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The Green
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.
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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.
Stealing food from restaurants is one of the most common ways employees are taking from your business. This kind of theft includes:
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. Clover POS comes with a powerful inventory tracking system, and the wide selection of apps from the Clover App Market makes it easy to customize your system to your needs. For apps to stay on top of your inventory, try Thrive Inventory or Inventory Manager. To cut down on all those free lunches, try using Loyalzoo for more oversight on who is being rewarded for their loyalty.
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.
Though second to food theft, point-of-sale theft is more common than you may think. Checkout theft includes:
For example, a bartender may be ringing up premium drinks and charging customers for well drinks (and pocketing the difference). A digital POS like Clover 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. Clover Flex lets servers cash out tableside, letting the customer add a tip directly into the system. In addition, use Clover integrations like Ping Me If, or Cash Track to trigger alerts for certain events. 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 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:
Clover can help prevent accounting fraud by giving you a clear picture of your payments and receipts. Clover 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.
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:
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.
Time theft is especially common (and sometime inadvertent) with employees who clock-in and clock-out. When they’re on a shift, you expect them to be present and working—after all, that’s what you’re paying them for! But unscheduled breaks or wasted time both damages your restaurant’s efficiency (and profit) and causes you to lose money and time. Time theft includes:
There are some handy Clover apps that help employees check in and check out with ease: Time Clock by Homebase, 7Punches, and Shifts
Trying to cut down on unscheduled breaks? Start by setting forth a phone policy that lets your workers know when and where they can stop to check their phones. Ideally, phone time is outside of the busiest moments in your restaurant. Acknowledging that your staff needs time to check in on social media or text for a ride home is a good first step. Of course, you don’t want to spy on or micromanage your employees. That wouldn’t be fun for anyone! But you can install cameras in your restaurant to try to discover if your phone policy is working. Likewise, have a set break policy and let employees know the specifics. Breaks are crucial in this industry, so be generous but clear with your break policy.
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!
If you want to learn more about how Clover can help you accept payments, run your business and sell more, please contact your Clover Business Consultant. You can also follow us on Facebook and Instagram.
This information is intended solely for informational purposes and should not be interpreted as legal, financial, or tax advice. Readers are strongly advised to consult with their attorneys, financial advisors, or tax professionals to obtain guidance tailored to their specific circumstances.
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