Operations & Management Series (Part Three): Preventing Theft in Your Bar or Restaurant
According to the National Restaurant Association, employee theft is responsible for 75 percent of inventory shortages, equivalent to approximately 4 percent of total restaurant sales.
In the hospitality business, theft can be especially hard to track because it often takes place in subtle ways, for instance, a bartender going too generous on alcohol pours in exchange for better tips or the server who sneaks an extra to-go order after a long shift.
Bar and restaurant businesses are especially prone to theft for a gamut of reasons, such as high employee turnover, intoxicated employees who use poor judgment, a server who feels underpaid/under-tipped, and everything in between. But the biggest reason why they steal is simple. They get away with it!
So aside from being everywhere, every time (which is impossible, of course), what theft prevention steps can bar and restaurant owners take?
Implement a surveillance system to monitor what is happening in your bar or restaurant at all times.
Gina Champion-Cain, owner of The Patio on Lamont Street, a casual elegant dining establishment in Pacific Beach, San Diego, says, “To keep a close tab on what our employees are doing we have a 24/7 surveillance system in place that I personally, along with my management team are constantly monitoring.”
Develop an employee manual that every employee must sign and be held accountable before beginning their employment.
The employee manual should clearly spell out all company policies so that there are no gray areas when it comes to stealing on the job, such as comping certain guests, giving away extra food and drinks to friends, or liberally eating food from the kitchen.
Empower your employees to be part of change management.
Employees who are empowered to participate in the decision-making process and overall business strategy will be less likely to steal because they feel appreciated and vital to the success of the operation.
Implement solid inventory management procedures.
Integrated POS systems and professional inventory management services are essential investments that every bar and restaurant owner needs to make. Champion-Cain says that she has implemented a sophisticated POS and business intelligence SaaS platform called Ctuit to manage inventory and overall financial performance of the restaurant. In addition, she says, “a professional inventory company called BevIntel makes weekly visits to conduct alcohol supply inventories of the bar, allowing us to keep accurate supply counts and better recognize potential red flags.”
Trust the people that you have hired to manage your day-to-day operations.
The bar and restaurant manager that you hire is one of the most important HR decisions you’ll ever make because when you aren’t there, they are in charge. As such, you need to be able to trust that your management team has the integrity and skills to perform. For advice on how to hire a restaurant manager, this Houston Chronicle article by Lisa Mooney offers good tips.
Theft is a challenging issue and unfortunately very common in the hospitality industry. The good news, though, is that there are basic steps that you can take to protect your business.