Restaurant Security: A Guide to Protecting Your Business From Theft and Fraud

The importance of restaurant security

Today’s restaurants face a range of digital and physical security threats, making a comprehensive security plan more crucial than ever. “An effective security plan prevents loss of funds, safeguards customer information and provides a secure environment,” said Andrea Abbondanza, CEO of SEO for Restaurants. “Without it, a restaurant will face disruption of business, fines by law and loss of reputation.”

Carmela Hughley, senior vice president of marketing insights and innovations at Rita’s Italian Ice, added that a strong security strategy safeguards your brand reputation, customer trust and overall business continuity, which is especially important with the industry’s growing reliance on digital transactions and online ordering.

Whether you’re looking to deter theft and other potential crimes, improve employee safety or protect your restaurant’s assets, securing your restaurant is an investment that can pay off in the long run.

Restaurant security checklist

Take these steps to keep your restaurant as secure as possible:

1. Invest in technology.
2. Adopt credit card and fraud protection.
3. Select a secure safe.
4. Manage employee theft.
5. Increase employee satisfaction.

1. Invest in technology.

Most restaurant security professionals recommend two key technologies to help you protect your assets and profits: an advanced point-of-sale (POS) system and a security camera system. Alarm and sensor systems can further boost security, providing immediate alerts in case of an emergency.

If you’re using multiple systems, make sure all of them integrate seamlessly for optimal protection. 

“While each function may operate as a separate application, the monitoring, reporting and alerting should be centralized into a single, unified platform,” said Greg Parcell, manager of sales engineering for North America at Johnson Controls Security Products. “An integrated approach that combines access control, video surveillance and intrusion detection … not only enhances security but also streamlines operations, ensuring long-term protection and peace of mind.”

Restaurant POS systems

A high-quality POS system can control loss by tracking sales, inventory and employee hours.

Here are some of the major benefits of POS systems for restaurants:

• Sales tracking: You can easily use a POS solution to run customized sales and leverage inventory reports to identify sales trends, busy hours, high-selling days and other information to inform your security measures. Some systems even provide reports that flag potential fraud issues, such as a routine excess of voided sales.
• Inventory tracking: In addition to helping you with food prep and ordering, an accurate inventory record can aid you in detecting employee theft. A good POS system can automate the process and track food inventory by ingredient and recipe; account for waste, loss and spoilage; and manage vendor information, delivery dates and bulk or catering orders. [Related article: How to Cash in on Your Excess Inventory]
  
• Employee scheduling and time clocks: POS systems can improve payroll accuracy. Some systems even support biometric authentication technologies to prevent employees from clocking in for each other and stealing time. Others capture an image of your employee as they clock in. You can also post schedules online and send shift changes to your team via mobile phone.

Learn more about some of the top POS systems for restaurants in our review of TouchBistro and our Toast review. 

Security camera systems

Security cameras help to deter theft, and they also aid with potential liability or harassment issues as well as training or performance problems. Modern security systems include innovative features and tools, and their clear video footage is viewable on your smartphone.

“Increasingly, restaurant owners are moving those cameras to a cloud-based video management system to better address security threats and improve operations,” noted Hans Kahler, chief operating officer at Eagle Eye Networks. “One popular feature of cloud-based video management systems is the ability to integrate video with POS data, which enables owners and managers to deter and identify employee theft by linking transaction data with real-time video footage.”

Here are some best practices for using security cameras at your food establishment:

• Monitor critical locations in your restaurant. Place cameras by all entrances and exits, over cash registers, throughout the dining room, in the bar and anywhere you store expensive inventory. Of course, you cannot install cameras in bathrooms or locker rooms, but anywhere else is allowed by law.
• Ensure your employees know you’re using the cameras. Make sure your employees know you review the security footage regularly. “The staff knows when they have owners that don’t watch the cameras unless there is a specific event,” explained Izzy Kharasch, president of Hospitality Works. “The most important part [of] having cameras is that the owner/manager can prove to employees what they have seen.”
• Reward good behavior. Don’t make monitoring only about punishing infractions. Reward employees you see performing well on camera, too.
• Maintain your cameras. “Restaurants install cameras but don’t maintain them,” Abbondanza said. “Ongoing system checks and cloud storage ensure there are recordings available when necessary, and that makes the security even tighter.”

