How Do Sales Managers Steal? Top Fraudulent Schemes

10/04/2019, 5304 views
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How Do Sales Managers Steal?  Top Fraudulent Schemes

I'm sure you've heard of fraudulent schemes that sales managers use quite often. Kickbacks, theft, lies – those are the tools that cheaters know perfectly, and by using them they rob their company of profit.

In this article we'll look at the most common (and not that common) fraudulent schemes sales managers use and we’ll tell you how you can finally catch the thief.

Spot the Differences

This is a classic scheme of double deception that works when paying for services in cash. Sales manager deliberately drives up prices during negotiations with customers. In his company the deal is carried out at face value, and he pockets the difference between the real price and the amount of money he gets from the client. As you understand, joke's both on the client and on the company that provided the service through that manager.

Closing the deal, manager prepares two sets of documents, one for the customer, and the other for the company's accountant. Those documents look almost the same – with one tiny difference (I bet you can guess, which one). To type different prices, manager creates his own 1C account in advance or brazenly uses the company's account (if that’s the case, there is always a risk to be caught during audits).

Swap in 60 seconds

This way of earning dirty money is similar to the one we've described above. The difference is that the manager doesn't even need to create his own 1C account. All he has to do is replace the current price in the program with a higher price, get money from the buyer and then change the price back.

A client that sells auto parts told us about this scheme. Sales manager in his store constantly changed prices and pocketed the difference. That being said, the appetite of the sales manager can grow, but the number of clients that will be ready to buy auto parts at such prices will inevitably decrease.

Unite and conquer

This is another way to steal a tasty piece of the so-called company cake (which works when paying for services in cash and with retail customers). The manager diligently works for around a month, sells merchandise, ships it, makes new deals, gives customers the documents, accepts payment in cash. Meanwhile, none of the transactions is officially carried out through accountants.

At the end of the month the manager prepares documents that depict only one wholesale transaction. As you understand, the price for wholesale clients is usually more profitable, which means that the manager collects this “lucrative client's” discount for himself.

“Selling at cost price”

It's a very primitive stealing scheme when the manager buys the goods “for himself” (as in with a big discount) and then resells them to the client. As a result, the buyer gets the product either at the store price or at a slightly lower price.

The company doesn't bear significant losses, but the result is still the same: the manager pocketed the difference, which makes him a thief.

Chinese Market

This scheme is relevant in stores with a wide range of products. It works when the sales manager is quite cocky and the customer doesn't really know what he wants to buy.

Manager sells cheap Chinese products, but on the paper it's described as expensive. He tries to find a decent knockoff, because the client may ask questions if the product breaks too soon and, as a result, the lie may be exposed.


There are several types of this scheme; here are the main ones:

  1. Double kickback. It's possible when the transaction involves a manager on both sides. Let's suppose your company sells some type of service for $1000. The manager on the buyer's side puts the price of $1100, and the sales manager indicates the price of $900 (a supposed discount). As a result, both managers pocket $100 each.
  2. Discount. Sales manager negotiates a good discount for his customer, having previously agreed with the customer that he will receive interest from it. Such scheme is popular between companies with long-term relationships.
  3. Cutting. When purchasing an item, the supply manager asks the purchasing manager to describe in the invoice an item with similar characteristics (that are difficult to compare), but much more expensive. Managers split the difference between the real and the stated price.
  4. Simulation. Sales manager makes a deal and waits for cash payment. Then he says that partners demand a kickback. At the same time, manager claims that the clients only want to communicate with him since they already trust him. The company doesn't want to lose neither profit nor clients, so they agree to pay kickback.

Unfortunately, kickbacks are an integral part of business processes of many former USSR countries. And it doesn't look like the situation will change any time soon. But it's one thing when the company management knows about the upcoming spending plus it may somehow benefit the company, and it's another thing when the money settle in the sales manager's pocket.

Leaking client base

Sometimes managers don't need to steal money from the cash register or by receiving kickbacks – they can make money on the client base. Unscrupulous manager can sell contacts to competitors. “Advanced” fraud can even poach clients to his own “grey” firm.

How can you identify a stealing employee?

There are a lot of “traditional” methods to identify a fraud. You can listen to rumors (there is a possibility there will be someone in the company who knows about the manager's exploits), control prices (by monitoring employees’ expenses), pay attention to detail (special attention to the employees' quality of life or where they hold meetings, for example).

There is, of course, a more modern approach – employee monitoring software Kickidler. Our program enables the users to catch a fraud. It has time accounting, analysis of productivity, control of violations, option to watch employees' screens in real-time and record their desktop activity. Sales managers won't be able to run the schemes that used to work for them even if they want to, since it will be definitely caught by Kickidler.

We've described the story how a dirty sales manager was caught in one of our client cases.

We should mention that we have nothing against sales managers, and we truly believe that the vast majority of these professionals are honest people. However, if at least one out of ten managers turns out to be a thief, the company could suffer significant losses.

Employees are fine with deceiving customers and their own employers, because “that's what everyone does” and they manage to get away with it? The company that has Kickidler monitoring system will be able to monitor and have control over everything that happens during working hours. Not only will you find the thief, but you will also be able to prove his guilt easily.

Kickidler Employee Monitoring Software

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10/04/2019, 5304 views
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