According to the New York Times, the uptick in pizza sales in Brooklyn at Domino’s Pizza is due to stolen credit card numbers being used to order to see which cards were still active and could be used for bigger purchases.

Questions:
1. Explain why the article called this a blend of high-tech fraud and street-level word of mouth.
2. Dominos was left to pay back the credit card companies for their own pies. How should the company account for this? Give journal entries, assuming that they lost 200 pies at $15 each (retail) with a 50% markup.
3. Based on the article, what type of internal control, if any, could Dominos implement to avoid this situation in the future?

Source:

Wilson, M. (2014). Pizza Orders Reveal Credit Card Scheme, and a Secondhand Market. The New York Times, Dec. 5 (Retrievable online at http://www.nytimes.com/2014/12/06/nyregion/pizza-orders-reveal-credit-card-scheme-and-a-secondhand-market.html?rref=homepage&module=Ribbon&version=origin&region=Header&action=click&contentCollection=Home%20Page&pgtype=article&_r=0)