If there’s one thing that can ruin a restaurant owner’s day, it’s employee theft. If you’re wondering how to prevent employee theft in your restaurant, here are the steps you can take to help ensure that your employees are on the up and up.
You’re a restaurant owner, and you’ve got a problem.
You’ve been losing money, and you’re not sure how to stop it. You know it’s happening—your employees are stealing from you. But how do you fix the situation?
Employee theft is a major problem for restaurants, with losses totaling millions of dollars each year. While stealing money from the cash register is worse than taking a few sachets of ketchup, both acts are something employees shouldn’t be doing. Luckily, modern tech and straightforward procedures may prevent dishonest workers from stealing money or food from your business.
Here are some ways to prevent employee theft in your restaurant:
Ways to Prevent Employee Theft in Restaurants
Establish and foster a culture of honesty among employees.
The first step toward preventing employee theft is to create an environment where it’s easier to be honest, and this begins with you.
If you want your employees to be honest, then be honest yourself, treat others fairly and with respect, be clear about how theft is dealt with (whether in your company policy or as part of the orientation), and cultivate an open relationship with employees so that they feel safe bringing up concerns or questions about policies at work.
An environment that promotes good behavior will inevitably identify individuals who do not share the values and aspirations of your restaurant.
Attitude is everything.
Emphasize the importance of a positive work environment. As a restaurant owner, you want your employees to be happy and motivated. If they feel like they’re part of something special, they’ll be more apt to treat customers with kindness, respect, and care.
Show employees that you are fair and just and that you care about their well-being. They are less likely to steal from a restaurant where they feel valued and respected. It’s important to give employees a well-deserved raise, especially because staff members are the backbone of your business.
Next, you need to make sure your employees feel like they are getting the recognition they deserve under your restaurant’s system at all times. You can do this through a regular review process, but it’s also important to let staff work on a variety of tasks every day and reward them when they do well.
And when it comes to your servers, it’s important to stress honesty and integrity in your service culture! [1]
Create an environment where employees feel comfortable reporting any illicit activity.
Make sure that the whistleblower can report the theft anonymously. This way, the employee won’t get fired for reporting it because they were being a tattletale. But if there is a problem, then they should be able to speak up without fear of getting fired or reprimanded by management.
Let everyone in your restaurant know why you’re firing someone. It’s important that they understand what happened and why you had to do it so that it doesn’t look like you’re just out to get someone who reported a theft (even if the thief was reported).
Protect your whistleblowers so that they won’t be targeted by other employees or customers who disagree with their decisions to report unethical activity.
Make sure that your employees are logging comps.
This tip was contributed by Eric Ridenour, a former server and manager for hotel resort FNB departments. Eric worked in restaurants for nearly 10 years, starting out as a dishwasher and working his way up to a server and bartender before becoming banquet manager.
The main way employees steal, in my opinion, is by giving away things like drinks to dessert to friends. This happens constantly. And the problem isn’t so much the giving things away as it is an inventory screwup. If 10 people give away a piece of cheesecake, we can’t order more because we think there is plenty.
I told staff that they are allowed to comp small things for friends, but they have to log it. I explained you will not get in trouble unless it is excessive, and even then you would be talked to first. I explained they would never get in trouble for comping things in the system within reason, but comping without putting it on the receipt is a fireable offense. This actually made people feel bad and be more proactive with comps. Our inventory became more accurate and comps were reduced by about 30-40%.
A funny side story, one time we had a dishwasher stealing entire racks of dishes. By the hundreds at once. He was caught when I found our same dishes for sale on e-bay for local pickup. It was totally random, as I was only trying to find ways of replacing the dishes at a lower cost because I couldn’t figure out what was happening to them. I found out when I showed up to buy them and saw it was our dishes and our dishwasher was selling them. I called the police on my boss’s instruction, he confessed and was unfortunately arrested. I just wanted him fired, but it was not my call to make. [2]
Keep tabs on employee access.
When you’re working in a busy restaurant, it can be hard to keep track of who is doing what and when. You might think that your employees are just taking a break or chatting with each other—but if you take a closer look, you might find that they’re stealing from you!
It’s pretty simple: If someone has access to the cash register, he or she may be tempted to steal from you. Monitor those areas of your restaurant carefully and make sure that only authorized employees have access to them.
Employees that have keys or passcodes should constantly be on your radar. In the event of an incident, your employees should be held accountable.
There should be no more than one security measure that each employee is responsible for. For example, it’s a good idea to split the responsibilities of documenting and processing monetary transactions.
Keep your cash transactions to a minimum.
