Theft is an issue for many small businesses, but nowhere is the problem worse than at restaurants. In addition to managing the natural shrinkage that comes from running a business, restaurants face the unique problem that nearly everything is easily consumable.
As big an issue as theft may be, there are ways to cut down on the impact employee theft has on your bottom line. Likewise, how you respond to theft when you catch an employee in the act has a big effect on that repeat-offender statistic. Here are some of the most prevalent types of employee theft, ways to prevent theft in your restaurants, and some steps to take if it happens again.
Food and inventory theft
Stealing food from restaurants is one of the most common ways employees are taking from your business. This kind of theft includes:
✅ Snacking on your supplies (outside their allotted shift meal)
✅ Giving (unauthorized) free meals to friends and family
✅ Taking food home
✅ Stealing supplies off the delivery truck
It all adds up, one peanut at a time. Look out for red flags, like if your alcohol inventory is consistently low. Many restaurants miss alcohol theft, but booze can be a big-ticket item if you’re running through your supplies quickly.
Investing in an inventory management tool can help combat food theft. Likewise, if you’re tracking your inventory management and identify the root of the problem, consider locking your freezer, offering a bigger pre-shift meal, or picking up some treats outside your inventory for your team to snack on.
Checkout theft
Though second to food theft, point-of-sale theft is more common than you may think. Checkout theft includes:
✅ Taking cash from the register
✅ Voiding ordered items
✅ Improperly ringing up items
✅ Dropping sales
For example, a bartender may be ringing up premium drinks and charging customers for well drinks (and pocketing the difference). A digital POS like SimbaPOS can help you identify where receipts do not match the sales, but other red flags include low morale or managers making a lot of voids at the end of a shift.
Checkout theft can be largely prevented with automated POS systems. A good way to keep everyone honest is to give each of your servers a checkout system on the go that sends data back into the central POS kiosk. SimbaPOS Tablets lets servers cash out tableside, letting the customer add a tip directly into the system. This lets you monitor cash in and cash out, keep an eye on a certain item, and even track your liquid stock so you don’t have to count bottles each day.
If your system is already running like a finely tuned machine, there are other signals to watch for surrounding checkout theft. Look for changes in employee behavior: defensiveness or being secretive around their tips and transactions are bad signs. Keep an eye on your customer reviews, as complaints about price increases can alert you to price inflation.
Accounting fraud
Accounting theft goes hand-in-hand with checkout theft. This more long-term and insidious form of theft is harder to spot. When left unchecked, it can have serious impact on your business. Forms of accounting fraud include:
✅ Manipulating voids
✅ Canceling checks
✅ Skimming cash
✅ Setting up fake accounts payable
SimbaPOS can help prevent accounting fraud by giving you a clear picture of your payments and receipts. SimbaPOS surfaces your business metrics to show you cash in and cash out, sales, employee management and scheduling, and inventory tracking – all in one dashboard. Discover trends and otherwise hidden insights to keep track of your managers.
Because this type of theft is so intentional, there’s more you can do as a business owner to prevent accounting fraud. If you’re generous, transparent, and fair with your people, you’ll attract like-minded employees who frown on bad actors. Evaluate the employee perks you already offer (are you being needlessly cheap?), as well as the tone you set in the workplace. If people feel empowered and are treated like grownups, they usually rise to the occasion.
Intellectual property theft
There’s a reason why grandma’s secret recipe was kept secret—it’s so no one else steals your menu items and runs you out of business! Of course, when you hire a chef, you want to let their talent shine, but you need to protect your intellectual property. Think about how to protect things like:
✅ Proprietary recipes
✅ Ingredients lists
✅ Cooking processes
✅ Branding
The restaurant industry is a lot smaller than you might think, and you might see the same staff, servers, and chefs working in different restaurants seasonally or part-time. It’s hard to protect your secret ingredients from becoming public knowledge. You may want to have your kitchen staff sign a nondisclosure agreement or keep your recipes under lock and key when not in use. Again, this is where being a great boss can really work to your advantage. Give your staff trust and respect, and they’ll usually repay you in kind.
Future theft prevention
There are plenty of tools you can use to identify the source of theft in your restaurant. But, the best way to prevent theft comes from you, the business owner. Employees need to realize that your response sends a strong message.
Determine the severity of the theft: obviously not all infractions are created equally. Time theft and fraud are two different things. Whatever disciplinary measures you take against the employee, do so discreetly. Being forceful, aggressive, or embarrassing a staff member will only lead to other workers sympathizing with the culprit. After you’ve dealt directly with the scenario, hold a staff meeting to explain what happened, what actions you take, and what you’re prepared to do if it ever happens again. Theft may not always be preventable, but dealing with it appropriately is up to you!
How can we help?
If you want to learn more about how SimbaPOS can help you accept payments, run your business and sell more, please contact your SimbaPOS Business Consultant. You can also follow us on Facebook and Instagram.