Preventing Restaurant Employee Theft

March 21, 2012 Brooklyn Eagle Staff

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By Prof. Patrick O’Halloran
Professor of Hospitality
New York City College of Technology

BROOKLYN — The National Restaurant Association estimates that internal employee theft is responsible for up to 75 percent of inventory shortage, which is approximately 4 percent of total restaurant sales. In a recent anonymous survey, which was sponsored by the National Food Service Security Council, 49 percent of respondents answered “yes” to the question, “I can steal from my employer anytime I want.” With the proper controls in place one can ensure that employee theft will be a rare occurrence.

Important steps that should be taken to eliminate/prevent employee theft in your restaurant:

• Your restaurant should have security cameras installed at all the key points within your establishment. All employees should be informed that these cameras are in place.

• Food inventory must be recorded. Purchase orders, usage and waste must be accounted for and a paper trail and computer printout must be reviewed on an ongoing basis. Data should be updated at the close of each shift.

• All sales must be recorded. All food and beverage sales should be tracked through your point-of-sale system. The mantra here should be “no freebies” without your knowledge.

• With regard to your PCI (Payment Card Industry Security Standards), the restaurant computer firewalls and other safety precautions should be periodically updated to ensure that your customers’ credit/debit card information is not hacked or stolen.

• The owner or senior manager(s) should have access to the safe. There must be limited access to cash drawers and the restaurant safe. With regard to cash drawers only the assigned employee should be allowed to complete transactions from “their” cash drawer. The fewer hands that touch the cash, the less the chance it will be stolen.

• For complete accountability of all cash handled by employees you should ensure that a receipt is provided for every transaction.

• You should use a drop-safe so that you will limit the amount of accumulated cash in any register.

• One should always check and review cash-to-sale ratios. Discrepancy here along with unusually frequent refund transactions is a red flag for employee theft.

• All applicants must be screened properly before they are offered a position within your restaurant.

• To prevent over- or under-pouring of liquor, you should have a house policy that jiggers must be used at all times.

• To ensure that all drink and food is rung up for patrons at all times, a check must be opened once an order is placed.

• Secret shoppers/mystery shoppers pose as customers who record their observations and rate the restaurant, food and employees. These shoppers can also observe the employees with regard to trends or loopholes that allow for employee theft.

• Clear signs should be posted indicating areas that are open to the public and employees. Storage/supply rooms and offices should be kept locked so as to limit access.

If your employees know that there is a theft security system in place, then most will not attempt to steal.

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Professor Patrick O’Halloran teaches at New York City College of Technology in Brooklyn. His latest book is titled Detailed Job Descriptions in the Hospitality Industry. His email address is [email protected]