On-line Trade Show - Seminars
Theft in the shops, pt. 1
by Art Little
This article appeared in the May 2002 issue of Transmission Digest.
Theft in the work place is pretty common and you know it effects your bottom line. So, how do you deal with it when it happens to you? I know shop owners that are afraid of the employees and say nothing. I know of shops where the owner is so out of touch with his business he does not know his employees are stealing from him. Others know about it but, see it as cost of doing business. Myself, I don't care if it is a hose clamp, it might as well be a thousand dollars. I take it personally. It is just like they are taking my billfold out of my pocket and taking the money that I was going to spend on my kids from me.
If you need money, come and ask me for it. I have loaned thousands of dollars out over the years to employees like many of you have. I'll give you the money. Just don't steal from me and don't steal from my employees or customers. I'm not stealing from you. Don't steal from me. It's pretty simple. It wasn't that long ago, here in Texas, that we hung horse thieves. Sometimes before they ever got a court date set.
If you have employees stealing from your shop you have to do what ever it takes to stop it. It causes too many problems to mention. Now, most of the time, I don't like to have to fire an employee. However, a thief is the exception to that rule. Once I know about it, I am patient and relentless. When I catch this criminal, I take great pleasure in firing him and making his life miserable.
Normally, I will take the employee in the office and release him after work when all other employees are gone so he can keep his self respect. I help him load his tools and try to not burn the bridge with any employee. However, with a thief, all bets are off. I like to have a public execution so everyone that works for me knows that this guy got fired because he stole from me. If he threatens me, I will step up and give him a chance to express himself. If it turns into a physical confrontation, I will protect myself. And when it is over, I'll call the police and have him arrested for assault. You may have figured it out by now, I have a zero tolerance to theft.
When you become Dick Tracy and start trying to find the theif, it is important to be cautious about accusing someone of being a thief. You do not want to call someone a thief and then later find out you are wrong. That is why you take your time and make sure you have the right person. We will talk about that in next month's article. If you have ever been accused of being a thief you know how it made you feel. However, when you accuse the wrong person of being a thief, it will make you feel even worse. I have made that mistake and it still haunts me today. I lost a good friend and employee behind it. To accuse the wrong person of being a thief is something few forgive.
I don't want to make you paranoid, but it is a fact, that your shop is a sitting duck for theft. Everyone you come in contact with today, and some that you never come in contact with, may steal from you. Let's look at the line up.
Managers can steal from you six ways from Sunday. The most common way is to not make up a repair order on a cash job. Another way is to pocket any cash payments on account receivable. They just don't give the customer a receipt. Minor repairs where no parts are bought and no repair order is made up is another popular way for thieves to steal from you. They just don't make up a repair order or give a receipt. Mangers can send your customers to a competitor and get a kick back. If you are paying them 8% and their buddy down the street will give them 10% for a referral, then they can make more money with less work. Every salesman's dream. Get the picture?
I heard a newe one the other day was inventive. This manager would sell the job & write up a repair order for a major repair. Then, he would call the customer back later and tell him he needed to buy some external parts in order to complete the repair. He said he was going to go to the parts store after work and pick them up so he could get their car back to them on time. They would say alright and the next thing they knew, he was standing on their door step asking for parts money. Keep in mind, this is on his own time. It was like he was doing them a favor. He would get cash or let them write him a check so he could go cash it and buy parts. He was doing them a favor. Then, when the customer came in to pick up the car, they paid for the major repair only. Nothing was mentioned about the external repairs on the repair order. Everybody was happy and the owner was none the wiser.
As a general rule, watch out for the manager that sells dirty or manipulates money or favors from the staff. If he is lying and stealing from your customers and abusing his authority with your employees, chances are he will lie and steal from you too. I could go on and on, but for the sake of time lets move on to the builders.
Builders are not to be outdone by the managers. The most common way to line their pockets is to write up a worn and damaged parts list and not put all the parts in the customers unit. Instead of going in the customers transmission, these parts find their way to the builders vehicle so he can drive off with them and sell them to someone else for cash. The lazy ones just steal the parts you have on hand. Never leave a builder alone with your customer. Many times the builder will tell him to have it put back together and bring it to another location where he is doing side jobs. They will also steal the stock units you paid them to build. I have even seen the bolder crime lords bring in a side job and use my parts to build it on company time. I bought the parts and paid him to build a side job. Please. I quit carrying a gun with me after this episode.
Installers can be pretty crafty too. Most of the time the installers steal out of the customers cars or take tools from other employees or the shop. They are your misdemeanor criminal employees. Small time. However, some of the more advanced criminal minds will partner up with the manager or builder, or both, as their accomplice. Of course the managers and builders make them the fall guy in case they get caught. Installers are usually criminals that are just getting started but make great witnesses at the trial.
