Is your restaurant staff stealing from you right under your nose?
It's tough to deal with the reality of employee theft, but it is a reality. As shocking as it sounds, 75% of employees have admitted to stealing at least once from their employer.
In the restaurant industry alone, employee theft totals between $3 and $6 billion dollars annually.
We talk a lot about digital security, the importance of keeping our data safe, and how to protect systems from ever-elusive hackers and viruses. The sad truth, however, is that cyber attacks are not the only malicious force capable of sabotaging your business. Employee theft is rampant in the workplace. Even if you put all your efforts into hiring reputable and responsible people, you’re bound to encounter a few folks who think they’re entitled to a five-finger discount.
Opportunities for theft will depend on the operations and setup of your restaurant, but if you think like a thief, you're more likely to recognize and prevent possible loopholes.
Here are a few sneaky ways that your staff could be stealing from you right now.
1) Self-Imposed Breaks
Everyone's on their phones these days, but this shouldn't be the case in your restaurant. If you have a lax cell phone policy, it shouldn't be unexpected when your chefs or servers take a quick peek at their phone during their shift. These impromptu breaks interrupt the flow of your restaurant, which can damage efficiency. Less efficiency = less profit.
In FSRs, staff who take mini breaks without permission make the table turn times last longer, which limits efficiency and how much you'll make that night. In QSRs, there's always something to do. Pizza boxes need to be folded, kitchen ingredients have to be refilled, counters need to be cleaned, etc. When these tasks get overlooked for a break or a cell phone check, your staff will quickly be overwhelmed during a busy shift with all the work they didn't get to when they were supposed to. This too hinders efficiency, and a lack of organization can be a big turnoff for customers when their wait time is minutes longer than they're used to at a competing restaurant.
Prevention for this issue is twofold.
First, set a cell phone policy and make sure it is enforced. Have a cell phone desk/box in the back where employees need to deposit theirs at the beginning of the shift and can only check it during set breaks. Dole out warnings to those who violate the rule and appropriately reprimand repeat offenders.
Second, make sure you have a set break policy and that employees know what it is. Breaks are crucial in this industry - your servers and chefs are under a lot of pressure to get everything done perfectly! Be generous but clear with your break policy and they will in turn deliver their best work.
2) The Short Ring
Here’s the scenario: On a busy night at the bar, a customer orders an $11 Grey Goose martini and pays for it in cash. The bartender takes the money for the top-shelf cocktail and puts it in the cash register, but rings it into the bar point of sale system as a $6 well vodka drink. The customer was charged the appropriate amount, so she doesn’t know the difference.
At the end of the night, the bartender pockets the difference between the cash drawer total and what the POS expects it to be. As the business owner, you’ll notice when Grey Goose is flying off the shelves and the sales don’t reflect the inventory, but by then it’s probably too late.
This is a common occurrence in bars and nightclubs, but it's also possible in a quick-serve environment where cash transactions are being rung into the system near a cash drawer.
The best preventative measure for short ringing is to implement a blind closeout process. Blind closeout requires employees to reconcile cash at the end of their shift without notifying them of the exact amount they are expected to return. They have to count the cash and report the total to the bar POS system without knowing what it’s “supposed” to be.
If the bartender has been short ringing all night, it’d be nearly impossible for her to keep a running total in her head of what the computer thinks the sales should be at the end of the night. If she's able to remember the difference between the actual and the short rung total after hundreds of transactions, hire her as your accountant instead.
3) "Free" Food & Drink
For some people, a freezer full of filet mignon and decadent pre-made desserts is too much to resist. Even the “complimentary” bread at the server station can add up if your staff is snacking on it every day.
Of course, alcohol is also a huge factor in inventory theft. In addition to drinking it or taking bottles for themselves, bartenders can throw in a drink (or four) on the house for their friends and favorite customers in an effort to increase tips. But it can get much worse than this.
Former President of the Massachusetts Restaurant Association Peter Christie once told me one of his employees hid in the back of his restaurant until closing so he could invite his friends in for secret parties enlivened by liquor that Christie's restaurant unwillingly donated.
To start, lock the freezer and alcohol and only share the keys with a select few of your most trusted employees. That’s an easy one.
Also, consider an inventory management solution. The technology options are becoming increasingly accurate and robust (Toast’s POS-integrated inventory management tool is available now!). To keep better tabs on comped alcoholic drinks, define and enforce a strict policy. Some examples include writing down every comp with an explanation or giving bartenders a dollar value limit on freebies.
If you’re still dealing with food theft, think about the root cause of the issue. Feed your staff before the shift. Consider occasionally serving the specials and high-end items to your staff to help offset the desire for dishes that would normally be way out of their price range.
4) Voids After Closeout
In an ideal world, you’ve hired a management staff that you trust completely. You’ve entrusted them with the keys to the building and the liquor cabinet, they’re responsible for operations on the floor, and they’re often the ones approving comps and voids in the system.
