Why do you need Restaurant Theft Prevention?
Many restaurant owners and management are completely oblivious to theft happening right under their noses on a daily basis in their restaurants. No business is immune to theft. Using common sense restaurant theft prevention will help you save money. Thieves often profit from cash paying customers.
Unfortunately, 70% of revenue loss comes from employees, possibly by theft, training or mistakes.
Did you know that 90% of restaurants fail in the first year, while %10 survive? Revenue loss, whether it is directly related to theft or not, will make a huge impact on your restaurant’s future.
Theft Comes In Many Forms
Restaurant Inventory Percentages for Restaurant Theft Prevention
Typically, a profitable restaurant needs to maintain a food cost percentage 25% to 35%. The restaurant style and menu impact the range of the food-cost percentage. Generally, high-end restaurants will have a higher food cost percentage. The fast-food restaurant food cost averages 25% or lower. Food costs of 28% to 35% at sit-down restaurants. Again, this depends on the menu mix and the style of the restaurant.
Restaurant Prime Cost:
Most restaurants prime cost percentages need to be 60% to 65 %. Restaurant prime cost includes food revenue, labor cost, payroll taxes and employee benefits, including unemployment taxes and health insurance. If your restaurant prime cost is 65% or higher, then that should be a red flag for revenue loss.
Excessive Voided Guest Checks are a sign of Theft
Employees can void cash-paid guest checks from the system. Then the cash payment goes into the pocket of the person who voided the guest check. Generally, thieves will target guest that pays cash. This particular type of theft will also create a high food cost percentage.
Customer check voids are a manager’s function. Some employees may take advantage of the situation by asking for the manager’s swipe card. These employees will typically wait until the manager is locked into a position such as cooking in the kitchen. Some managers may give up their swipe card to key employees because they trust them. Never trust anyone with your swipe card. If an employee uses the swipe card to commit theft, then you, the manager, will be responsible mainly because your swipe card is attributed to you and no one else.
If you have a standard POS system, then you should be able to create a report that shows voided checks per server. Look for inconsistencies in the server void totals. Compare them to other server voids. This can be avoided if the managers are the only people the swipe card.
Watch for Excessive Use of Restaurant Coupons in Restaurant Theft Prevention
Restaurant coupons that are saved and applied to guest checks-AFTER the guest has left the restaurant. Servers or managers may apply coupons to guest checks, then pocket the cash.
Restaurant employees can clip out coupons from various sources such as newspapers or magazines. Customers may leave unused coupons on their table. The customers may even give the unused coupons to the server to give out to other customers who can use them.
Restaurant Theft Prevention-Coupons
There are several ways to detect and prevent coupon theft:
- Server check pad audits. Before any peak time period, tell each server to open up their server check pad so the manager can view the contents, look for loose coupons. If you discover loose coupons and they are not linked to any guest checks, then they should be destroyed by tearing them up and placing them in the trash can. Think about this, what purpose do these lose coupons serve?
- When a coupon is redeemed there should by two initials of them, the server and manager’s initial. The words VOID also should be written the guest check. The coupon should be stapled to the customers closing check.
- You should be able to track each server’s voids in your restaurants POS system. Look for inconsistencies and patterns. Compare each server bid amounts. At a glance, you should be able to pinpoint potential theft or errors.
Restaurant Theft Prevention and the use of the No Sale Button
This is an easy way to steal from the register. The guest gives the guest check to the person accepting payment, then that person opens the register using the no sale button. Once the drawer is open the employee will cash out the guest. If the guest requests a receipt, then the employee will print out a copy of the bill and give it to the guest. Of course, this will only work if the guest is paying cash.
NO “No Sale”
A good idea is to eliminate the no sale button from your register. The only way for anyone to access the register is the employee that is assigned to the register or the manager. Contact the company where you bought the system from and they should be able to disable the no sale button.
If you prefer not to disable the no sale button then you need to closely monitor the register by viewing reports that will generate how many times the no sale button was used and by whom. To decrease potential issues with the register, install cameras.
“The Big Three”
There are servers who will purposely not add certain foods and drinks to the guest check: Some servers believe if they fail to place all the items onto the guest check, then the guest will leave a bigger tip to that particular server. There are three groups of certain products that servers may forget to add to the guest check. These are known as “the big three.”
Often these are server prepared items. It’s relatively easy to miss entering these items into the POS system, whether done intentionally or by accident. Either way, this created revenue loss and a high food cost percentage.
