Youch... seems kind of harsh for a missed entry. Stuff happens...
I used to work in a warehouse, where for 8 years we didn't use a time clock. I was a lead hand, so I helped keep track of peoples time...Generally it was if your late a few minutes, and it doesn't happen often... No problem. If you're constantly late, you get docked. I switched careers to digital printing, and now we use a time clock.
For the first month, I forgot to clock in or out either at the start of the day, or at lunch, or end of the day a few times. Usually when I became really busy and rushed, and I ended up working into my break / or late, and was rushing out, it just slipped my mind. Manager signed my card, and that was that.
We since got rid of punching in / out at lunch... All it did was cause a line up of people 3-4 minutes before lunch, then people would come clock back in after lunch, and still spend 5-10 minutes doing nothing... didn't solve nothing, so the company removed it.
We still have a few people who take advantage of it, take longer lunches... But generally lunch is a set hour, if you're caught in the lunch room after that time, you better have a good reason.
I do think clocking in the morning / end of shift is acceptable, but I've always hated the lunch part, and I'm glad we've gone away with it.
If you're employees will be cheating the clock, either by coming in late or not... a time clock wont solve that. They'll just check in, then go hide on their phone, or in the washroom, or something else. You can't really fix a bad employee, you can try... and it may help, but in the long run.. if someone wants to cheat you, they will find a way. it's not worth it to punish the good employees for a few bad employees... instead deal with them specifically.