Why trust isn't a financial control for Kiwi businesses

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2026 July 15

Think internal fraud only happens to ‘other people’? Think again.

A recent headline-making court case revealed how a senior store manager at a major New Zealand supermarket managed to siphon off over $200,000 over several years.

She defrauded her employer using unauthorised staff loans, rigged repayment terms, and a steady skim of gift cards. Her senior access to financial systems and the level of trust she held meant that nobody was looking over her shoulder.

While this happened at one major supermarket, the vulnerability exists in almost every business across New Zealand - big or small - especially those giving managers the freedom to ‘run their own ship’.

Key blind spots slipping under the radar

Kiwi companies want to empower their people. But giving individuals total control over staff payments, expense approvals, and invoicing without independent oversight is a massive gamble. Too often, long tenure and a good reputation obscure the actual risk.

Fraudsters rarely steal a massive amount in a single day. Instead, they bleed businesses dry through high-volume, low-value channels. Think internal credits, dodgy refunds, misappropriated invoices, and internal credits. Separately they may look like rounding errors, together they can total a company-altering sum.

In busy organisations, especially SMEs, everyone wears multiple hats. Because of lean teams, the classic ‘segregation of duties’ completely breaks down. If the same person is approving, processing, and reconciling transactions, you’ve essentially handed them a key to undertake fraudulent activity.

Most business operators only discover they’ve been robbed after a manager resigns, a whistleblower speaks up, or an unrelated audit takes place. By then, the money is gone, and the damage could have spanned years.

Could you absorb the loss?

If you don’t have insurance to cover these scenarios you may like to reconsider.

Even if you do have insurance, you may not actually have the right cover.

Standard Public Liability, Statutory Liability, or Professional Indemnity policies will not pay out for employee theft or dishonesty. If you don't have a dedicated policy therefore, you are absorbing 100% of the loss.

You need Crime or Fidelity insurance. This is specifically designed to cover the gaps left by employee dishonesty, cash misappropriation, stock theft, and expense scams. For high-volume, high-turnover operations, it’s a must-have.

Furthermore, if you make a claim for fraud, insurers will look closely at your internal governance. If your business has weak segregation of duties or informal ‘she'll be right’ practices, insurers may heavily increase your excess, slap you with strict exclusions, or refuse cover altogether.

Insurance is your financial safety net, not an excuse for poor financial oversight.

Practical things to consider

To ensure your company isn't the next one in the headlines, ask yourself the following questions -

• Who guards the guardians? Is your team subject to independent financial reviews, no matter how long they've worked for you?
• Who is counting the credits? Who reconciles your corporate accounts, employee expenses, and internal adjustments, and does it happen at least monthly?
• Are small discrepancies leading to big ones? Could minor, department-level adjustments be accumulating into a massive material loss right now?
• Are we actually covered? Does our current insurance policy explicitly include Crime or Fidelity cover?

The bottom line

Trust is a wonderful culture builder, but it’s a terrible financial control.

Regularly stress-testing your corporate governance and checking your insurance policy against real-world retail scams is the only way to protect both your bottom line and your brand reputation. Don't wait for an audit to find out you've been compromised.

Not sure if you have the right cover? Give us a call.