How to prevent this loss
To prevent or discover this type of issue the owner or the manager needs to perform a table audit. Print out a guest check and match up what’s on the slip to what’s on the table. Instead of accusing the employee of stealing, the owner or manager will open up that particular check on the POS system and place those missing items into the POS system and inform the server of what you did.
There is a high probability that the server forgot to place those items into the POS system because they are server prepared items. Maybe, the server will tell you that he/she does not have time to put those items into the POS system because it is time-consuming. Managers need to educate the staff to enter the drinks and foods into the POS system consistently.
What does this mean?
Let us suppose the server forgot to put the drinks on the guest check and the guest leaves without paying for those items. On that particular receipt, two drinks totalled at $4.00. Say you lost $4.00 a day for a full year, as a result, this is $1460.00 in revenue loss. That is a great deal of money, yet it was only one server mistake. I am quite sure that other employees are making similar mistakes, even though this is merely one item on your menu. Potentially, you might be out hundreds, if not thousands, of dollars in revenue loss that can be prevented.
Misuse of Credit Cards
This is another form of theft, and the customer is impacted. Here is how it works: the guest signs the credit card slip and the signed copy is given to the guest, but then after the guest departs the restaurant the employee edits the tip amount to a higher amount. Another way is the guest paid with a credit card and left a cash tip on the table and then the server writes in a tip on the credit card receipt.
The credit card that was altered can be difficult to detect. The server might have drawn a line through the old amount then creating a new tip amount. The server may have used an eraser to remove the old tip, this pattern should be noticeable and questioned. The customer may notice on their credit card statement that the tip was changed. The customer will call the restaurant to inform them that their credit card tip has been changed and that the customer want’s the difference credited back to them. Often the credit card company will get involved to help solve the matter.
Restaurant Theft Prevention to Avoid Credit Card Investigations and losses
Detect this sort of credit card theft, when you collect the servers ending cash and paperwork, including credit cards. Look for altered tip amounts, different pen colors or writing styles. If the manager suspects a server changing the tip on the guest check then the manager should conduct an investigation by reviewing other past credit cards for altered tip amounts. If the manager discovers other altered tip amounts then the credit card company needs to be informed. The credit card company will conduct their own investigation by contacting those affected by the altered tips on the guest checks. The police can be informed of the situation. Make sure you have proof because it is a bad practice to accuse an employee of wrongdoing without proof. Get the police and credit card company involved when it comes to theft.
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Theft and Abuse of Employee Meals
Some restaurants give their employees a discount on their meals 25% to 50% off the full amount. In today’s uncertain economy, every penny counts. Employees who do not pay for their food are stealing from your restaurant.
Here is an example:
John, the cook, decided not to pay for his meals. He cooks up a burger and fries and eats the meal while on the clock, concealing it from other employees and management. The cost for this meal is $7.49. John eats free meals 5 days a week. One week’s time, he ate $37.45. In a month he ate $149.80 of your profits. Over the year he ate $1797.60 or your profit. Those numbers are huge, but keep in mind that was only one employee.
Create an employee meal policy:
Employees should take their meal break before or after the peak meal periods. Management authorizes the meal break. The employee eats the meal in a designated area. The cooks prepare all employee meals. If employees cook their own meals, they may add extra unpaid items. This impacts inventory and food costs.
The manager enters the employee’s meal into the POS system and receives the payment. The manager and the employee will initial the slip. The employee needs to keep that receipt while eating the meal. Anytime a manager asks, the employee shows proof of purchase in the form of the receipt.
Restaurant Theft Prevention policy may be “No slip, no food.” The cook prepares food is prepared, only with a valid ticket. The only exception to this rule is if a manager verbally requests to recook a meal due to a guest complaint.
Restaurant Forms and Checklists
The use of restaurant forms, restaurant forms and checklists and restaurant spreadsheets dramatically increase your restaurant chances of survival. Management consistently and correctly uses the restaurant forms and checklists to impact the restaurant theft prevention policies.
There are many types of restaurant forms and checklist that will help organize your restaurant:
- Front of the house forms and checklists
- Restaurant kitchen forms
- Restaurant cash control forms
- Cleaning forms
- Restaurant inventory spreadsheets
- Customer service forms
- Restaurant server forms
- Timekeeping System
Go to: http://www.workplacewizards.com/restaurant-form-2/ to view all restaurant forms and checklists.