For Theater Owners.

This is written for Theater Owners, because when an employee steals, it is your pocket that they are stealing from. A recent study conducted by an outside independent agency concluded that anywhere from 5 to 20% of gross takings were being lost due to fraud, theft, and waste. The largest examples of this became evident when a national chain was taken for all of the summer receipts from one of their four screen theaters. Another well known incident is the manager that defrauded the ticket receipts for more than $ 30,000.00 over a six month period. The reason that these incidents became common knowledge was because of the amounts involved. These individuals got greedy. The incidents that go unreported are the thefts that amount to $30.00 per day to $500 per week mainly because these individuals never get caught and supplement their income. They are content to draw their usual pay and pilfer an additional paycheck.

The most common area for theft is the concession area. Theft can be controlled to some degree with the implementation of computers, scanners, strict inventory controls and other means. All of these solutions have a simple flaw, they all depend on the manager. All of the solutions mentioned are to keep the concessionists honest. Where the occasional concession person may pocket the extra 5 or 10 dollars a night, it is the manager that can pocket the 50 to 100 dollars without getting caught. If the concession person comes up short a couple of times, they are terminated. But who checks the manager ? The District or city manager usually lacks the experience and training of what to look for regarding the consistent theft and fraud that managers can establish. When computer systems are integrated into a theater, usually the district or city manager has little or no idea how to check up on the managers, therefore if the paper work looks right, the counts of stock are right, the figures must be right. Wrong. Many of the computer systems on the market actually help a manager fraud you. I say you because it is your theater that is being stolen from and that is no different than reaching into your pocket and taking the money.

The largest amounts of money are stolen at the box office. While it is easier to steal from the concession receipts, there is bigger money in the box office. Almost any 10th grader with an interest in computers could "hack" into many computer ticketing systems. This is where fraud can go unnoticed for years. Lets take, for example, one of your 10 screen theaters who for the past 5 years has always done well, average to above average grosses with a constant per capita, would you miss 10 tickets a night ? At $6.00 per ticket that is only $60.00 per night. Not a major amount but this comes out of your pocket and lets say the manager actually closes 4 nights a week, now that is $240.00 per week or an extra tax free $12,000 per year ( two weeks off, paid vacation). This is an example of a manager who is not greedy, a thief yes, but not greedy.

Because the theft is a relativity small amount it is not suspicious and it can never be tracked because the sales never show up with many computer systems. The manager simply deletes the tickets or arranges for the computer to never record some tickets numbers to a particular show and runs the computer reports just like normal. Nobody is going to miss 10 or 15 tickets on a movie that did 150 - 300 tickets that day. Hard tickets are even easier, with the reselling of ticket stubs, etc. There are several other methods of stealing but most of the others involve additional personnel and that in itself causes problems for the thieves. The more people that know or are involved, the greater the chance of getting caught.

Most of the computer systems available today give you the tools or access to the tools to perpetrate this crime against you. The same companies that you are paying 10 to 100 thousand dollars to computerize your theater are providing your managers with the means of frauding you and the film companies of your full receipts. Most MS-DOS TM , Windows TM , Windows 95 TM, Windows NT TM, and other common network solutions can, will, and have been frauded.

The next time you are at the mall, go into one of the computer stores and just glance in the Utilities software section. There you will find all the programs, priced from $25 to $75 dollars, that your manager could purchase that will allow your computer system to be frauded. These programs are simple to use and come with detailed instructions. Many software companies will refute this information saying that their data is encrypted and there are checks and balances that prevent this from happening. While you are in the Utilities section of that computer store, check the encryption and Unencryption programs available too. No data that is accessible is secure.

There are other ways of frauding a computer system that have nothing to do with having any computer knowledge at all. One of the simplest, netted one manager almost $10,000 before he got to greedy and got caught. The methods mentioned here were mainly done by one person without the knowledge of any one else in the theater knowing what was going on. It can easily be hidden from the employees, assistant managers and other colleagues.

What can you do as a theater owner to make sure that you are actually getting all of your receipts ? Invest in a quality computer system, not necessarily the most expensive because that just adds insult to injury when your super expensive computer system is frauded, but one from a reputable company that has no history of being frauded. A company that can explain why the system is not susceptible to the types of fraud mentioned here and can back it up (Details of how to fraud ticketing systems have been left out so your managers don't get ideas). Talk to other theater owners and find out what kind of system they use, would they use it again and why? Check out how often the system "goes down" and how long it takes to get it working again. Make sure that the company has a good service department. The computer being down is a quick way to pocket numerous tickets if the service department could not be reached or took too long to respond. Do your homework and find out what kind of system the program runs on and check out the computer store for ways to break into that system or application. ( Operating Systems are MS-DOS TM , Windows TM , Windows 95, 98, or 2000 TM, Windows NT TM - Applications are MS Access TM, dBase TM, Foxpro TM, C TM, C++TM, Delphi TM, Visual Basic TM) Check with your own "computer expert" about these type systems. Have your district or general manager work with the ticketing company to become educated on how to look for fraud or other suspicious things from the system. After all, it's your money.