Restaurant Articles

Tips on Loss Prevention for Restaurants: Identifying, Viewing, and Addressing Employee-Caused Losses

By July 26, 2016 No Comments

This is the third and final article in my series about loss prevention for restaurants. The first covered how to identify employee-caused cash theft, and the second reviewed other employee-caused activities that lead to losses. Today, I’ll share an innovative approach to help you identify, view, and address loss activity in your restaurant.

Combining Exception-Based Reporting and Video

One of the most efficient and effective ways to identify employee-caused losses is to use modern video-driven business intelligence technology that goes beyond traditional video surveillance to integrate exception based reporting (EBR) with video. The goal: to identify and address suspicious patterns and questionable transactions. With this approach, most transactions that are high-risk for employee-caused losses can be set up as exceptions, thereby having the system efficiently identify only those point-of-sale (POS) transactions requiring a closer look. Experienced loss prevention personnel (whether your own or those from a third party) can then pull up the corresponding video to see what transpired in the transaction, and whether corrective action needs to be taken.

This approach can be very effective. In fact, the charts below show the impressive results for two restaurant chains (one QSR, and one fast casual) after implementing integrated video and EBR. Apply these percentages to your business, and you’ll have an indication of the benefit to your company.

The first chart shows the reduction of exception activity after the first report generated for the restaurants in the test group:


The second chart shows the long term reduction in exception activity in a chain with a weekly auditing program:


Whether you’re trying to justify the cost of a new integrated video program, or simply trying to improve the use of tools you already have as part of your restaurant loss prevention program, following are a few points to consider:

  • Selecting a video-driven business intelligence tool that is web-based has the added benefit of allowing loss prevention personnel to view live and recorded video clips remotely, and regularly, via the Internet, without the expense and time of traveling to a restaurant to review video.
  • Outsourcing the auditing and review of video to a reliable party such as my company King Rogers Group is an effective way of receiving the benefits from a video-driven, business intelligence system. It can free your staff’s time to focus on proactive loss prevention functions such as employee training. And, rather than relying on a restaurant manager who is not experienced with loss prevention for restaurants, outsourcing this function allows you to use experienced, unbiased personnel to review video.
  • Asking cashiers to explain what may turn out to be innocent behavior still has the benefit of proving to them that video is captured and reviewed, and that dishonest activity will be addressed.
  • Employee turnover rate is high in the restaurant field. A problem will not be permanently resolved just because you’ve identified and removed a thief. New employees create new potential problems, and you need to have an effective solution for loss prevention long term.
  • It is not only theft that can be identified through video-driven business intelligence. Programming errors and misapplication of promotions can be identified and corrected to save on your bottom line.