jiro, it's wonderful that you have such confidence, but not everyone is like you. While I agree that it is a good idea to address the matter by starting with her manager, I still think that IronQueen deserves to know all of her other options.
You failed to read that IronQueen definitely has witnesses. She's got co-workers and a best friend who has seen what this nasty manager does. Nothing wrong with trying to get other people to help. Hey, and if there is a camera taping her register, this is an evidence she can use if the manager tries to lie.
I think it's worth trying to address this nasty manager's behavior before throwing in the towel. It is likely that this could easily resolve itself, but IronQueen deserves to know her other options to take.