How can we make sure our 120 sales reps and merchandisers (who do POS selling and product tasting) are really visiting the Points of Sale and not just faking data or making phone calls in lieu of actual visits?

Have you taken action against the employees that submitted "fake data?" If there is a clear set of expectations and corresponding actions for performance met or not met, why would the practice continue? At a certain point, you have to trust your employees; but when they aren't meeting clearly defined expectations, respond accordingly.   Another thing to consider is whether or not your quotas are appropriately set.  If otherwise good employees are fudging their numbers, have you asked them why?  Is it possible that the behavior is caused by unrealistic expectations, especially in an economic environment in which people are so desperate to hold on to their jobs that they would act dishonestly to do so?  Is there solid two-way communication practices that would allow the employee to express concerns, or is submitting fake data an easier tactic than challenging the process?   In your recruiting and interviewing, are you asking behavioral-based questions, specifically aimed at integrity-related behaviors?  There is a very specific skillset necessary for employees who will be working independently.  If the right people are hired, and given the right expectations, your shouldn't need to even consider supervisors in every city.   The dishonesty that prompted your question must be dealt with, but it is important to review all aspects of the situation. The employee may not be the only one responsible.

Introduce a small monthly bonus for those who achieve a good record on your random verification's. If they fail to uphold the verification then they lose out on that bonus for three months. Money only motivates people up to a point. So if they're already well paid this might not work. In Harvard business review they find that providing employees the value they perceive (flexibility, simple goals, benefits etc) rather than just pay increases perform better http://blogs.hbr.org/2013/04/does-money-really-affect-motiv/. Maybe take a survey with your employees where you ask them what they would value as a reward for achieving all their quota's..