Article

Loss-prevention technology and the fight against employee theft

The U.S. Chamber of Commerce estimates that 75 percent of all employees will steal from their employer at least once. That’s a big number, and the restaurant industry isn’t immune.

October 28, 2015

By Brooks West, product manager at Delaget

It’s no secret that restaurant operators everywhere are working to fight employee theft. The U.S. Chamber of Commerce estimates that 75 percent of all employees will steal from their employer at least once. That’s a big number, and the restaurant industry isn’t immune. Employee theft is a $14.5 billion issue for restaurateurs annually. Workers are doing more than simply reaching into the cash register and pocketing money. Today, employees are finding ways to manipulate point-of-sale (POS) technology to steal.

"Point of sale theft is one of the most common forms of employee fraud," said Ed Heskett, veteran restaurant loss prevention specialist, who noted that by abusing cash-register capabilities like deletes, voids and refunds, restaurant employees can beat the system and take home extra money. "It doesn’t matter how loyal or tenured the employee is," he continued. "If there’s an opportunity to steal, many employees will take advantage of it."

Heskett suggests that creating loss-prevention roles, tightening hiring practices and building efficient employee schedules all help to curb employee theft; but adding electronic oversight to loss prevention plans has the greatest impact of all.

When restaurant operators use data analytics to boost loss-prevention efforts, they stand to gain 3 percent in topline revenue. With annual unit sales of $1 million, loss-prevention technology users can boost revenues by $30,000 per store. Increasing the bottom line is the ultimate goal for most restaurant software, but new technologies have other benefits, too.

Below, discover the ways technology can revamp every restaurant’s loss-prevention strategy.

Save time

All restaurant operators share one common problem: their stores produce too much data, and it’s in too many places. Today, loss-prevention applications eliminate the need for lengthy spreadsheets and piles of paper reports. By integrating to POS and back-of-house systems, data is collected, normalized in the Cloud and displayed in an easy-to-read format. Graphs, lists and drill-down features on dashboard displays make consuming the information easy and quick. Some applications allow operators to review metrics and understand the health of their business in just five minutes a day.

"I can see all the loss prevention data that matters to my business on one screen," said Jeff Williams, vice president of operations at Border Foods, a Taco Bell franchisee. "I don’t waste time poring through tons of reports to find data outliers anymore."

Access data from anywhere

By using Cloud technology, restaurant loss-prevention software enables busy above-store leaders to access their store data from anywhere, including their laptops and smartphones. Accessibility to data is a key component to every successful loss-prevention strategy, especially for multi-unit restaurant owners. Pinpointing loss-prevention issues across many units can be challenging without data integration and a place to view that data at a glance. Many SaaS technologies use the Cloud to store restaurant data, giving restaurant operators the ability to see the metrics that matter without having to be present in every store.

Monetize loss

Loss-prevention technologies identify employee theft by scanning POS data for red-flag transaction trends overtime and connecting those transactions to dollar amounts. Operators who incorporate technology into their loss-prevention efforts know exactly how much money they’re losing to employee theft, and that’s a motivating number. Knowing each store’s missed revenue metric enables operators to set goals and thresholds for their organization. These goals help leaders hold store managers more accountable.

Spot negative trends over time

In addition to reviewing each store’s metrics, loss-prevention technologies allow operators to discover negative trends over time. Through targeted data tracking, restaurant leaders can easily see areas of operational weakness for any given day, month, period or year, allowing them to refocus energy where it’s needed most.

Act on suspicious data

The presence of a few deletes or refunds isn’t enough to signal employee theft. In many cases, those kinds of singular transactions indicate that an employee may need more training or coaching. But when specific employees consistently ring up various red-flag transactions — like deletes, refunds, voids or cancels — it’s probably theft.

It’s one thing to know that your store has too many suspicious transactions. It’s another to actually connect those deletes or refunds to a specific cash register and employee. With applications that integrate with the POS, operators can drill into each ticket in question and connect those actions to the employee running the cash register at the time of the transgression. This takes the guesswork out of loss-prevention and helps managers build bulletproof theft investigations.

Security capabilities and integration

By using data analytics, operators can pinpoint outlier transactions. But with the help of cameras, specific employee actions can be seen, documented and connected to suspicious transaction times and dates, making a loss-prevention investigation more efficient.

Brooks West is a product manager at Delaget, a leader in innovative restaurant technologies, and is responsible for the innovation and implementation of Delaget's suite of services. West earned his BA degree from St. John's University and is currently working toward his MS in predictive analytics.