Integrated POS and security camera systems

Some security systems can integrate with POS systems, offering greater insight and security for your restaurant. For instance, your POS program may be able to link transaction times with video recording times, and the integration can include theft-detection technologies.

With this setup, you no longer have to review hours of video to find a specific incident. Instead, you can search by sales transaction to find the section of the recording where the incident in question occurred. Many systems also include behavior-detection features that can alert you if the software identifies a possible issue.

To simplify the integration process, POS and security camera systems can be purchased together. Some companies offer compatible software that connects to your POS and surveillance systems to provide these functions.

Advanced security options

One of the most common security mistakes restaurant owners make is prioritizing convenience over security, according to Jason Profitt, vice president of technology at Piada Italian Street Food. This includes using shared logins for POS systems and other sensitive applications. 

“While this approach simplifies access management, it also creates significant vulnerabilities,” Profitt said. “If a disgruntled or dishonest employee misuses these credentials, it can lead to financial loss, data breaches or reputational damage.”

To avoid shared logins and other security issues, here are some advanced security options you can implement to keep your restaurant and employees safe:

• Multifactor authentication (MFA). MFA — which requires users to provide two or more verification factors, like a mobile login code in addition to a password — is one of the most effective ways to prevent unauthorized account access. “This simple-yet-powerful tool ensures that even if login credentials are compromised, access to critical systems can still be prevented,” Profitt said.
• Biometrics: This technology is increasingly affordable. Some POS systems use biometric information, usually a fingerprint, to grant access to the premises or software. Rather than using a PIN or password that can be shared, biometric identification monitors people who log in to your POS system and access the cash drawer. Employees can also use biometrics to log in for time tracking. Another plus is that you don’t have to bother with passwords, key fobs or cards.
• Forensic property marking: Although this technology is not often used in restaurants, it can be. It links to your security system, and when an alarm is triggered, it sprays a forensic chemical onto the area. The sprayed particles are visible only under ultraviolet light and can be used to identify intruders later.
• Employee image capture at clock-in: Many POS and time clock systems capture images of employees as they clock in and out. This lets you know who worked when and deters co-workers from clocking in for each other.
• Freezer and refrigerator monitors: Storing perishable food at the proper temperature lowers the risk of foodborne illness and decreases inventory loss. Installed temperature-monitoring systems can alert you by email, text or phone if your equipment fails or if someone tampered with the temperature settings. Such systems are wireless and simple to install, and they provide audit records for local health inspectors.

You can improve security for your employees, patrons and assets through simple and affordable security tactics like these. Most restaurant owners see an increased profit and return on investment by making a few changes. If your restaurant is barely holding on, your profits might be walking out the door without your knowledge. Implementing good security practices protects your team members and boosts your profit margin.

2. Adopt credit card and fraud protection.

Credit card scams and fraud issues are still common today despite advancements in payment technology. Under current liability laws, merchants can be held liable if their payment security is not up to date, so due diligence is essential. 

“Attackers have been successfully eavesdropping on transactions and either stealing data or redirecting financial transactions to their portal,” said Yashin Manraj, CEO of Pvotal Technologies. “Restaurants should avoid using popular software or hardware without at least one internal audit of potential weaknesses, issues or vulnerabilities.”

Although you should consult a security specialist for custom assistance, here are some steps you can take to increase your restaurant’s financial security:

• Employ a top-of-the-line POS system with secure credit card processing.
• Upgrade card readers to EMV chip-and-PIN card readers.
• Lock down Wi-Fi access, and install a powerful firewall.
• Provide table-side processing so customers’ credit cards never leave their table.
• Utilize a cardless tab system, such as TabbedOut.
• Limit who processes credit and debit card transactions.
• Consult a specialist on how you can become and stay compliant with the Payment Card Industry Data Security Standard.
• Maintain good records, and be prepared for a security audit.
• Never store customers’ credit card information.
• Employ strong passwords, and change them often.
• Use highly rated business antivirus software.

