If you’re in the restaurant business, employee theft is a problem you should care about. The U.S. Chamber of Commerce estimates that 75 percent of all employees steal from their employers. On top of that number, data shows that 54 percent of employees eat for free, and 34 percent of employees have witnessed theft.
When it comes to the restaurant industry, the National Restaurant Association says operators are losing seven percent of their annual revenue to employee theft. For the average multi-unit restaurant operator, that’s roughly $700,000 lost to fraud. The restaurant industry is already battling rising food costs, minimum wage hikes, rapid turnover and a shrinking talent pool. The good news? Loss like employee theft is something most operators can find, stop and deter.
In order to better manage employee theft, operators need to understand how their workers are pocketing cash and, in some instances, inventory. Below, discover the three ways restaurant employees steal.
Point of Sale
The cash register is one of the easiest and most popular places for employee theft to occur. While taking cash from the register is one obvious form of theft, employees today are getting smarter about how they use the point of sale to steal. Manipulating transactions is an easy form of point of sale fraud. Multiple deletes, voids, or refunds over time from any given register usually double as red flags for employee theft. Operators should keep track of transaction trends and implement good cash register accountability practices throughout their operation. Pinpointing suspicious transactions will be pointless without the ability to also identify what employee was working the shift in question.
If numbers during inventory reconciliation don’t add up, it could be thanks to employee theft. In addition to loss of raw product, employees can also steal paper goods like plates and napkins. Inventory is money on the shelf, and stolen inventory is more money down the drain. Making inventory management a priority will help curb inventory theft – when employees know inventory is neatly kept, they’ll be less likely to steal from the shelves or freezer.
Studies show that time theft represents 10 to 15 percent of the fraud that happens in a restaurant setting. The term “milking the clock” rings true for many restaurant employees. When operators pay employees for hours that weren’t actually worked, that money should be considered theft. Restaurant leaders should make sure that managers are comparing the employee schedule to actual hours worked. Time theft often happens in small increments that add up over weeks or months. Always take the time to read a time card or time sheet before signing off, even though it’s easier (and faster) to approve without detailed review.