Report: Companies worldwide lose 5% of revenue to fraud
Austin, Texas Organizations around the world lose an estimated 5% of their annual revenues to fraud, according to a survey of certified fraud examiners who investigated cases between January 2008 and December 2009. Applied to the estimated 2009 Gross World Product, this figure translates to a potential total fraud loss of more than $2.9 trillion, the report said.
The Association of Certified Fraud Examiners (ACFE) published the results of the survey and the report includes global data among the 1,843 cases of fraud that were studied.
The report found that, not surprisingly, fraud schemes are extremely costly. The median loss caused by the occupational fraud cases in the ACFE study was $160,000. Nearly one-quarter of the frauds involved losses of at least $1 million.
Occupational frauds are much more likely to be detected by tip than by any other means. This finding has been consistent since 2002, when the ACFE began tracking data on fraud-detection methods.
Meanwhile, fraud committed by owners and executives were more than three times as costly as frauds committed by managers, and more than nine times as costly as employee frauds. Executive-level frauds also took much longer to detect.
The report also indicated that small businesses are especially vulnerable to occupational fraud. These organizations are typically lacking in anti-fraud controls compared with their larger counterparts, which makes them particularly vulnerable to fraud.
Fire up some savings
As it has become more challenging for retailers to demonstrate value on leading brands, one of Target’s favorite strategies is the $5-gift-card offer when shoppers purchase two or more featured items. While it’s a nice bonus to get $5 for free on items shoppers purchase regularly, this week’s “wow” item is a Brinkman-brand gas grill featured in the retailer’s circular. Available in red or stainless steel, shoppers can receive a $100 gift card for purchasing the $329 product with free assembly. The allure of $100 makes the prospect of purchasing the grill much more compelling.
Target wins again, but who saw it?
Brand Target scored a victory this weekend at the Indianapolis 500, when Dario Franchitti took the checkered flag for Target Chip Ganassi Racing. Franchitti led 155 of the race’s 200 laps to claim his second Indianapolis 500 victory. Not only did the Target sponsored car win the race, but the other car Target sponsors, driven by Scott Dixon, finished in fifth place. That’s great news from a competition standpoint, but unfortunately from a marketing standpoint the Indianapolis 500 is not platform for marketing communications it once was. Interest in the event continues to wane as numerous empty seats were visible in the stands throughout the race. And from the standpoint of television viewers, there is nothing worse or more boring that when a driver leads from wire to wire as was practically the case with Franchitti’s dominant showing.