Employee theft in restaurants is a significant issue that can lead to large financial losses. According to the United States Chamber of Commerce, employee theft is responsible for between $3 and $6 billion in revenue loss annually, making it a pressing concern for restaurant owners.
Here we will explore strategies and solutions to prevent internal theft in restaurants and create a work environment that deters it.
Understanding Employee Theft Motivation
Employee theft often arises from a combination of motivation, opportunity, and rationalization. Factors such as low wages, perceived unfair treatment, or financial issues can motivate employees to steal. To prevent employee theft effectively, restaurant owners must address these underlying issues.
1. Pay Fair Wages and Provide Benefits
Paying employees a fair wage and providing them with benefits can greatly decrease the desire to steal. When people are going through tough financial times, they may resort to theft out of desperation. By ensuring your employees are fairly compensated and improving their overall well-being, you can establish a positive workplace environment that discourages theft.
2. Create an Open Culture of Accountability
Creating a culture where everyone takes responsibility and supports each other is critical. Make sure to keep the lines of communication open between you and your team, and offer resources to help with their physical, financial, and emotional needs. This will help to build trust and make employee theft in restaurants less likely.
3. Provide Free Staff Meals
Food insecurity is prevalent among restaurant workers. Offering free, nutritious staff meals can not only show your employees that you care but also enhance team morale, reducing the temptation to steal food from inventory.
4. Address Issues Head-On
Recognize that working in a restaurant can be stressful, leading to tensions among employees. When you notice resentment or anger in a staff member, address the issue promptly through open and respectful communication. Understanding and resolving conflicts can prevent theft.
According to the National Restaurant Association:
Identifying Opportunities for Employee Theft in Restaurants
While creating a positive work environment is crucial, it’s also essential to be aware of potential opportunities for theft within your restaurant. Here are some common scenarios and how to prevent internal theft in your restaurant:
1. Short Ringing / Short Changing
To avoid shortchanging, use a system where employees count the cash at the end of their shift without knowing the exact amount they should have. This way, it’s harder for them to steal money and cover it up.
2. Giving Away Too Many Complimentary Items
Create and make sure everyone follows a policy for giving away free items, so you can keep track of them. This will stop employees from giving away too much product.
3. Voids or Canceling Orders After Closeout
Keep a close eye on voids or canceled orders, especially those made after closing. Keep a record of which manager gives the approval. This helps ensure fairness and prevents any potential issues.
4. Reprinting Receipts
Monitor how often receipts are reprinted, especially if it’s happening more frequently with certain employees. If you notice a lot of reprints, approach the situation with understanding and without jumping to conclusions or placing blame.
5. Preventing Cash Register Theft in Restaurants
Utilize managed video security software that can easily track unusual or suspicious transactions. This software allows you to conveniently view the video footage that accompanies the transaction whenever such situations arise. This helps keep an eye on any employee theft in restaurants.
Handling Suspected Employee Theft in Restaurants
When you suspect that someone on your team might be stealing, it’s important to first explore other possible explanations before accusing them. If it turns out that theft did occur, handle the situation carefully:
- Talk to your entire staff about the missing item or money and give them a chance to return it without facing any punishment.
- If the item or money is returned, have a conversation with the employee to understand why they did it and offer support if needed.
- If theft continues despite clear evidence, you might have to consider letting the employee go. If necessary, consult with a lawyer to explore legal actions.
Common Types of Internal Theft in Restaurants
Employee theft in restaurants takes various forms, including food and inventory theft, checkout theft, accounting fraud, intellectual property theft, and time theft. It’s crucial to recognize these types of theft and put measures in place to prevent them.
1. Food and Inventory Theft
To stop employees from taking food and supplies, use tools to keep track of what you have, regularly check your inventory, and set clear rules.
2. Employees Who Stash Cash
Implement internal controls, close out drawers at the end of shifts, and use video cameras to prevent cash theft.
3. Challenging the POS System
Invest in an advanced POS system to detect voids, cancellations, and other manipulations.
4. Backroom Fraud
Be vigilant about backroom fraud, such as food theft, invoice miscoding, and complex schemes, by using automated inventory tracking and alert systems.
5. Fraudulently Collecting Loyalty Points
Monitor loyalty programs and apps for signs of employee fraud, such as accumulating discounts and points at the restaurant’s expense.
Preventing employee theft in restaurants is crucial for maintaining a healthy bottom line. By addressing motivation, creating a supportive work environment, and implementing preventive measures, owners can reduce the risk of internal theft in restaurants. Additionally, being vigilant and using modern restaurant technology, like Envysion’s Managed Video Solution, can help deter theft and protect the business from financial losses.
Interested in learning more about preventing internal theft in your restaurant locations? Let’s connect today.