Operations

How to prevent employee theft in restaurants

Restaurants that deal with employee theft can control it with these helpful tips.

Photo: Adobe Stock

January 5, 2024 by Paige Phillips — Content Marketing Manager, Envysion, a Motorola Solutions Company

Employee theft in restaurants is a big problem that can seriously hurt a restaurant's profit. The United States Chamber of Commerce says it could cause a loss of about $3 to $6 billion every year. Tackling this concern head-on, restaurant owners need to adopt innovative strategies and implement solutions to create an environment that discourages internal theft.

Understanding the driving forces of employee theft

Employee theft happens because of a mix of reasons like motivation, opportunity and rationalization. Low wages, feeling treated unfairly or having money problems can push employees to steal. To stop employee theft in restaurants, it's crucial to deal with these core problems:

1. Fair pay and benefits

Reducing the urge to steal starts by paying fair wages and giving employees benefits. Fair pay and better overall well-being make a positive workplace, lowering the chances of desperate employee theft in restaurants.

2. Encourage responsibility

Building a culture where everyone takes responsibility and supports each other is crucial. Keeping communication open and providing resources for employees' physical, financial, and emotional needs builds trust and lowers the chances of employee theft in restaurants.

3. Provide healthy staff meals

To address food insecurity among restaurant workers, provide free, nutritious staff meals. This not only shows care but also lifts team spirits, making it less likely for employees to take food from the inventory.

4. Dealing with problems early

Acknowledging the stress that comes with working in restaurants, it's important to communicate openly and quickly resolve conflicts. Recognizing and addressing tensions among employees can help prevent potential theft. The National Restaurant Association shares concerning statistics: three out of four employees engage in workplace theft at least once, and half repeat the offenses.

Spotting and preventing opportunities for employee theft

Creating a positive workplace is crucial, but it's equally important to be watchful for potential theft opportunities. Different situations can open the door to internal theft in restaurants, and understanding and stopping them is vital.

1. Short ringing/short changing

Implementing a system where employees count cash without knowing the exact amount at the end of their shift makes it more challenging for them to steal money and cover it up.

2. Controlled complimentary items

Establishing and enforcing a policy for giving away free items helps in monitoring and preventing excessive product giveaways by employees.

3. Voids or canceling orders after closeout

Monitoring voids or canceled orders, especially after closing, and keeping a record of manager approvals ensures fairness and prevents potential issues.

4. Reprinting receipts

Tracking the frequency of receipt reprints, especially drilling down to specific employees, enables proactive understanding and resolution without hastily assigning blame.

5. Safeguarding cash registers

Utilizing managed video security software aids in tracking unusual or suspicious transactions, acting as an extra set of eyes against potential employee theft in restaurants.

Dealing with suspected employee theft

When suspicions arise that someone on your team might be involved in internal theft, it's crucial to first explore alternative explanations before making accusations. If it turns out that theft did occur, approach the situation carefully:

Have a discussion with your entire staff about the missing item or money, allowing them to return it without facing immediate punishment.
If the item or money is returned, engage in a conversation with the employee to understand the reasons behind their actions and provide support if needed.
If theft persists despite clear evidence, you may need to consider letting the employee go. If necessary, consult with a lawyer to explore legal actions

Common types of employee theft in restaurants

Employee theft comes in various forms, including food and inventory theft, checkout theft, accounting fraud, intellectual property theft, and time theft. Recognizing these types of theft and taking preventive measures is crucial.

1. Food and inventory theft

Regularly checking inventory, using tracking tools and establishing clear rules help prevent employees from pilfering food and supplies.

2. Cash stashing

Implementing internal controls, closing out drawers at the end of shifts and using security cameras act as deterrents to cash theft.

3. POS system manipulation

Investing in advanced point of sale (POS) systems to help in detecting voids, cancellations and other manipulations.

4. Backroom fraud

Stay vigilant against backroom fraud by using automated inventory tracking and alert systems. This helps counteract complex schemes, invoice miscoding and food theft.

5. Fraudulent loyalty point collection

Safeguard against financial losses by monitoring loyalty programs for signs of employee fraud, such as accumulating unauthorized discounts and points.

Reducing the chance of employee theft in restaurants is crucial for maintaining a strong financial position. Owners can achieve this by tackling motivation, creating a supportive workplace, and putting preventive measures in place.

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