We all know that theft happens in our industry; it happens in any industry, really. And unfortunately there are stats to back up the prevalence of restaurant theft:
- 75% of employees steal from the workplace at least once, and half will steal repeatedly (U.S. Chamber of Commerce)
- Internal employee theft is responsible for 75% of inventory shortages (National Restaurant Association)
- QSRs lose up to 7% of sales to employee theft (National Restaurant Association)
But how do we limit our exposure and what are the signs that someone may be taking more than what they have earned?
The key is knowing your business and watching it closely. Theft is usually detected in the numbers before you actually catch someone in the act:
- Are your food costs going up despite the fact you are purchasing wisely?
- Are your cashier drawers either over or under consistently?
- Do you have an inordinate amount of cancel and re-ring or “promo” rings?
- Are the tip percentages of your wait staff within reason?
- Do you have inventory swings or are perishables going “bad” quicker than you expected?
All these are signs that something is not right in the operation and unfortunately, theft may be a culprit. The two sides of restaurant theft are employee theft and vendor theft. Both are very important to recognize, but in this article, we’ll focus on the employee theft.
With employees, there are many FACES of theft: Food, Alcohol, Cash, Equipment and Supplies:
F – FOOD
Food cost is one of the primary costs in our business and one of the “easiest” to rise due to theft; intentional and unintentional. Be mindful of the ways you might be losing food and be sure you have processes in place to measure your staff’s productivity. A few operational methods that help decrease the likelihood of theft are: portion control and monitoring, inventory of supplies and prepared foods and food waste.
One of the toughest areas to control and prevent restaurant theft is in the personal practices of your personnel. It is important to establish standard operating practices that help control your food costs and more importantly, enforce the standard. Some additional thoughts that may help control your food costs and theft are: Offer a designated area for employees to take a break and eat, provide employee meals or discounts, offer monthly ‘deals’ for your employees where you negotiate with vendors for pricing, have shift tastings to allow personnel to taste samples of the food, include contests for proper production and, most importantly, be a great role model. Many owners/operators will help themselves, be sure to follow any process you have in place!
A – ALCOHOL
Alcohol is a tempting item for theft. Be in control of your alcohol from inventory to portion control, it is the best way to prevent theft. Your alcohol should be tracked from order, delivery, dispensing and stocking. Be certain to have a definitive process for replacing bottles at the bar, keep the inventory under lock and key and only allow your supervisors access, utilize shift change over inventory methods and most importantly watch your pours!
C – CASH
Cash includes more than just the green stuff – it also includes debit and credit. Be certain to utilize the functionality of your Point of Sales system, most systems have detailed reports and suggested processes to help decrease cash loss. Some quick things to be on the look-out for include: over/under, voids, opens, promo for guest, excessive “on the fly” requests for food and sales/tip ratios. In today’s digital world the other key is to be certain your systems are up to date on PCI compliance to protect you and your customer from data theft. Be certain you have a tight process for credit card transactions including manager approval for reprints.
E – EQUIPMENT
Although we don’t always think of small wares as equipment,when it comes to employee theft, this is at the center. As with any other asset the key to prevention is inventory and process. Be certain you have monthly small ware inventory and have processes for breaking out new inventory. And when an employee requests a “to-go” meal for themselves, be certain it is in your disposable ware.
S – SUPPLIES
Supplies are the items we tend to forget about, and for an employee it is usually an innocent “take”, from borrowing tape to paper supplies; they are easy items to not even think about and just toss in a bag. It’s important to monitor what you use and keep larger value items inventoried and under lock and key.
Although the statistics are daunting, we need to remember the majority of your employees are honest, hardworking people who have no intention of stealing and who just want to enjoy working at your establishment. Don’t make the rules so tough or the measurement too harsh that you will chase them away; after all the number one challenge of running a restaurant is still labor! Be vigilant, be present and watch the numbers.