3. Select a secure safe.

Restaurants can be an easy target for thieves because they typically have cash on hand. “Keeping enormous amounts of money on the premises without safe, secure safes or depositing it frequently makes restaurants highly vulnerable to robbery,” Abbondanza said.

In addition to making frequent deposits and offering cashless purchase options, you should protect your business’s cash and valuables with a heavy-duty safe. Here are a few important factors to consider before you buy one:

• Weight and features: Select a safe that’s as heavy as you can afford, and make sure it has a drop feature so employees can’t access the inside. 
• Where you’ll store the safe: Hire a locksmith or other security professional to install the safe and bolt it down in a visible place. Your first instinct may be to hide it, but experts agree that visibility deters theft. 
• Temperature and usage rating: You should purchase a highly rated, business-use safe that can maintain a temperature below 350 degrees Fahrenheit for up to four hours when exposed to high temperatures. 
• Lock type: Consider a safe with an electronic lock with a mechanical backup in case the power fails.

4. Manage employee theft.

Many restaurant owners and managers have difficulty believing their employees are skimming assets from their restaurants, but it’s more common than you’d think. “Stealing cash is certainly an issue,” Kharasch said. “But so is giving away cocktails [or] food, stealing food from the kitchen, and stealing time by clocking in and then sitting on the clock.”

While owners and managers shouldn’t create a suspicious and hostile work environment, it helps to know the ways employees might pull profits from the company. Most theft is minor, but it adds up over time.

Here are a few ways employees may be diverting profits from your restaurant:

• Short-ringing: An employee takes cash for a high-priced item but enters it into the POS system as a lower-priced item and pockets the difference.
• Food theft: An employee eats or takes home food or gives free food items and drinks to friends. Another common tactic is overpouring drinks to encourage higher tips.
• Voided transactions: Either during the day or at the end of the night, an employee voids out a few transactions and pockets the cash for those sales.
• Falsely reported dine and dashes: An employee falsely reports that a patron didn’t pay their tab or food order and secretly pockets the money.
• Tip raising: The employee adds to the tip, often after the patron signs for the transaction. Most customers don’t notice the difference until they see their bank statements.
• Short pours and watered-down drinks: Bartenders have been known to underpour drinks and pocket the difference. Some even bring in their own bottles, sell straight from the bottle and take the profit.

By implementing a sound POS system, tracking inventory accurately and providing ongoing employee training, you can help prevent such misconduct. One preventive measure is to make inventory and cost control part of employee duties. For example, you could require that your bar manager be responsible for maintaining an accurate liquor inventory or that your head chef be accountable for food and kitchen inventories.

If you suspect employee theft, take the following steps:

• Communicate expectations. Create clear written expectations, provide training and check in with employees about inventory monitoring. If you continue to have inventory losses or sales discrepancies when a particular worker is on duty, you can discontinue their employment for performance reasons rather than accusing them of theft.
• Take legal considerations, and gather evidence. Make sure you comply with any employment requirements in your area to avoid a wrongful-termination lawsuit or other issues. Collect all the evidence you can to prove the theft so you’re legally protected.
• Get a consultant. If you don’t feel comfortable confronting an employee you suspect of theft, invite a consultant or security expert to assist with the conversation. It’s always a good idea to have another individual present in these types of conversations. Ask the employee to explain the discrepancies, and have them put their statement in writing.
• Request repayment immediately. Loss prevention specialists suggest that you request the employee repay you for the loss as soon as possible. If it’s a large amount, you may have to involve the police. Consult local laws to see whether you’ll need to involve law enforcement. Even so, maintain your professionalism, regardless of how betrayed and upset you feel.

