I’m A Good Person. Most of the Time...
Have you ever stolen anything? Did you get caught? When you were caught, was it your first time stealing? Even the most ethical employees can make bad decisions when something is right there for the taking. There’s too much temptation, even for those who usually make the best decisions.
No matter how much you trust your employees (managers included), you MUST be able to check thoroughly on their daily activities to find potential irregularities. When your employees make poor choices why should YOUR restaurant business pay the price?
Staying On Top Of It
How do restaurant companies monitor theft? The fact that nearly ALL restaurants have some form of employee fraud is, unfortunately, inescapable and the financial repercussions can be considerable. In this blog we will discuss:
- Why People Steal
- Types of Theft
- Areas of Opportunity
How Employees Rationalize Theft
Is it need or greed? Why do people steal in the first place? The fact is, the myriad of reasons runs the gamut...." I have an addiction problem", "They're so big, stealing a little bit won't hurt them", "I'm going through a rough time", "Everybody else steals, so why not me?", "No one will notice, besides, they owe me".
The reasons don’t really matter. What matters is how you can track this fraudulent activity and take steps to counteract and save your restaurant business hundreds of thousands of dollars, annually.
Who Steals and What Do They Steal?
Everyone from hourly employees to managers to customers can get very clever with what they take from your restaurants. Here are some of the more common ways:
- Cash, Voids, Coupons, Refunds, Split and Transferred Checks, No Sales, Unrecorded Sales, Deposits
- Time Theft - Buddy Punching (Clock in Early or Clock out Late)
- Inventory to convert to cash (food, cleaning supplies)
- Dine and Dash
- There’s a bug in my food
Looking back, what were there signs of theft that you missed? What types of things have you seen stolen? What areas of opportunity for theft exist in your restaurant business? There may be many indicators and some may warrant further review of a specific area or activity. These may include:
- Unusually large amounts of payments for cash
- Inventories and financial records not reconciled
- Unauthorized transactions
- Lack of internal controls
- High turnover of personnel
- Unexplained entries in records
Ongoing fraud can severely impact restaurant profitability. The solution is to find what exactly you are able to control, and double check all the details. Some techniques used to steal seem obvious when restaurant executives are re-tracing steps, however, a skilled thief knows the scrutiny he/she is working under. So they take action in a smart way. Therefore, you have to be even smarter! Confirm that your staff is doing their job and that they aren't breaking the law to line their pockets. Make it impossible for fraud to take place in your restaurant company.
Have control over your restaurant data and inspect it. Examine only the exceptions that require attention and swift action. Analyze all of your sales, deposits and employee punches and make it known. As soon as everyone realizes that you’re reviewing all of the restaurant information they will think twice before they steal.
What do you do when theft is detected? What are the ways to detect fraudulent activity using your current reporting tools? What types of exception-based reports are you utilizing to pinpoint fraud?
What are your thoughts?
How are you currently monitoring restaurant theft?
Mirus provides services in data management and solutions in custom reporting for the restaurant industry.
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