Business Trusts Customers, Pays Big Price


Example of an American grocery store aisle.

Image via Wikipedia

You have been hired as a consultant to help a struggling retail store chain figure out how to become solvent again.  They did well in the past, but now revenues just never seem to cover expenses–they are bleeding red ink.  After surveying a few stores, you notice an empty coffee can at the front of every checkout lane.  There are a lot of employees pushing paper at headquarters and meandering around the stores, but when times got tough, management decided to go to the honor system for customers–cashiers were replaced with coffee cans for customers to deposit payment on the way out the door.  By management’s own estimates, 15% of potential revenue is lost to customers who underpay for their goods.  What to do?  What to do?  Well, you suggest, how about moving some of the employees back to the cash registers in order to collect full payment?  Management shrugs and says, “We have just been borrowing to cover those losses.”  Now the bad news:

  • The business is the federal government.
  • Customers are the taxpayers.
  • Lost revenue is underpaid taxes.
  • Former cashiers were IRS agents.
  • Borrowing will be about $300 Billion in 2011.
  • This is no joke. (http://bit.ly/hPvha3)
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