Employee theft and customer theft in restaurants can become a massive problem if left unchecked. From colluding bartenders and cocktail servers to theft tactics as complex as Ponzi schemes, restaurant theft can occur in a million ways.
False orders, credit card fraud, and comping are some of the most common issues to fight against when you’re building your restaurant theft prevention strategy.
Here are some of the most effective ways to prevent restaurant theft.
Employee Theft Prevention
It’s a sad truth: 75% to 85% of all restaurant theft is committed by employees, and theft can account for up to 4% of restaurant sales. Shrinkage – liquor lost due to spill or waste – can account for about 25% of alcohol sales.
Whether by accident, dissatisfaction, desperation, or just plain malicious behavior, employee theft is a real concern. Use the following strategies to fight employee theft:
- Inventory management: Diligent and exact inventory management is your first line of defense against employee theft. Never estimate inventory numbers, and establish pour control caps, weighted bar rails, and manual itemized bi-weekly fridge counts to keep a closer eye on your supply.
- Comping policy: Comping – giving out complimentary items – is just part of the restaurant business. Allocating a daily or weekly budget for complimentary items can keep you on track with your sales goals.
- 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. A POS tracks all transactions and requires the server to get permission from a manager before altering a bill. Set permissions for staff in your POS so that only trusted managers can comp items. This practice will help eliminate the abuse of voiding and deleting items.
Dine-and-Dash Prevention for Restaurants
While the image of a server clinging to a dine-and-dasher’s car might seem like the stuff of comic books, the heroics of dealing with dining-and-dashing should actually be left to restaurant policy.
First, you should know that, in many places, it’s illegal to make an employee pay for the dine-and-dash out of their wages – and it’s also just a bad idea to make them pay for the disparity out of their tips. The dine-and-dash is a business risk you take as a restaurant. To place that risk on the shoulders of your servers would impact restaurant morale, and not in a good way.
But you can mitigate risk in other ways. Ways to dissuade dine-and-dash theft include:
- Video surveillance: Entrances/exits, parking areas, and garbage areas should all be covered by video surveillance if you have the budget.
- A host at the front door: Hosts constantly scan the restaurant to gauge table status to manage their wait list and reservations, so they’ll be alerted to fishy behavior.
- The use of a single entrance: One way in, one way out – including patio access – can make it more difficult for dine-and-dashers to sneak out.
- Request a credit card: Make sure your bar staff are requesting a credit card when guests run a tab at the bar.
- “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? A sign and a dummy camera can do wonders for deterring theft.
Credit Card Fraud Prevention for Restaurants
The swipe and sign credit model is inherently flawed. Prior to October 1, 2015, if a fraudulent purchase occurred at your business, liability fell on the shoulders of the bank to pay the fraudulent bill.
But all that has changed with new EMV liability shift. Named after 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. So if your restaurant doesn’t have chip and pin technology, you’ll need to 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, 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 liability shift and have been operating successfully in EMV-compliant countries like Australia and Canada for years.
Restaurant theft prevention and a solid restaurant loss prevention strategy starts with establishing a culture that encourages loyalty among staff and policies that protect financial interests. Given the large impact theft can have on your sales and profit, make sure to do an audit of your operations to make sure your defenses are up.