The ways theft can occur in a restaurant defies the imaginations of most of us. In O’Dell Restaurant Consulting’s blog, 50 Ways Employees Steal From Your Bar or Restaurant, the most outrageous, restaurant theft tactics are listed. These include things like, “Bringing in a pair of work shoes, wearing boots. Put liquor bottle in boots and walk out with it”. Or the “Phantom Bottle – Bartender brings in his own bottle and pockets cash from the sale.”
From colluding bartenders and cocktail servers, to theft tactics as complex and well-thought-out as Ponzi schemes, restaurant theft can occur in a million ways. Beyond the operations listed above, ringing in false orders, credit card fraud, and giving away free goods are some of the more common issues restaurants face.
Let’s talk about the most effective ways to combat theft, buffer your operations, and protect your staff and bottom line.
While the image of a server clinging to a dine-and-dasher’s car, blue and red spandex emerging from underneath a torn collared shirt, might seem the stuff of comic books, in reality the heroics of dealing with dining-and-dashing should be left to restaurant policy.
Unfortunately, the dine-and-dash is still a common challenge for restaurants. When it does occur, restauranteurs should know that in many cases it’s illegal to reduce an employee’s wages without notice - not to mention, it’s a bad idea (and sort of unconscionable) to make the server pay for the disparity out of their tips. This is a business risk that every ails every restaurant. To place the onus on the server would be to drastically impact restaurant morale.
Allocating a small portion of your budget for dine-and-dash is good risk management. Other measures to dissuade dine-and-dash theft include:
Video surveillance: entrances/exits, parking areas (and garbage areas too!) should all be covered by video surveillance if you have the budget for a robust way to identify and deter thieves.
A host at the front door: hosts constantly scan the restaurant to gauge table status in order to manage their wait list and reservations so they will be alerted to fishy behavior. Naturally, ensuring there’s always a host at the door is a good way to catch and deter dine-and-dashers.
The use of a single entrance: one way in and out – including patio access – makes it a lot harder for dine-and-dashers to get away scott free.
Cash and carry or run a tab: on busy nights when the bar is rammed, have the bar staff request a credit card so that guests run a tab or pay-as-they-go so no one gets lost in the shuffle.
“Smile you’re on camera”: …even if they’re not. So you don’t have the budget for a robust security system with facial recognition? Even a “Smile You’re on Camera” sign or a dummy camera can do wonders for deterring theft.
Credit Card Fraud Prevention
The swipe and sign credit model is inherently flawed. There’s so much room for fraud. Prior to October 1, 2015, if there was a fraudulent purchase, liability fell on the shoulders of the bank to pay the fraudulent bill. But all that has changed with new EMV compliance rules. Named for its original developers - Europay, Mastercard and Visa - EMV compliance marks a significant legal shift: accountability for credit card fraud now falls on the least EMV compatible party. This means, if a restaurant doesn’t have chip and pin technology, they must pay for the fraudulent transaction.
So how can you protect yourself? Enter chip and pin, also known as “smart card” technology. When credit and debit cards contain a chip, fraudulent behavior becomes extremely difficult to execute. While compliance is not mandatory, using EMV chip technology buffers your business against credit card fraud. Cutting edge POS solutions, like TouchBistro, have been on the money with EMV since the get-go and have proven experience in EMV compliance after operating successfully in EMV compliant countries like Australia and Canada.
Employee Theft Prevention
It’s a sad truth: statistics report that 75% to 85% of all restaurant theft is committed by employees, accounting for up to $6 million in loss from U.S. restaurants and 4% of restaurant sales. In addition, shrinkage – liquor lost due to spill or waste – can account for a significant part of the bottom line, 23% on liquor and draft beer, about 10% on wine and 2% on bottled beer.
Whether by accident or from dissatisfaction, desperation, or just plain deviant behavior, employee theft is a real thing and it takes shape in many forms. Whether it’s stealing, giving away product, or playing with the financials, there are many ways for employees to rob your restaurant of profits. Combat internal theft with the following:
Inventory: Performing inventory of all your goods on a regular basis is a business practice the high-turnover restaurant industry cannot go without. Pour control caps, weighted bar rails, and manual itemized bi-weekly fridge counts, are all ways to keep a closer eye on your supply.
Comping policy: Comping – giving out complimentary items – is arguably part of the restaurant business. It inspires goodwill from customers, allows staff to repair small service mishaps, and can generally improve the guest experience. Allocating a daily or weekly budget for complimentary items can keep you on track with your sales goals. As well, setting permissions for staff in your POS so that only trusted managers can comp items eliminates the abuse of voiding and deleting items by staff without management’s knowledge or permission.
POS security settings and controls: The single most important device you can use to prevent theft is a POS system that tracks inventory, cash flow, sales and tips. Plus, one that provides management with exclusive control when it comes to voids, discounts and deleting items. Not only does a POS create a paper trail of all transactions, but also requires the server to get permission from a manager before altering a bill and ensures all transactional details are logged and accounted for.
In every case, combatting theft in a restaurant starts with instituting a restaurant culture that inspires cohesion and loyalty amongst staff, a policy that protects corporate interests and budgetary considerations, and ends with a POS that accounts for and provides management with a record of all transactional details.
About the Author
Jackie is a Content Marketing Specialist and Social Media strategist at TouchBistro. She covers the latest food, dining, and technology trends for the restaurant industry. A lover of all things coffee, Jackie’s hobbies include breakfast, lunch and dinner.More Content by Jackie Prange