While the hospitality industry is varied, from casinos to touristy souvenir shops and outfitters to hotels, hostels and bed & breakfasts, from meal carts to experiential events and from recreation and theme parks to travel and event planning, the common theme is diverse opportunity for individual theft or fraud.
Generally, smaller venues have lower supervision rates which provides more opportunity, while part-time and seasonal staff display a greater propensity to involve themselves in minor theft than in tightly controlled larger corporations.
Many owners of smaller operations view controls and recordkeeping as a task rather than a means to increase profitability, which enables and opens up more opportunity.
Small retailers with a plethora of items in inventory are more difficult to monitor and thus easier to steal from.
Customers often are not repeat customers, which means there is less likelihood of theft or fraud being spotted by them and less likelihood that they will report incidents. Unfamiliarity with local practices and rules and even unfamiliarity with currency enables cheating.
Generally, opportunities are more low-level, but higher frequency than larger businesses.
Cash on-site transactions
Outfitters and tourism guides sometimes accept cash customers on-site. This opens the door to pocketing the cash from these sales.
Scoring (Low to High) 0-20
Snacks, drinks and other consumables
These purchases, whether they are in vending machines or open-sale, are usually cash transactions. These, like on-site tickets, are vulnerable to not being recorded.
Scoring (Low to High) 0-20
Souvenirs
Because souvenirs almost always are purchased by out-of-area buyers, they are less likely to require receipts and less likely to be returned. This makes them more likely to be subject to not being recorded as a sale. Since they often are solo items or purchased in low quantities, they are less likely to be subject to regular inventory counts.
Scoring (Low to High) 0-10
Hotel Housekeeping
Housekeeping and maintenance staff have access to all rooms, generally unsupervised, including supply rooms. This provides them with the opportunity to take sundries and linens home.
Scoring (Low to High) 0-5
Front desk
Front desk personnel should always work in pairs, to reduce the opportunity to rent rooms and sell merchandise “under the table.”
Scoring (Low to High) 0-10
Maintenance staff
From smoke detectors and thermostats to small appliances and furnishings, maintenance staff handle a variety of goods. Sometimes, they “discard” them as broken, then later retrieve them to take home. Other times, they arrange for orders from which they steal items they want. Logs and damage records will relieve some of the risk of theft.
Scoring (Low to High) 0-10
Gate receipts
Gate receipts at experiential events, cultural displays and other activities may not be recorded accurately if unsupervised. Such items as roll tickets used for meal vouchers or sales of “arms’ length” draws invite the pocketing of some of the cash.
Scoring (Low to High) 0-10
Kickbacks and bulk rewards
For travel companies, multiple bookings may trigger kickbacks or rewards that the employee may divert for personal benefit. One employee of a travel agency received over twenty free trips due to her volume purchases on behalf of the company. She sold most of them privately, depriving her employer of the sale, and went on four of the trips herself.
Scoring (Low to High) 0-10
Event planning
Events planning usually involves multiple items, including accommodations, meals, party favours, supplies and other items. These are easy to reroute, easy to assign to a friend or easy to claim fraudulent expenses.
Scoring (Low to High) 0-5
Low oversight or supervision
Because the hospitality industry relies heavily on seasonal and casual help, proper training often is lacking. At the same time, low levels of supervision in “mom and pop” operations means that inadvertent errors and intentional fraud occur more readily.
Scoring (Low to High) 0-10
Breakage, spoilage and refunds or returns
Due to the low levels of repeat customers in most hospitality businesses, it is easier for a staffer to make a claim for a customer refund or return and pocket the cash, or claim items broke or spoiled when they were, in fact, sold to customers.
Scoring (Low to High) 0-10