Preventing Employee Theft in a Restaurant

Establish consequences for fraud and make your workers aware of them

The cost of employee theft in a restaurant can go beyond the potentially devastating financial impact from loss of money and material goods. Employee theft in a restaurant includes theft of food, money, alcohol, time, equipment, and retail items. Restaurateurs should focus on education, awareness, and surveillance to secure their restaurant’s assets. Basic employee theft prevention involves having procedures in place for hiring, training, and supervision of employees and managers.

What You Need

  • Employee background checks
  • Access and authorization control
  • Inventory tracking
  • Assets tracking
  • Surveillance technology

Step 1    Hire employees for your restaurant after conducting background checks. Restaurant employee background checks are vital to hiring honest employees and maintaining workforce integrity. Background checks include checks on criminal history, civil history, driver’s license violations, past employment, and references. To complete an employee background check, you can hire a company that specializes in employee screenings and you may contact previous employers.

Step 2    Restrict access to physical and financial assets and information, as well as accounting systems. Develop and implement policies to determine how financial transactions are initiated, authorized, recorded, and reviewed. Internal controls can reduce and prevent employee fraud.

Step 3    Provide awareness to your workers about your employee theft policy. Employee awareness programs aim to ensure that all employees understand and appreciate not only the value of the company's assets but also the consequences in case these assets are compromised.

Step 4    Track inventory by closely monitoring orders, usage, and waste. If the kitchen staff knows they are accountable for the food inventory, they will be careful to keep track of it. Managers should be in control of monitoring and tracking inventory information every day. Compare your book inventory with your stock on hand at least once each month.

Step 5    Avoid allowing the finances of your restaurant to be handled and controlled by a single individual. Conduct surprise audits for employee theft prevention. Surprise audits will reduce the risk of employee theft, because it will limit theft opportunity. Make sure all checks, purchase orders, and invoices are numbered consecutively and check for missing documents regularly.

Step 6    Integrate technology to deter employees from stealing and to catch employees who are stealing. One of the most effective technologies is the use of surveillance cameras. An employee will be reluctant to steal if there is always someone monitoring his or her actions. A new technology that is being widely implemented by restaurants is point-of-sale exception reporting combined with digital video.
Tips and Warnings

  • Monitor employees who have keys to your restaurant, codes to the safe or access to cash drawers.
  • Create a positive work environment that can prevent employee fraud.
  • Write and distribute an employee theft policy that outlines exactly what constitutes stealing and send a message to your employees that stealing will not be tolerated.
  • Check the official expense account of your employees to trace possibility of over billing.
  • Ensure that accusations are investigated as best as you can before you have a serious meeting with the employee. You do not want to wrongly accuse one of your employees.
  • Avoid using a signature stamp and sign every payroll check personally.
  • Limit the amount of cash in any register and use a drop-safe to securely store built-up cash.