Running a successful and profitable restaurant has always been tough. With the challenges of rising employee wages, a shrinking labor force, and increasing competition, it can feel like you are fighting for an ever-shrinking slice of the food service dollar.
In addition to being hawkish about performance and operational costs, there is another challenge lurking in your restaurant that is likely siphoning revenues from you daily. It is employee theft, and here are three reasons you need to take action:
1. Employees ARE Stealing from You
Most restaurant operators are very proud of their employees and would have trouble imagining that any one of them could steal from them. But that is not the reality.
75% of employees have admitted to stealing at least once from their employer and 36% admitted to doing it twice or MORE and employee theft now totals between $3 to $6 billion dollars annually in the foodservice industry (Garber & Walkup, 2004). These statistics include management. The problem IS real.
2. Employee Theft Can Be Extremely Difficult to Catch and Prevent
The types of employee theft basically fall into two categories:
- Shrinkage – which is the loss of inventory. The most common examples are when a guest orders a single-shot drink and the bartender pours a double, or he/she gives away a beer or cocktail for his or her friends or to get a larger tip (this would apply to giving a free soft drink or dessert as well.)
- Larceny – which the loss of cash or merchandise. This is the far more nefarious type. A guest orders two drinks, the bartender rings only one into the POS but collects for two. At check out, the bartender turns in what is “owed” to the house and pockets the rest. Or someone just walks out the door with a few steaks, a few bottles of wine or those nice coffee presses you just purchased.One of the easiest ways to attempt avoiding cashier related theft is to conduct “blind” checkouts, which requires employees to reconcile without knowing the exact amount they owe the house until they count it with the manager. Another area to watch out for are voids and comps executed by a manager after or near close.
But, even with video cameras and bulletproof systems, this can be tough to catch when you have a restaurant to run.
3. Employee Theft Can Put You Out of Business
According to the US Chamber of Commerce, approximately one-third of bankruptcies and/or business failures are directly related to employee theft. The same report states that 75% of these employee crimes go unnoticed. Those are some sobering statistics.
We have a team in our Restaurant Consulting department that conducts a personalized and comprehensive Restaurant Site Audit which focuses on diagnosing ongoing or potential loss or theft issues. Depending on the results, we can help you fashion systems and controls to keep more of your hard-earned revenues in your bank account.
Please contact us if you would like to schedule or discuss a Restaurant Site Audit for your location.