, the parking cashier asks for the receipt from the store, tears off a portion that shows the amount spent, and attached it to the ticket. Fair enough.
My audit shows that in a rather large number of cases, tickets with a very small “in” time, had an attached store receipt of a large volume of goods. I researched the time an average shopper takes to do a week’s shopping and found that it was between 45 minutes and an hour.
There were a number of tickets where the parker had been “in” for 15 minutes but had a receipt attached for $100 or more. I would really have liked to see that person running through the store. And there were other anomalies, including many tickets that had an “out” time before the “payment” time on the receipt.
Then I began to watch the area in front of the store. I would see the box boys (and girls) ask the shoppers for their receipts. (These were people who walked to the store, the majority of shoppers, and didn’t need the receipts for parking.) Many would just hand them over – I didn’t know what story the box boys gave to the shoppers but it could have been something as simple as collecting them for a contest at school.
They would then chat with other patrons in the shopping center, who did not use the food market, ask them if they parked in the garage, and if so, sell them the receipt for a few dollars. The receipt was worth up to 3 hours of free parking, which could be as much as $15. If one went to a movie, for instance, and spent two and a half hours, the receipt from the food store would pay for their coke and popcorn.
There is also the issue that the box boys could be in cahoots with the cashiers. They would provide the receipts to the cashiers and then the cashiers would display the total due, collect it, and then cancel the transaction and rerun it with the validation, keeping the difference. They would meet up later and split their lucre.
In a number of cases, I found store receipts that had been rung up for some amount over $50, then had the transactions zeroed out. In this case, the store cashier was creating receipts to be used in the scam.
There were many people involved in this theft: the box boy, store cashiers, parkers, non parkers, and perhaps the parking cashiers.
One might ask: Why do you care? So a few tickets get validated. How much are you losing. I audited one month and took only the tickets that were obvious frauds ($800 receipt for a car in 15 minutes, $50 receipt that was cancelled and then rerung for zero dollars, receipt for a time that the car was not in the garage, etc) and found that extrapolated over a year, the amount of parking revenue lost was in excess of $100,000.
The question comes down to, how does one stop it? Relying on the cashier to “catch” these and then get into a battle with parkers in the lane is not going to work. We could audit every ticket every day, but that would be economically unfeasible. I’m certain the food market would not appreciate having its customers jacked up because they were cheating in the parking lot.
Our solution was to install on line validators in the food store. These validators were connected to the store’s cashier terminals and the terminal “told” the validator, and hence the revenue control system, whether or not the customer was eligible for a validation. The ticket was then validated on line, and when the parker left, the validation was taken into consideration when the parking fee was computed.
The cost of the additional software and online validators was well less than the annual loss.
You have to be careful. This garage is in a large metropolitan area where the parking rates are high. As the value of the ticket goes up, the motivation of those surrounding the parking operation to attempt to defraud the system and collect a nice, fat, black market paycheck is very high.
In this case the parking dollar volume in the location was in the millions, so an odd $100k here or there didn’t show up easily. The other problem was how to show the owner the problem. It took me a number of months to come up with a way to demonstrate to the owner that there was a problem, and, working with the revenue control vendor, provide a solution that would solve it.
Woof

Article Abstract from November, 2010




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