Unfortunately, with this responsibility comes great opportunity for theft. Managers, alone in the restaurant at the end of the shift, have every opportunity to void out cash transactions that occurred during the day. The books balance out in the POS system and they can take the cash for themselves.
Keep a very close eye on all voids, especially those made after close, and which manager is approving them. Your point of sale system should be able to track all of this for you and make it easy to see where theft may be occurring. You’ll notice right away if one person is voiding transactions frequently and if they’re doing it at odd hours.
5) Reusable Receipts
This scheme requires accuracy and a little bit of luck, but more than a few anonymous ex-bartenders I spoke with reported they saw this happening at their restaurant.
A customer comes to the bar and orders a Bud Light, for example - a frequently requested beverage. The bartender prints the receipt and the customer pays in cash. Instead of closing out the tab, the bartender leaves it open. Fifteen minutes later, a different customer orders a Bud Light. Instead of entering it in the POS system as a separate check, the bartender reprints the first customer’s receipt from the still-open tab.
When the second customer pays for their beer, the original check is closed, leaving the cash from that first order unaccounted for and in the hands of the bartender.
There are a few ways to make this more difficult for bartenders to pull off. Some restaurants require a receipt to be placed in front of the guests upon delivery of the drink, so every party should have a receipt in front of them at all times. That process can also improve efficiency because guests don't have to flag down the bartender for their checks.
You can also use your POS data to your advantage. Keep an eye on the average time a tab is open at the bar and which servers are frequently reprinting receipts. Being aware of these sneaky tactics can help you sniff out anomalies in your business data.
6) Phony Walk-Out
A 2011 New York Post article reported that arrests for “Theft of Service” (aka: dine and dash, eat and run, chew and screw) increased 20% year-over-year. Dining and dashing is a slimy, rude, and ballsy move, but it happens. What’s worse is that your servers can take advantage of that fact. At a busy time in the restaurant, servers can claim that a party (who, in reality, ate their meal and paid in cash) walked out without paying.
The best way to prevent this scenario is to train yourself and your managers to be aware of everyone who leaves and enters the restaurant. Maybe you have a manager touch each table that sits down. When it’s possible, relieve managers from tactical duties like food running and expediting so they can take a bigger-picture approach to the dining room. Of course, cameras in the restaurant are always an option and may be worth considering if you’re seeing a problem with dine-and-dashers or with servers lying about it.
7) Register Skimming
The oldest trick in the book. Restaurant owners who don't track their sales report are extremely susceptible to employee theft.
Your employees are smart - when they know that money isn't being tracked too closely, some may try to skim $5, $10, or $20 when they think they can get away with it. This is much more common in smaller, independent restaurants that may not have solid systems in place to prevent this from happening or track down the culprit.
Thankfully, modern restaurant POS systems make these thefts a bit more obvious. When there's a mismatch in your daily sales report and the money in your register, there will be a glaring mismatch. You can begin investing into the issue immediately and ask your managers and employees if someone's been acting strange lately. With these modern POS systems, you can also make it clear in the training process how accurately you are able to track sales. This can deter staff members from the idea that a successful skimming of the register is nearly impossible.
8) Unreported Mistakes
Hey, nobody's perfect. It's a fact that most if not all of your restaurant staff will make a mistake at some point. Your servers and cashiers will press the wrong button on the POS, meaning your guest gets fries when they specifically asked for onion rings. Your chef may put mayo on a sandwich out of habit despite the slip clearly saying "No Mayo," and when she realizes this, she has to throw the bread out and start all over. If you don't know it already, these situations are going to happen in your restaurant. The good thing, however, is that this is rarely intentional employee theft, which makes it easier to remedy.
Tired of losing restaurant profit from mistakes? Well, it's tough to totally prevent mistakes in your restaurant - but you can work to prevent problems or misunderstandings after mistakes occur.
Most of the time, staff won't record spillage or mistakes either because they're embarassed or don't want to make a big deal out of it. Reassure your staff that accidents do happen, and while they aren't the best case scenario, you'd rather hear about it from them so you can rectify inventory reports and make proper arrangements with your suppliers if more food is needed. If these mistakes are becomming too common, try putting new systems in place to prevent them.
Stopping Restaurant Employee Theft
No matter what you do to arm your business against theft, there will always be ways that your staff can steal from the restaurant. So it's also important to recognize the roots of your staff’s impulse to steal.
If you can create a fulfilling work environment where employees feel a sense of ownership in their work, you’ll decrease their desire to “stick it to the man.” They’ll be far less likely to behave recklessly if they are happy and feel fulfilled at work. Look closely at your payroll to ensure that wages match the duties expected.
Consider treating your staff to a gourmet meal or offering a desirable discount for their friends and family (with limits, of course). Understanding the ways your employees can steal from you while also working to make your staff feel valued creates a strong wall of defense.
And if you really want the best restaurant staff ever...
Download Toast's Restaurant Staffing and Hiring Guide and start hiring, managing, and leading the perfect restaurant team!