5. Increase employee satisfaction.

Employee theft in restaurants is higher than in other industries. There are many reasons for this: low wages, “us vs. them” attitudes, simple opportunity, a high volume of cash transactions and more.

While some owners and managers may be tempted to act harshly to deter theft, some security and management professionals recommend a dose of generosity instead. Employees who feel squeezed to their limits are likely to react in negative ways. In addition, customers notice when employees are unhappy, which can quickly empty your restaurant. By contrast, an environment that fosters employee satisfaction can keep staffers and diners content.

Here are some low-cost ideas to keep your restaurant employees satisfied and less inclined to take from you:

• Feed them. Many owners and managers offer employees in-house meal options. However, restaurant workers may not be able to afford items on the menu, which can lead to resentment. Workers may be tempted to steal food, especially because they might struggle with food insecurity, so feed them during shifts. Of course, that doesn’t mean giving them unlimited access to meals, but you can create a meal plan that meets their needs without hurting your bottom line. You can also offer free drinks, like soda and coffee, while employees are working, as a low-cost perk.
• Offer random incentives and bonuses. Be creative with employee incentives. Managers can watch security camera feeds and monetarily reward employees who show exceptional service. You could hire “secret shoppers” to visit your restaurant to test the food quality and service. Employees who perform well could earn a reward, such as a cash bonus or a free high-priced menu item. Hold team contests, such as a reward for whoever sells the highest number of featured menu items, but don’t forget to reward your back-of-house workers as well.
• Get your hands dirty. Jump in and offer your hands-on assistance when you can. Not only will your firsthand experience help you see where processes could be improved, but such efforts also demonstrate to your employees that you’re a team player who isn’t afraid of a little hard work. You’ll get more respect from your staff if you know how to do their jobs and understand what they do on a regular basis.
• Create a nice break space. Set up a private oasis for employees. Indoor and outdoor havens give your employees a relaxing place to spend their breaks.
• Seek input from staff. Employees who feel you’re attentive to their concerns and are serious about making improvements are more motivated to care about your business. Encourage their input about processes, menu items, specials, events and more. Ask them what equipment improvements might be necessary. They likely have some excellent ideas that can easily be implemented.
• Strive for work-life balance. Restaurant hours can be long, making it hard for people to manage their personal affairs. With a capable online scheduling system — a feature included in several POS systems and employee time tracking software platforms — you can allow employees to trade shifts or request time off online or via their smartphones. This technology helps your employees plan their shifts around important life events. 

Additional ways to keep your restaurant secure at little or no cost

Yes, cameras and POS systems can be expensive, but you can take a few precautions to improve your restaurant’s security without spending much money.

Here are some security strategies experts recommend:

• Regularly change the alarm and POS passwords and codes.
• Clear entrance areas of foliage that someone could hide behind.
• Keep lights mounted high and bulbs out of reach so intruders cannot tamper with lights.
• Vary the times you deposit funds at your bank, or hire an armored transport service for secure transfers.
• Record information, and photograph expensive equipment. Store the data offsite.
• Create an emergency preparedness plan, and keep your first-aid kit stocked.
• Keep parking lots well lit, and have employees leave the building using the buddy system.
• Create a no-theft honesty policy that your employees sign when hired.
• Verify the references of potential hires.
• Check the bathrooms before you close for the day.
• Use clear garbage bags so employees cannot easily conceal items taken from the restaurant.
• Discourage employees from bringing valuables or large sums of money to work.

One of the best ways to increase your restaurant’s security is to improve employee awareness — after all, they’re the ones on the front lines handling customer transactions. Hughley recommended that businesses make security training a regular part of staff onboarding and continued education.

“Employees should be educated on recognizing security risks, handling sensitive customer information and following safe cash management practices,” Hughley said. “Conducting regular security drills, enforcing strict policies on key access and technology use, and fostering a culture where employees feel comfortable reporting suspicious activity can enhance overall security.”

Danielle Fallon-O’Leary and Skye Schooley contributed to this article.