Exclusive: LI restaurant owner says she lost thousands in gift card scam carried out by her staff
A local restaurant owner said she is the victim of a gift card scam that cost her hundreds of thousands of dollars and believes it was carried out by her own employees. She is now warning other business owners about the signs to look for.
Kelly Bossard bought Pearl Restaurant in Island Park in October 2021, but she noticed sales were off about six months later.
Bossard started to take a closer look at her daily transactions, beginning with her gift card program. She said she spotted red flags buried in her point-of-sale system. Team 12 Investigates reviewed sales records that show repeat transactions on gift cards and inconsistencies. The documents revealed that gift cards were bought and used within minutes of each other.
"This is not the way gift cards are used," Bossard said. "You don't redeem and activate in the same day or the same minute."
Bossard believes former employees manipulated her processing system to program money onto gift cards without actually collecting any money. She discovered that the system could be altered to remove alerts on repeat transactions and allow coding over gift cards.
"So whenever people came to pay cash, they could actually pocket that cash and cash their checks out to their gift cards," explained Bossard. "And your point-of-sale system will tell you that you collected that money on a different day and that it's a gift card."
Nassau County police have confirmed they are investigating, but no arrests have been made. The possible scam is now affecting customers who legitimately bought gift cards.
Signs are hanging up in the restaurant that state they are unable to process gift certificates at this time. It has prompted concerns from some customers who have not been able to redeem their gift cards despite previously paying with credit cards or cash.
"The police have shut down the processing platform so we can't read what's on the cards," Bossard said. "Even if they have receipts, we can't read what's on the card at this time."
Bossard is asking for patience. Once the investigation is complete and the system back online, she said she will be able to honor gift cards as long as customers bring their receipts.
Meanwhile, her story is a cautionary tale. Bossard advises other business owners to check the transaction history on every gift card and make sure fraud alert tools are activated on their processing systems.
She believes this type of potential scam can happen to anyone and said it nearly brought her to the brink of bankruptcy.
"We are the victim of an egregious and a nefarious crime, but it has been to the detriment of us, our business, our reputation, but also our customers," Bossard said. "To be taken advantage of like this is a really hard thing for the business."