According to the National Restaurant Association, internal employee theft is responsible for 75 percent of inventory shortages and is an $11 billion problem in the U.S.
Those figures are very worrying, but the good news is you can do something about it.
“There’s probably not a bar that hasn’t experienced theft at some point or another,” says Mike Reis, owner of BevIntel Seattle. “It’s a problem because of what people don’t think of as theft such as over pours or freebies. People walking bottles out of the place is another problem.”
But, he added, most employees aren’t doing it maliciously. “They don’t see how it overall affects their own tips or the bar. But the truth is, they lose tips because the customer is drinking less.”
Here are some tips from on how to reduce employee theft:
- Involve your employees in your business. Show them how many drinks they sold; show them what their average pour size is. Show them the big picture. Let them know that if the bar’s sales suffer, it will go out of business and they’ll be out of a job.
- Allow them to pour comped drinks, but within reason. “I believe comping is part of the business,” says Reis, “but ring everything up.” Allowing your employees to offer comped drinks empowers them,” he says. “Tell them how many drinks a night they can give away. And make sure they know that whatever they do has to be beneficial to the bar, not the bartender. I’ve seen bar owners be handcuffed to the bartender because they think he has the relationship with the clientele, not the bar. But that’s never true and don’t ever put yourself in that situation.”
- Ring up everything, he adds. “If you drop a bottle ring it up as the number of shots associated with that bottle.”
- If you use a cash register, get rid of it and use a POS system. “This is the single biggest thing you can do,” Reis says. “If you use a cash register, there’s your Number One place for theft.
- Ring up all beverages first, before you pour so you can guarantee everything’s being rung up.
- Test your employees on their pours. Ask your bartender to pour you a martini and measure it. “I call this a slow bleed because people think a quarter of an ounce isn’t a lot but when you add it up in the weeks, months and years it can result in a few thousand dollars lost,” says Douglass Miller, assistant professor, table service, at the Culinary Institute of America in Hyde Park, N.Y. “It quickly adds up.” He suggests letting bartenders practice their pours with water-filled bottles.
- Trust but verify. Trust that your employees are good and competent but verify it from time to time.
- Make sure any cash that’s used goes—in full—into the cash register. At most bars, 85% of business is in credit cards, Reis says, but the cash should be handled carefully–and properly.
- Don’t waste any remaining drink in a bottle. Don’t top off drinks. Reis points out that many bottles—especially for wine—are 750 ml. (or 25.36 oz.). If a bar is pouring standard 6-oz. glasses of wine, after four glasses, there’s a little left in the bottle. If you’re selling six bottles of that wine a night you have an entire extra glass. “But of course,” adds Reis, “if you have some wine that’s going to go bad and you’ll throw out the wine anyway, absolutely pour it into a customer’s glass.”
- Do a weekly inventory that tells you the bar’s performance as well as the overall profitability of your operation. “When you do your inventory, look for anomalies,” says Miller. “And do it at least once a month, if not every other week. A lot of people don’t like doing it because it’s time consuming, but it’s essential in the beverage industry. Without inventory, how do you know your costs?” And preferably have the same person, or same couple of people handling inventory, he adds, “so they can look out for anomalies.”
- Reis suggests not using jiggers to measure alcohol because a good bartender should know how much to pour. But if it means your bar will save money, they’re OK, especially for the short term.
- Use technology. Miller points to electronic devices that measure the alcohol remotely.
- Make sure you hire the right staff, says Miller. “If a job candidate has worked several different bars, ask yourself why. Preventing theft starts with putting good hiring practices in place.
- Let staff know there are controls in place for alcohol theft. “If the employees know you are watching, they’re less likely to try something,” Miller says. He suggests installing cameras or just letting employees know an owner or manager is checking up on them.
- Train your employees. Train them on your business, train them on beverage costs. Train them on waste, train them on proper pours. “When you share this information with them, they get a sense that you’re tracking them and paying attention to what’s going on—that you’re not just counting bottles to count bottles,” Miller says.
- Make clear the actions you’d take if you caught an employee stealing. Your employee manual should describe any consequences and new hires should sign off on it.