Skimming is the practice of removing a portion of the cash receipts of a business for personal use. Skimming is most common in a business that accepts a large part of its customer payments in cash, such as restaurants and food carts. The person skimming cash may even be the owner, since doing so reduces the reported profitability of the business, and therefore its income tax liability. Since the individual engaged in skimming is not reporting the stolen money as taxable income, he or she is also engaged in tax evasion. Each individual act of skimming may be quite small, but when conducted over a long period of time, it can add up to substantial loss for a business.
Skimming can also involve the extraction of information from credit cards. This card information is then used to make illicit purchases without the knowledge or approval of cardholders.