From time to time, we like to take a look back. One the top reads at On Point is a post that goes back to 2010 about detecting employee theft. Studies show that employee theft is a contributing factor in a third of restaurant closures. So while admitting it could happen to you and discovering it can be disheartening, it’s necessary.
Can you afford to absorb employee theft in your restaurant? You’re probably shaking your head right now, but what may surprise you is how costly employee theft can be—and how easily it can be missed.
The National Restaurant Association estimates that internal employee theft is responsible for 75% of inventory shortages (about 4% of total restaurant sales) and accounts for the highest loss to employers. Consider the real possibility that three quarters of your employees have stolen from your restaurant at least once, and half steal repeatedly. Why? Because they rarely get caught!
Most employees don’t steal out of need, but because an opportunity presents itself. If the chances of getting caught are low, stealing can become an accepted part of the restaurant culture—to the point where often employees don’t even see it as stealing anymore. And that’s dangerous.
Here are a few indicators that you have an employee stealing from you—and how you can dig deeper for more evidence:
- Your cash stations are consistently over or under. This one seems like a given, but you would be surprised at how clever employees can get with their excuses. Review your POS reports daily. A pattern of shortages may mean an employee is stealing directly from the drawer. Keep in mind that a cash overage could be an oversight by a thief: money put into the till without ringing in a sale and then subsequently forgotten about or miscalculated when skimming.
- Your food costs have gone up. If your costs suddenly go up, your POS reporting tools can provide detailed records that may point to a specific event such as a new hire or an employee arriving on shift. Restaurant employees will also frequently provide free food or drinks with the expectations of a bigger tip, in turn significantly affecting your bottom line. Do random till and tip checks to keep them honest, and raise a mental red flag if an employee’s tips are regularly over average.
- Your ‘regulars’ complain of price inconsistencies. An employee who’s stealing may not differentiate between a regular customer and a new one. When a customer starts complaining that you’re raising your prices, or you aren’t consistent with them, it’s possible that an employee is overcharging and pocketing the extra. Keep a mental note of the patterns, and review your sales and inventory reports to spot variances.
- An employee is acting strangely at work. Thieves tend to become defensive, rather than apologetic. Trust your instincts. If something doesn’t feel right, monitor the employee closely. Also consider employees who seem eager for more hours and overtime. Sometimes employees who are stealing will try to fly under the radar by being extra flexible.
- Employees and customers are telling you someone is stealing. This one seems too easy, doesn’t it? A friend, staff member, or regular customer tries to caution you that one of your employees is being less than honest, but you’ve missed the signs because you want to trust them. Jumping to conclusions isn’t the answer, but don’t ignore the warnings. Use these advisories to watch and learn.
Recognizing the signs is the first step to stopping theft and building a culture of trust with your employees. Although incidents may still occur, learning to recognize potential problems will help you stamp out theft early. It’s a problem that’s costing you and your fellow restaurant owners billions of dollars annually—so track your sales, work closely with your employees, and verify everything.
Posted by Tricia Hoy| Author's website