This Highly Scientific Chart Reflects My Experiences of the Past Four Years
So Many Things to Write About!
There are many things competing for my digital ink today. Microsoft has released a workbook size optimizer and I owe someone named “Doody” a post on that. I have more to add to the last two posts. I have a “tournament rules versus prison rules” post that is dying to get onto the page, inspired by Jeremy Bartz. My wife and I spent yesterday with Chandoo and his family.
But something in the news recently brought another long-simmering topic to the foreground…
“We Steal Millions From Our Customers, and They Have No Idea”
Pilot Flying J Allegedly Underpaid Fuel Rebates to Multiple Trucking Firms –
a Practice That Only One Such Firm Detected!
An absolutely fascinating story is taking place in Tennessee. The FBI has raided the headquarters of Pilot Flying J (a huge chain of gas stations and truck stops across the US), and even seized the computers of top execs, in connection with a scam.
The alleged scam goes like this:
- If you’re a trucking company and operate a fleet of 100 trucks, you buy a lot of fuel.
- That makes you a very valuable customer for someone like Pilot – they want your business.
- So Pilot offers you a rebate – if you buy X amount of fuel per month, they will refund you N percent at the end of the month.
- But certain people at Pilot figure out that smaller trucking companies have NO IDEA how much they are owed in rebates each month.
- So those people start shortchanging those smaller customers – sending them smaller rebates then they are owed – and pocketing the difference!
- This practice was referred to as “managing the discount,” or more colorfully, “jacking the discount,” or my favorite, “f—ing the customer.”
One Customer DID Discover the Scam – From the ESPN Article (Click for the article)
3.5 Cents Per Gallon in Rebates Were Withheld???
OK, diesel fuel is selling for less than $4 a gallon these days, so to shortchange someone 3.5 cents in rebates is a full 1% of the full purchase price.
Not 1% of the rebate. 1% of the purchase price. Rebates were typically around 4% of the purchase price, from my reading of the affidavit.
So they were shaving about 25% off of the discounts owed! Wow, that’s a lot of shaving!
How Did They Get Away With This?
Simple. They just needed to know which of their customers were sophisticated enough to catch it. And if you weren’t sophisticated, they screwed you:
From Conversations Taped by FBI Informants
So Much Lurking in the Dark! So Much Opportunity!
The lesson of this story, for me, is NOT that there is fraud in the world. I expect this sort of thing happens all over the place. In some sense the folks at Pilot are just unlucky that someone went to the FBI. I’m sure many companies run similar scams and are currently sweating whether this Pilot thing will unmask their own fraud.
The bigger lesson is just how many people are blind to their own data, and how expensive that is. Being defrauded is just ONE way you can lose money. Bad, uninformed decisions take many forms.
Recently Said to Me by a Top Exec at One of the World’s 25 Biggest Companies
I talk (and write) a lot about traditional BI vs. Excel, how the latter dwarfs the former, and how PowerPivot blends the strengths between the two. But make no mistake – that tension is NOT the primary change going on in the world. Nor does it even represent the bulk of the opportunity.
The primary opportunity, in terms of data, is “lighting up the darkness,” as Bob Marley would say.
We have a lot of darkness to light up. Which is a good thing for people like us.
Oh, and God Hates Cleveland!
Funny side angle: the only reason I am even aware of this story at Pilot is because the CEO of Pilot recently bought the Cleveland Browns, so the story surfaced in my daily reading of sports news.
Bill Simmons loves to joke about how “God Hates Cleveland” and this is a new angle to that story.
Promising new owner pledges to turn the Browns franchise around. Everyone gets excited. Oh wait, promising new owner may be going to jail? (The FBI alleges he was well aware of the scam over the years). Wouldn’t that be funny?