Would you care if your staff stole a meal from you?
How about $5 from the pool tip? What if it was a hundred dollars?
Employee theft usually starts really small and escalates quickly.
So if you don’t pay attention and stop it right from the beginning, then it’s going to cost you a lot of money.
If you want to stop people from stealing from you, you need to know when and how they’re stealing from you.
Detecting Employee Theft
1.) Looking At Your P&L
The first step is to study your profit and loss statement (P&L).
It is important and essential for your success as a business owner. You’ve got to have proper bookkeeping practice and have it updated every month.
If you’re operating your business without understanding how you’re doing on a monthly basis, you’re basically working in the blind. You don’t know which levers to pull to have more profit at the end of the year.
A very simple number to keep an eye on is the food costs in relation to your revenue.
As a general rule of thumb, food cost should not account for more than 30%. If your restaurant makes $100,000, then $30,000 should be accounted for your food cost.
Food cost includes ingredients, to spoilage, to anything that is in direct relationship into how the food is produced.
If every month your food cost percentage is floating around 30%, and all of a sudden you hire a new manager and that food percentage increases to 40%, then you know something is wrong.
That doesn’t entirely mean that they’re stealing from you.
Maybe they’ve been comping a lot more to the customers to create a better customer experience, or they’re not managing food spoilage properly.
But this gives us the opportunity to dig deeper and investigate further what is going on.
This is the easiest way for you to detect anything that is going wrong.
2.) Look At Your Cash Register
If your P&Ls are not up to date, you could look at it is your cash register.
There are many patterns where you can observe from your staff’s cash register. Some people might be spot on, others might have a few dollars up, or a few dollars lower.
Keep an eye out on consistent patterns that are overage: that’s when they’re always $5 or $10 over when balancing their cash register.
It is a sign that something fishy is going on.
What most likely is happening: your staff is probably comping meals, voiding checks and then pocketing the cash. They may be tallying this in their head and throughout the night they lose count. They much rather be over than under.
Which is the reason why if there is consistent overage with your staff’s cash count and cash register, then something fishy is definitely going on.
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Preventing Employee Theft
If you believe something fishy actually going on and that people are stealing from you, we’re going to be looking at ways to prevent this from happening.
1.) Have Each Order Require A Ticket
Make sure the kitchen does not produce any food or the bar does not give out any drinks until a ticket is issued. A ticket is needed before any products are made.
A lot of staff, take advantage of the ambiguity from the front of house to the back of house. And through this ambiguity, they’re able to take advantage and steal from you.
Make sure that your staff understands that there are systems in place. If there’s no ticket, nothing is being made.
This would save you thousands of dollars.
2.) Place Sole Responsibility
Make sure that whoever is touching the cash is responsible for that cash register only.
Because if there are multiple people touching the cash and the cash register, there’s ambiguity. They can blame it on other people. It becomes harder to isolate the cause.
So the best way to prevent this from happening is to make sure that each person is in charge of their own cash.
It also decreases the chance of people making dumb decisions.
3.) Random Spot Checks
If a staff is stealing from you, they are usually keeping a running tally throughout the night.
And then afterward, they’re going to pocket the cash.
So if in the middle of the shift, you do a random spot check with them, with their cash register, with their pockets and everything, it’s going to throw them completely off.
And they know for a fact that it’s much more riskier, and that you have these policies in place.
4.) Document All Discrepancies
You want to document every overage and underage and make the staff sign it.
This acts as a very good deterrent for your staff because it makes the whole process very legitimate.
It helps them understand that you are paying attention and that you do care about any discrepancies.
5.) Install Surveillance
A simple fix: install cameras in your restaurant.
Most businesses already have cameras situated around the exterior and interior to protect themselves from criminal acts conducted by strangers.
But this also acts as a great deterrent for internal staff as well.
6.) Audit Comps
Audit the comp and void function in your POS system.
Pull up a report every single night and actually do spot checks of how many items were being comped and how many items are being voided.
This is a common way people use to steal from you, when they comp items and then they pocket the cash. It is super easy for people to take advantage of.
Printing out these reports itself acts as a deterrence for people and your staff to know that you pay attention to these things.
7.) Zero Tolerance Policy
In the beginning of each employment, I get all my staff to sign this policy, mainly because it acts as a great deterrent and lets them understand the gravity of the situation.
If for whatever reason they do decide to steal from us, we will terminate them immediately and we will be pressing criminal charges.
They understand the gravity of the situation, and they will not dare to steal from you when you have these policies in place.
Not Theft, But Common Errors
1.) Servers Miscounting
A scenario that would also throw the numbers off is if your server is poor at counting and they’re always giving out either extra bills or they’re receiving extra bills.
2.) POS Is Complicated
If your POS system is really complicated, it could cause a lot of problems. For instance, when there’s a rush and your staff is trying to figure out how to balance the math on the spot, things could get messy.
They might be voiding different meals just to make sure that everything adds up. And at the end of the shift, they forget what was happening because they were in such a rush.
It could be when people are giving them, let’s say for example $50 and they don’t want the change back. And when the server just wants $10 instead of $10.52 cents in tips, they might just take the $10 and leave the $52 in the pot. And at the end of the day, and it doesn’t balance out.
This is due to pure laziness and just really poor practices. But at the end of the day, they might not be stealing from you.
What Does This All Mean?
If you are suspecting people from stealing from you, the first step is to have a meeting with the suspect and ask them to explain.
Let them come clean.
Never accuse them of stealing from you without any solid proof. Ask them to explain what happened and present your facts.
Don’t detain and restrain them if you have suspected them of stealing. It’s against the law to do that. You don’t want to defame them because they can press charges on you. Nor should you publicize they’re stealing from you. If you do not have sufficient proof, they can also press charges for slander.
At the end of the day, is it worth pursuing a lawsuit if they’re only stealing $50 or $100 from you?
Is it worth your time? Is it worth your effort?
Is it worth the team morale to go down because of one individual’s actions?
You rather want to have the preventive measures and policies in place.
As a professional company, your staff would not hate you for that, if all these are given to them upfront.
They will actually learn to appreciate and respect that, and you’re going to be able to build a great team.
So if you communicate with your team, they will be empathetic in your effort to stop theft and even be willing to be your eyes and ears – which is helpful when you are an unlucky victim of employee theft.