Limit cash transactions by making sure all sales are processed electronically. This will help reduce the chances that an employee might pocket some cash from a transaction and then disappear with it.
When you limit the amount of cash your restaurant receives, you lower the risk of employee theft. Cash is more difficult for employees to conceal and steal than checks or credit cards, so limiting the amount of cash you accept will help keep your business safer from internal theft.
Have clear policies in place.
Make sure you have policies in place for dealing with theft cases when they arise. This might include having clear documentation of what happened (including video footage), having witnesses present during any conversations between management and employees who have been accused of theft, and following up with investigations into why these thefts occurred in the first place (and making sure others don’t follow suit).
Recognize and use your numbers.
Often, restaurant owners don’t look at their financial statements as closely as they should because they’re busy running around from table to table and kitchen to kitchen.
When an employee steals from a restaurant, it can be easy to just assume that it was an accident or overlook the signs. But if you’re looking at your financial statements regularly, it’s much less likely that an employee will be able to get away with stealing from your company without you noticing.
Not only will this help you get a sense of where your restaurant is financially, it can also help you recognize any potential red flags that may indicate employee theft. For example, if you notice that your inventory is consistently low, but sales are steady, there’s a good chance someone is eating or drinking more than they should be.
If you use technology and generate financial reports, you’ll be better able to spot anomalies. Now, it’s possible that these exclusions aren’t usually the result of stealing. In contrast, if you’ve looked into all other probable explanations for discrepancies and are still observing variations in your profit and loss, it’s conceivable that theft is the source of the problem.
Sneaky thieves don’t take money upfront but rather steal money from the business’ budget; therefore, it’s critical for you to maintain track of your reports on a near-daily basis if you want to stay on top of things. You should be developing transaction conformity and cash flow management analyses to uncover any discrepancies in your data. [3]
Invest in video surveillance systems.
In order to catch your employees stealing from you, you need to be able to watch them at all times. The more cameras you have in place, the more likely you’ll be able to catch someone red-handed. They’re especially helpful if you’ve got a lot of employees with access to cash registers or food storage areas who might be tempted to steal from you.
Install hidden video cameras in strategic places like the food pantry, storage, cash register, and bar areas. Bars are notorious for alcohol and cash theft! So make sure there are cameras at all exits and entrances, especially your back door!
Any employee caught shoplifting money from the cash registers or sneaking away with goods can be followed and subjected to further investigation based on actual proof thanks to the restaurant’s surveillance cameras. Security cameras also *are useful for informing restaurant employees that they are continuously being watched.
Cameras are only effective when no one but you knows where they are recording. Moving cameras around to capture new and different weak points in your armor is one way to catch employee theft red-handed.
When looking for a company to install your CCTV system, make sure that you look at all of their offerings. There are many companies that offer multiple products and services, so it is important to know what they have to offer before deciding on one company over another.
Let your employees know that cameras are an important part of protecting the restaurant and them from fraud (both from outside and inside). They can help settle disputes between employees and customers over shortages or angry customers.
Emphasize anonymity.
Some individuals value ethics and integrity, take pride in their work, and are concerned about your company. When you’re not nearby, these staffs are more likely to notice incidents of theft than you are. Sadly, they are likely to be reluctant to disclose these to you for fear of retaliation on their part.
Establish regulations that allow staff to anonymously report incidences of theft in your restaurant or café if you want to make a difference. [4]
Take stock of your inventory.
Inventory is a key measurement of success for a restaurant. It can also be an indicator of employee theft. The frequency of inventory counts should match the speed that menu items are used, so as not to slow down service.
For example, if food is ordered and served quickly (e.g., fast food), then inventory should be counted more often than in a slower-paced restaurant where people spend more time eating their meals and ordering desserts.
In addition to counting your inventory regularly and making sure you have enough stock on hand at all times, make sure that staff members understand what they’re doing when they take an inventory count: they aren’t just checking off numbers—they need to know how much each item costs and how much it weighs as well as its expiration date or sell-by date if applicable.
Actively carry out stock checks, and you can even ask employees to provide consent for you to check their bags after each shift to ensure that no theft has taken place.
Install interactive smart tables in your restaurant.
The best way to prevent stealing is to install smart tables that enable you to track everything from your orders to payments digitally.
This is a great long-term solution that will not only protect you from employee theft but also help you save money and increase efficiency. Smart tables allow you to view the activity that took place at each table, including when food was ordered, how much it cost, who ordered it, and even how long they stayed at that table. This information can then be used to determine if an employee has been stealing food for themselves or for someone else
For example, Interactive Restaurant Technology (IRT) enables restaurant owners to install customizable tables in restaurants and cafes, that will let customers answer most questions, place orders, provide feedback, communicate to chefs and managers, and much, much more. [5]
Conduct background checks on all employees.
