Restaurant Management Tips

The most unfortunate part of being a restaurant owner is dealing with employee theft. According to the US Chamber of Commerce, an estimated 75% of employees steal from their employers and make a habit of it.

Training and other corrective actions can be taken to minimize employee theft, like creating a loss prevention (LP) plan. The foundation of a restaurant LP strategy rests on two pillars: integrated restaurant POS technology and advanced data reporting. When combined, you have an effective method of identifying high-risk behaviors and suspicious patterns.

Restaurants, as well as other businesses (both online and physical), struggle with fraud every day. Luckily, there are several ways to prevent fraudulent activities.

Designing a restaurant and bar loss-prevention strategy is critical to managing a profitable business, regardless of your size or level of success. Whether your restaurant is brand new or an established chain, the smart business owner devises an LP plan. It’s too risky to ignore preventable measures of profit loss.

Sadly, most of the loss prevention needed in restaurants focuses on employees, but creating a plan that reports all moves made by employees helps to keep employees from scamming in the first place. Knowing that you are being tracked helps to keep people honest. Integrate a reporting system and let your employees know they are being tracked, but do not give them the particulars of every report, as this will give them access to skirt around the system and find new ways to scam the restaurant’s bottom line out of more money. An integrated reporting system helps you keep track of your funds and spot scams right out of the gate.

Learn more about specific types of Loss Prevention scams you can prevent here.

A Loss Prevention strategy for the modern restaurant owner requires two practices:

  1. Reporting and analyzing
  2. Actions are taken based on reports to prevent loss

The technological capability to organize data, like a POS, which allows you to identify the sources of profit loss.

Create a comprehensive Loss Prevention plan that involves analysis, maintenance, and communication.

At the core of your loss-prevention strategy is automated data analysis. This frees up your time, removes human error, and allows you to redistribute resources more effectively.

With an LP strategy in place, you can identify the most common scams and use your POS to set alerts. For example, if you were to detect a transfer scam.

What is a transfer scam?

A transfer scam is when a server opens a check and then transfers order items from cash checks to an open check throughout his or her shift. When he or she is ready to close out, a promotional code or coupon is applied towards the open check. There are quite a few variations of transfer scams, but with the right parameters in place, almost all of them can be spotted and stopped in their tracks.

To eliminate a transfer scam the fast way, set a transfer limit, like allowing just three transfers a shift per employee. This means you won’t have to review video footage or check data manually. To set the right limit, take old data to identify what would be an unusual number of transfers, and decide on an acceptable transfer limit. With the alert system, you will know immediately if any unusual or suspicious employee activity takes place after.

You can always adjust to a more tolerant threshold later. If you have to take management away from other projects or managerial duties to deal with threshold limits, it is time to make adjustments based on this information.

Typical Employee Fraud Schemes Found in Restaurants

Look out for these other common types of restaurant and bar fraud scams. Using data analysis and your POS, you target scams and prevent them.

Wagon Wheel Scam

A wagon wheel scam is pulled off when a server transfers an item that has already been paid for to another table, without accounting for the payment when a customer pays in cash and then pocketing that money. With the proper use of security enablements on your POS system, you can require a password to transfer menu items from one table to another. While this feature can be useful at times, it is rare that a server will need to transfer items from table to table, and a manager can help them bypass the password enablement section in the rare event that they need to do so.

The wagon wheel scam is more popular than one might think. To monitor if any fraudulent activity is going on at your restaurant by way of a wagon wheel, review same-item transfers in cash transactions by employees. You can also monitor the overall transfer activity to identify spik