According to The National Restaurant Association, employee theft accounts for 75% of restaurant inventory losses. The numbers don’t lie – beverage theft is a very real problem. But, the industry as a whole has been slow to offer the right solutions.
HOW TO GAUGE THEFT IN YOUR VENUE
The first step to solving any problem is figuring out how big it is. Short of installing more sophisticated camera systems, how can you measure how much theft is affecting your business?
First, take a look at your beverage cost history and your profit margins. If you’re buying more but making less, you definitely have a theft problem.
Then, listen to your people. As Cornwell Jackson points out, “A more subtle sign of theft can be a change in employee morale as honest staffers witness others taking advantage of the system.” Talk to your team about the problems you see and get their perspective.
CAUGHT IN THE ACT: BEVERAGE PROGRAM THEFT
What comes to mind when you think “thief”? A burglar with a mask and bag of loot on his back? Beverage program theft comes in a slightly different package. Look out for these common forms:
Problem: Intentional Overpouring
As we talked about in our previous post, overpouring is a serious issue. In addition to indulging themselves, bartenders and servers will top off glasses for a few different reasons – to finish a bottle, hook up a friend, or boost their tips. Sometimes these practices don’t fall into the traditional image of beverage theft, but they should be treated as such.
Problem: Stealing Inventory
Stolen inventory hits hard. If a 33 oz. bottle of vodka disappears, you lose the amount you paid for that bottle as well as the revenue from selling 22 drinks. A recurring beverage theft problem is a good way to go out of business.
While most retail theft is perpetrated by customers, most bar and restaurant theft is committed by employees. Smaller packages – cans, bottles, or splits – are a common target. A large bottle of liquor is harder to steal and more likely to be missed but a couple of wine splits can easily slip into someone’s pocket.
Problem: Pocketing Cash
Cash is still king when it comes to theft. From short ringing to reusing receipts, servers can employ a number of tactics to skim a little off the top. Toast gives a good breakdown of some more creative ways in their article. The larger the venue and heavier the crowd, the easier it is to slip past your POS.
CATCH ME DOING SOMETHING RIGHT: PREVENTING BEVERAGE THEFT BEFORE IT HAPPENS
The majority of our clients say they would prefer a proactive solution. Nobody wants to act as judge, jury, and executioner to solve a preventable problem. Tightening up your practices, strategically using technology, and paying attention to employee culture are three great ways to discourage bad behavior before it happens.
Establish Good Practices
One of the most important things you can do to prevent beverage theft is keep a consistent and reliable system in place.
- Write everything down in a handbook, manual, or other document that employees review and sign to eliminate any grey areas. Define the consequences of breaking each rule and, if something does go wrong, follow through on reprimands.
- Conduct regular inventory checks and nightly counts. Make sure your staff sees you going through the process so that they know how much you care. Plus, they’re less likely to skim inventory they know is being closely monitored.
- Go over your cash handling procedures with every employee you hire. Requiring consent of two different staff members for every sales exception, deposit, and drawer closeout keeps the chance of discrepancies at a minimum.
- Track every ounce, including spills and complimentary drinks. That way, you won’t have to guess which discrepancies are theft. Tell your staff the proper procedure to offer comps so that they don’t resort to sneaking.
Recent advances in technology make it easier than ever to integrate and track operations across the board from inventory to point of sale.
- Install a reliable POS system to track your daily operations. You’ll be able to closely monitor the amount of complimentary food and beverage your staff gives out, as well as compare sales to inventory changes at the end of each shift.
- Simplify your inventory and management process. For example, install an on-tap dispensing system that pours from kegs rather than bottles. It’s much easier to track 12 kegs than 312 bottles.
- Collect data outside of your POS system. Dispensing solutions that keep track of every ounce poured let you compare actual data to what makes it into your POS.
- Avoid easy to steal packaging. As we mentioned above, smaller packages often slip into someone’s pocket at the end of the night. Not so with kegs – even if an employee is able to sneak a keg out the back door, they’re difficult to tap at home.
- Let the taps pour for you. Nowadays, you can serve everything from wine to cocktails on tap. Installing a system that measures each pour consistently will eliminate overpouring, intentional or otherwise.
Create A Fulfilling Work Environment
Instead of trying to plug every tiny hole, find ways to make employees more invested in your venue. They’ll feel less inclined to steal from you and guest satisfaction will benefit from their elevated moods.
- Feed employees before or after their shifts. A full staff is a happy staff. Feeding them a variety of menu items also help them make informed recommendations.
- Institute a “friends and family” policy. This encourages them to bring their loved ones to your restaurant and show off their work. As we mentioned before, just make sure you have a system in place to track every serving, even the complimentary ones.
- Have a reward system in place. Let your employees know that you appreciate them by rewarding exceptional work. This gives them a solid goal and something to look forward to.
- Keep employees informed and involved. Most servers guilty of intentional overpouring don’t understand how serious the losses are. Take time to show them what their loose practices cost the business and a good staff will make the necessary adjustments.