Bookkeepers can also steal from you. These are crafty individuals that steal from you on paper. White collar criminals if you will. If these embezzlers think you don't keep up with what comes in and what goes out, the sky is the limit. The most common way is for them to purchase products with company money for their own personal use. Bookkeepers also get in bed with the managers or builders or both sometimes, in a criminal conspiracy that is very hard to detect. There are ways to break this mafia organization that I will enlighten you on next month.
Parts houses will steal from you too. How? Let me tell you a little story. We had three shops, all in the Dallas area, buying from the same parts house. One year, I remember I was crunching numbers and decided to see what I could do to get my parts cost down. When I started comparing the prices we were paying for various parts, I noticed that we were being charged a different price at each store! Mad it not the word. Their explanation was that they put shops on different buying levels. The more the shop bought the better buying level. Instead of putting all three shops into one, they had separated each shop and given each shop a different buying level.
After asking them if they were kidding me, and that is not the word I used, they said that they now see my point that by putting all three stores together, we would get a much better buying level and save some money. I told them to figure up my bill and I went over and closed the account because that qualifies as theft to me. Don't get me wrong, I like parts people and there are many honest and fine parts people out there. The point is, it is up to you to find them.
Tow truck drivers can steal from you too. I was using the same tow service as one of my competitors used. My competitor had this guy in his pocket. He would have the tow driver handing out his business cards to customers and telling them that if they were not happy at my shop to call this shop. Give me a break.
I also caught a manager loading one of my stock units on a tow truck. I saw them carry it out and watched the tow truck pull off the lot. When I went in the office and asked to see the repair order for the stock unit that just left on the tow truck, the manager said he had not had time to write one up. Right. I asked him how much he sold it for. He said he told the tow truck driver he was going to ask me if I would sell it to him for 275.00. I asked him where the money was. His story was he had not been paid. I asked him when did we start letting work go out the door without being paid first. No answer. While he stood there, I called the tow truck driver and told him I was going to need 1500.00 for it. He decided to bring it back. After the manager unloaded it and put it back on the shelf, I fired him and called the owner of the tow service and explained why I was closing our account. I'm telling you, you have got to watch your back in these shops.
There are professional criminals out there that we have to contend with also. I came into the shop one morning and all of my technicians tools had been stolen. 40 cars on the parking lot and no tools. On top of that I was paying each of these poor guys their hourly wage to bitch about it. I have been called by the police at 2:00 Am and dragged out of bed because someone through a torque converter though my plate glass window and broken into the shop. Of course the cars with high dollar stereo's and wheels are ripe for the picking. You have to put them inside at night or you may get the opportunity to call the customer the next morning and asking him if he has full coverage on his car insurance.
The worst was when I visited a shop that was broken into and set on fire. When I walked in the office area was closed because the heat of the fire had blown out the windows and the manager was sitting at a desk out in the shop answering a princess style phone he had brought in from his daughters room. All the paperwork had burned up so he did not know how to get in touch with his customers. He did not even know their names or how much he had sold the jobs for. The thieves had stolen all the good tools and all the good stock units and sabotaged all the lifts. When I think I am having a bad day, I always use this memory as a reference point to cheer myself up.
Last but not least is the customer. Many times the manager will leave petty cash or cash collected unprotected in his desk drawer and the customer will take it when he is on a road test or distracted by another customer or employee. I once caught a customer stealing my TV out of the lobby. I had a customer send his wife in to fake a fall so he could collect on the insurance. The insurance company paid them $4,000.00. Theft? Yeah, that's theft.
I had a customer come up and steal the rims and tires off his own Mustang, then, come in the next day, as I was opening the shop, and ask me what I intended to do about it. He got mad at me and called the police. When they got there I told them that I was going to look into it as soon as I get the shop lined out for the day. The same thing I told the customer. I told them he was disrupting business and asked them to remove him from the property. They asked him for identification and come to find out, he had an outstanding warrant for theft. Yep. You guessed it. They put the cuffs on this mental giant and took him to jail. Don't you love it when the customer calls the police on himself?
It is clear that there are various forms of theft in a transmission shop. When it happens to you, and it will, remember; how you handle it effects your bottom line. I have given you the benefit of my position on theft and touched on a few of the more common forms of theft this month. I hope that helps you. I know there are new shop owners out there that need to be aware of what they have gotten themselves into. And, for the experienced shop owners, maybe this piece will be reminder to you to always be on guard. Next month, we will look into ways to protect yourself from theft and other criminal activity. Until then, take care of each other out there and don't take any wooden nickels.