Penney Gift Certificate ConcernsJ.C. Penney Company, Inc. has recently introduced a new point of sale (POS) system developed by NCR Corporation into their stores. In the first six months of operation, it has become apparent that there are unanticipated problems with the accounting and control functions pertaining to gift certificates. The new POS system does not provide for adequate tracking or control of the certificates on the sales floor, store level sales audit has inadequate procedures or data capture capabilities in place to track sales accurately and assign responsibility for missing certificates, and corporate accounting has no control over the gift certificate accounting on the store level and are constantly struggling to reconcile gift certificate information.Problems on the Sales FloorAt the POS terminals on the sales floor, gift certificates are being stored underneath the cash register in a drawer with no security or control. The security and control of gift certificates has been overlooked during the drafting of the procedures for the new POS system. As a result, the security and control on gift certificates on the sales floor that had been in place with the old system has simply stopped. Employees are purely on the “honor” system.When sales associates ring up a gift certificate sale they have to key 1) the appropriate twelve-digit SKU from a list of 3 choices, and 2) a dollar value for the gift certificate shown on the face. For example, SKU #1 represented the $25 gift certificate, SKU#2 represented the $50 gift certificate, and SKU #3 represented the $100 gift certificate. After the sales transaction is complete, the sales associate must manually record the dollar value of the gift certificate on their cash audit report. During times of high volume, sometimes this final step is overlooked. Typically, the cashiers are just keying SKU #1 for any gift certificate sale and keying in the appropriate dol...
