How our driver stole $8000 in Cash on Deliveries!

This really happened, and then we made an even bigger mistake and kept the guy on...

When we took over Roving Logistics back in 2012, we inherited a bunch of clients with Cash On Delivery (COD) requirements. For some, we were warehousing their stock, picking orders and then sending them out on our vehicles. For others, we were simply cross docking. Cross-Docking is where you pickup orders in bulk from a client, bring it back to your warehouse, sort it into delivery runs (areas), then send out drivers to deliver each run the following day.

Our process was all manual, all paper, and was as follows:

1. Use large trucks to pickup consolidated pallets from clients, then bring back.
2. When back, take the paperwork into the ops office and sort it all into little pigeon holes for each of the runs, ie: South, East, West, City etc.
3. Break down the pallets and sort the individual cartons into the correct runs, (hoping the same run-decision was made on the paperwork side...)
4. Anything we packed in the warehouse would be sorted onto the same runs, and paperwork slotted into the same pigeon holes as the cross-dock orders.
5. Next day, drivers would head out with a run, and all of the associated paperwork.
6. They would bring back signed paper Proof Of Deliveries (PODs), which our admin staff would manually check one-by-one for a signature, whether the order had COD and if so, collect cash / cheques from driver.
7. For all CODs collected, we'd create a "Banking Sheet" in Excel (a list of all the orders we collected cash or cheques for), then either send the cash back to the customer on our bulk pickup truck, or bank it into their account.

So... how could a driver steal so much money from us if we were checking everything?

Simple really. If no paperwork came back from a driver, we had no record of the job, and therefore we didn't know they had collected COD.

I'm not sure if it was by chance, but the driver seemed to have figured out which of our clients were the worst at chasing CODs or PODs. From there, he simply wouldn't return the proof of delivery if the job was COD and he was provided cash, so we wouldn't be asking him for the money, and our client wouldn't query us for the cash (for several months).

It was a pretty major loophole, and very easy to exploit, yet we're amazed at how many SME 3PLs we meet can be done over by the exact same issue.

On the back of this experience, when we built CartonCloud, we built in a very robust Cash On Delivery module. When Sale Orders and Manifests are imported, the client must specify whether or not they require COD.

From here, on the mobile app the drivers are prompted that the order requires Cash On Delivery, and they must either confirm they have collected, or explain why they haven't. This information is then fed back, allowing admin staff to see the status of a COD (collected, received at depot, etc), and track the COD all the way through to being either returned to the client, or banked into their account.

Unfortunately for us, at the time we worked out our driver had stolen from us, the amount mounted to around $8k. We forked out and paid back our customers.

We then doubled-up on our bad decisions by agreeing to keep him on in order for him to "repay" what he had stolen in instalments. We still didn't have our COD module, so he stole some more, then simply never showed up to work one day.

Lesson learned!