4 things to look for to reduce employee theft in restaurants

Many restaurant owners view their team as an extended family, and the thought of one of those family members intentionally stealing is unwelcome at best. But the reality is that roughly 75% of restaurant losses are caused by employee theft. That can add up to over 3% of a restaurant's annual revenue getting lost to dishonest workers.

An effective restaurant loss prevention program is an easy win that will make your restaurant more profitable and keep your extended restaurant family honest, so let's look at the most common types of loss and how you can prevent point of sale employee theft.

1. Deletions / Cancelled Orders

The problem: A cashier rings up an order, serves the customer, and then deletes the order so that they can pocket the customer’s money.

One solution: An increase in deleted items doesn't necessarily mean an employee is stealing from you, but it may be cause for double-checking. Your POS system offers a variety of reports, one of which can track deleted items. The report will tell you the date and time the item was deleted, how much the item cost, and which employee deleted it.

2. Discounts

The problem: Studies show that up to 40% of all employee meal discounts are fraudulent. This means that employees are using discounts to feed themselves, friends, or family without prior approval. Managers may manipulate inventory or steal funds by ringing up orders and applying a 100% discount to them. This makes it easier to keep a customer’s money or steal inventory.

One solution: Create a more transparent work environment. Show your managers and employees the reports that you can print off from your POS terminals so that they know you see all. Explain how video and other traditional surveillance methods can be used to pinpoint thefts. When employees know how easy it is to get caught, they’ll be less likely to steal.an

3. Over-rings / Voids

The problem: An employee or manager takes an order and tenders it for cash, but the guest changes their mind and wishes to pay with a credit card. Now the order is over-rang (also called a void), so the employee re-rings it and tenders it to the credit card. This technique is typically used to let the customer choose a different payment method, but it can also be used for customers’ mistakes, customers changing their minds, or customers leaving without paying and without product. However, sometimes employees are quick to learn this as a method to steal and will use it to pocket cash.

One solution: Set the expectations high for your cashiers and managers. Void and over-ring receipts must be reconciled when the cashier’s register is settled. Reconciliation means that every void or over-ring must include the original receipt, the void receipt, and the re-ring receipt (when that applies), with explanations and signatures by the cashier and manager. During the next business day, all void and over-ring activity must be verified while reviewing the previous day’s paperwork. And remember: Coach, coach, coach, and hold your team accountable for any gaps!

4. Refunds

The problem: Refunds are typically used to settle (return money) with a guest because they were unhappy with their experience. Fraud can occur when a manager or employee refunds money to a friend or family member (another form of eating for free), performs a cash refund on a credit card purchase and pockets the cash. There are even examples of employees putting refunds on their own credit cards, thereby stealing sales from their employer.

One solution: The same action steps noted above for over-rings and voids applies here. You should also double-check that refunds were refunded to the purchasing credit card. In many cases, video surveillance can support your follow-ups. Your POS data can also reveal that certain employees issue way more refunds than others, prompting you to keep a closer eye on what they’re doing.

Note, as this typically applies to every POS system: Register keys and manager codes are needed to perform many of these functions. Therefore, they should be kept secured at all times. Change the manager codes regularly; even daily as needed.

Get a head start on loss prevention

Building an effective program to reduce employee theft is no cakewalk. It takes planning, hard work, and follow-through.

If you’re looking for a faster way to get started, then consider using loss prevention software. This type of software can save you hours of time that would normally be spent poring over POS reports and doing your own investigations.

An automated loss prevention solution like Delaget Detect can take it a step further. Not only does it look for loss and identify its main causes, but it will also give your managers specific recommendations every day that will reduce loss in their store.

Running a profitable restaurant and having a great relationship with your employees doesn’t have to be an unfulfilled dream. You can make it a reality with a little loss prevention and some smart software choices.