Anasazi Earth Clothing is a retail store specializing in womens clothing. The store has established a liberal
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This year, returns at Anasazi Earth Clothing have reached an all-time high. There are a large number of returns under $100 without receipts.
a. How can sales clerks employed at Anasazi Earth Clothing use the store’s return policy to steal money from the cash register?
b. What internal control weaknesses do you see in the return policy that make cash thefts easier?
c. Would issuing a store credit in place of a cash refund for all merchandise returned without a receipt reduce the possibility of theft? List some advantages and disadvantages of issuing a store credit in place of a cash refund.
d. Assume that Anasazi Earth Clothing is committed to the current policy of issuing cash refunds without a receipt. What changes could be made in the store’s procedures regarding customer refunds in order to improve internal control?
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