This should be a no-brainer—you wouldn’t hire someone without knowing their criminal history and education level, right? Well, maybe you do, but that’s not advisable. You need to make sure that your employees are qualified and trustworthy before they step foot into your restaurant.
Background checks can help you determine if the employee has been convicted of theft, fraud, or other crimes. If an employee has a criminal record, you should consider not hiring them, or at least not giving them access to cash or credit card information.
- Use a criminal background check if there are specific things that could indicate that an employee has had problems with the law in the past.
- Use an employment history check if you want to know where they’ve worked in the past, or what their employment status is now.
- A credit report will show whether employees have any outstanding debts or financial issues associated with them that may make them more likely to steal from your business than most people would be.
These can be done through companies like HireRight, Checkr, etc. They have developed software that allows you to run background checks on prospective employees and even provide follow-up monitoring for current employees.
Restrict access to sensitive areas such as the back office.
This prevents employees from going through your financial records, stealing money from the safe, and so on.
All employees should have a designated place to work, and they should never be allowed to enter areas that are off-limits. The back office, for example, should only be accessible by managers and owners.
If you have a restaurant with multiple locations, each location should have its own back-office space and not share it with other locations. Employees who work in these spaces should be required to keep their belongings with them when going in and out of these areas so they don’t accidentally leave something behind.
You can also use technology to make sure that only employees with proper clearance get access to sensitive areas. For example, you could use biometric fingerprint scanners at entrances or RFID badges that only open doors when employees are wearing them on their person.
Ask employees to show proof of identification before they can clock in or out.
One of the most common ways employees steal from their employers is by clocking out for a break or lunch and then staying on the restaurant premises. This can be prevented by requiring employees to show proof of identification before being allowed to clock in or out.
This step also prevents employees from faking their own clocking-in times, which is common when an employee is stealing from the company.
In addition, requiring employees to show ID can help protect your restaurant from liability if an employee claims that he or she was injured at work because it will be clear who was working at what times.
Draft an agreement.
Employee theft prevention at restaurants starts with having a strong, vocalized policy against all obvious ways in which your particular eatery is and has been vulnerable to theft in the past.
Have your attorney draft a one-page agreement whereby all staff pledge to not cheat the business or steal from customers. Having this agreement in place will show employees that you are serious about preventing theft and that they have no excuse if caught stealing.
Here’s a sample of what this document might look like:
“In consideration of my employment at ___(restaurant), I agree not to participate in any fraudulent activity which may result in financial harm for ___(restaurant). This includes but is not limited to: skimming tips, pocketing money from cash registers, stealing food/drinks/supplies from the restaurant, bribing/colluding with other employees on behalf of customers or vice versa. I acknowledge that any violation will result in immediate dismissal and possible prosecution by law enforcement agencies including local police departments and district attorneys’ offices.”
Rewarding employees who report theft –– whilst firing those who fail to protect your restaurant against theft –– is a powerful self-policing culture to develop. [6]
Have consistent policies.
To keep employees on a level playing field, make sure your policies are as consistent as possible.
For example, if you’re using a point-of-sale system to track hours worked by each employee, be sure all employees are expected to clock in and out at the same place in the restaurant. If you’re using a computerized inventory system that requires employees to scan their ID badges before entering the kitchen area or bar area, this rule should apply consistently across all areas of the restaurant.
It’s also helpful to create written policies and distribute them companywide so that everyone knows what’s expected of them and what consequences they might face if they don’t follow those expectations. This ensures that no one employee can get away with doing something they aren’t supposed to do simply because no one else knew it was against policy!
Be specific with responsibilities.
Define what you want them to be responsible for. Every employee should know their job responsibilities, and every manager should make sure they understand them. When an employee feels that a task is not their responsibility, it could lead to theft or other misconduct.
Make sure they understand your expectations of them are high. It is important that your employees know that you expect the highest level of integrity from them; otherwise, there will be little incentive for them to act responsibly if they think they can get away with anything without serious consequences.
Make sure they understand the consequences of not being responsible. If an employee steals from a restaurant while working there or misappropriates funds in any way, it’s vital that the manager makes clear what actions he or she plans on taking as well as why he or she has chosen those options (e.g., because certain actions have been taken before).
Use advanced cash register software technology.
Advanced cash register software technology today offers impressive countermeasures to modern transactional thefts. If your restaurant is behind the times and still operating on mostly paper tickets and cash, it may be time to upgrade your restaurant’s cash register strategy to prevent fiscal theft and streamline transactions. [6]
Offer shift meals to your employees.
