@Sassyzan, no, I don't live in a vacuum. Thanks for asking.
@cakefat, I'm glad your company seeks legal and " how should I run this business " advice from the bottom tier, manual labor employees.
The OP stated himself that the business as been running for 3 years and that several times, he tried to give insight to the owner on some procedures that he should definitely implement to run smoothly. All of which seems to have been ignored over a lengthy period of time. The OP is obviously a kind and too caring of a person. He needs to just sit back, do the proper job his been doing all this time and stop caring about the way the owners want to run THEIR business. For some reason I doubt the OP salary reflects his work as a decorator / legal / business and management insights. Especially since he already tried over a lengthy period of time to get some things to change without avail.
And having a boss with poor business practices is hardly a reason to walk out the door. At least not until a better job is secured. And as far as everyone in here knows, a 200$ cake refund over a 3 year period might be a lot cheaper then getting boxes and doing things right. It's how the car industry works, as long as compensating damages and injuries is cheaper then a recall, they don't do recalls.