News reports say that the two owners of a 7-Eleven franchise in Daytona, Florida "earned" an extra $4.9 million by way of a computer error in their favor. Allegedly, the two were erroneously reimbursed for credit card transactions made at their convenience store that should have gone to 7-Eleven corporate.
According to this news story in the Orlando Sentinel, when the owners took over the franchise from 7-Eleven in July 2007, 7-Eleven corporate made an accounting computer error which allowed the franchise owners to mistakenly receive a transaction fee in their bank account for every credit card used at their store.
From October 2007 until November 2008, the franchise owners received nearly $5 million dollars in credit card fees that should have been sent to 7-Eleven corporate. The only reason 7-Eleven ever found out was that new billing software was installed at the store in November 2008 and the error was discovered.
In the meantime, the franchise owners hid the money among some two dozen different accounts across the state of Florida and refused to turn it over to 7-Eleven corporate when it asked for its money back. As a result, the owners were arrested.
What is a bit surprising is how poor 7-Eleven's internal corporate financial controls were that no one there noticed they were short a few millions of dollars from a franchise with a solid source of revenue.
Robert N. Charette is a Contributing Editor to IEEE Spectrum and an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.