The challenge is that most theft is either a calculated partnership or tag team situation or scam or simply solo employee desperation to pay rent or an overdue electric bill, especially given inflation and high-priced housing.
Offering employees a shift meal or trading a few of your menu items with another restaurant occasionally to feed your crew something new is a great way to foster loyalty. People tend to steal far less from a hand that feeds them.
Make it a policy that each employee on shift may order a meal up to $10 or $15 any time from an hour before the start of their shift to an hour after the end of their shift. Have them sign the receipt and note that it is an employee meal. Any day they don’t get an employee meal it is waived so if they don’t get it they miss out on it. [6][7]
Managers and administrators must set up and use the correct systems.
This tip was suggested by Chris Bidmead, a 15-year veteran in the hospitality industry and founder of Bar Methods, an education and consulting program focused specifically on bars and restaurants.
Theft is a tough one within the restaurant industry because there are so many different forms and opportunities. The obvious one is cash theft but for some theft is also giving away drinks or shots to guests.
With so many different variations how could you possibly be able to look out for them all?
Cameras are not the answer. Relying on recording devices to catch theft is like looking for a needle in a haystack. There are many more proactive ways to identify theft, and have systems in place that keep employees accountable.
It all stems from admin and management properly setting up and using the correct systems. Inventory management systems help identify when losses occur and the right ones can go as far as to identify the product that went missing. Communication systems for staff to make management aware of issues, breakage, or other issues. Proper end-of-day reporting.
It’s about the sum total of the systems, not any one element. Then once you’ve noticed the issue you can figure out a timeframe, the potential employees responsible, and then use the cameras to verify. [8]
Let your employees know the rules with a handbook.
The importance of an employee handbook cannot be overstated. It is the first place to turn when trying to figure out what’s wrong with a situation that doesn’t seem right, or how to fix it if something has happened.
Your handbook should address all major areas of your business, including hiring practices, dress code, behavior policy, dealing with theft, etc. It should also cover specific topics such as how employees are expected to handle cash and credit card transactions; how they can change their hours; when they can take breaks during shifts; whether they get paid overtime for working shifts longer than 40 hours per week; what happens if their shift ends early (or late); and so on.
Ensure that all your employees receive ethics training.
Ethical training is one of the most effective ways to prevent employee theft in restaurants. You should ensure that your employees know what is expected of them and that they are expected to act ethically.
Employees should be trained in ethical decision-making, and also taught how to report any unethical behavior they see or hear about. Use videos with actors playing different roles, such as an employee who steals from his employer.
If someone isn’t acting right or seems like they’re trying too hard to make sales happen, don’t be afraid to let them go—you never know how far they might go until it’s too late!
Train your staff on how to spot theft.
Employees can be the best at what they do, but if they don’t know how to spot employee theft, you could be losing out on a lot of money. Teach your employees how to identify theft. Let them know what common signs there are for both internal and external theft, so that they can be more aware at all times.
Make sure that everyone understands what they should do if they suspect an employee of stealing. This way everyone will feel comfortable calling out someone who might be stealing from the restaurant without worrying about hurting their feelings or making them feel uncomfortable in any way.
Pay attention to employee availability.
Pay attention to when employees are requesting time off, taking time off, and calling in sick. Consider how often they are taking vacations and if the requests are reasonable given their jobs and responsibilities.
When you do see an employee who appears to be leaving early on a regular basis, or who is frequently late for work, it’s worth investigating further as he or she may be stealing from your restaurant.
Bring up the issue.
This tip comes from lifelong grilling fanatic James “Jimmy” Watts, CEO of Own The Grill.
The most significant thing to do is to bring up the issue, and state that it’s not acceptable and that there will be warnings given to those caught doing this.
If this is something you’re experiencing, from experience I know you need to address this as soon as possible. If it’s not brought up, then the employee may continue to steal and actively encourage others to do this too. I would hold a meeting to state that you are aware of the issue, and then I would be stricter when it comes to your stock. [9]
Conclusion
We hope you found these tips helpful, and that they will help you to prevent employee theft in your restaurant. If you want to learn more about preventing employee theft or other business management issues, please feel free to check out our blog for additional resources.
Preventing employee theft goes all the way back to how well you explain, coach against, and hire new employees based on everyone’s shared commitment to not tolerate theft in your workplace.
As always, if you have any questions about the information provided here or just want to chat about any security-related issues, please feel free to contact us at any time.
Until next time, stay safe out there and remember: if you see something fishy, say something!
17 Ways To Prevent Theft In Retail Store