5 Tips to Protect Your Restaurant from Embezzlement

Protect your restaurant

Most small businesses have minimal profit margins so when 5% of your revenue is loss to fraud; it represents a significant amount of money that could represent the end of your restaurant. We have to face the fact that despite our denial and high level of trust, when there is opportunity, pressure and rationalization, our employees will steal from us. To confirm that employees are taking advantage of you, when you have suspicions, is to look for patterns in sales, disappearance of products, and lighter cash flows. Some strategies might be less obvious such as having made payments for shipments that never arrive or using the company credit card to make personal purchases. Regardless of the type of fraud, you need to look out for yourself. If you can prove an employee is stealing from you, firing him or her is probably the quickest and cheapest way to get rid of the problem.

Although this is unfortunate, it should not be surprising as 75% of restaurant employees have confessed that they have previously helped themselves at least once to money or goods in their workplace. This represents billions of dollars in losses every year. Here are some of the ways your employees are stealing from your restaurant. The most inoffensive one is by using their cellphone while on the clock. Every time they check their screen, they interrupt their work and cost you money. Diminution in productivity results in financial losses in every business. You can reduce this loss by having a clear cell phone policy and scheduling regular breaks for your employees.

Another trick is for waiters to charge the customer the right amount for a drink or meal, but to key in a different item, usually at a lower cost, on the cash register. The employee pockets the difference and by the time you realize the subterfuge, it is too late. Sometimes, your employees take advantage of the availability of the food or drinks you offer, especially in small restaurants or where finger food is available such as in mezza restaurants. To protect yourself from such fraud, put locks on cupboards and have detailed inventories. You may want to feed your employees before their shift, a strategy that might pay off in the long run.

A long-lasting way to steal is the infamous dine and dash. Although it might legitimately happen on occasion, it is an easy way for a waiter to pocket some cash as it is illegal for you to deduct your loss from the waiter’s pay or tips in New York. The best protection against such fraud is to install video surveillance. If you cannot afford the real thing, place fake cameras and signs around the dining room so waiters and customers think they are being recorded. Another useful trick is to have a host at the front of the restaurant to intercept customers too eager to leave before settling their bill. Having only one official entrance through which people come in and leave is also helpful in this type of theft. Don’t despair and be vigilant, you have worked hard for your business, don’t let negligence take it away from you.