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

Updated Jan 11, 2024

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Sean Peek
Senior Analyst & Expert on Business Ownership at business.com
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Investing in security measures to create a safe atmosphere for both your customers and employees should be a top priority for your restaurant. Not only is it the right thing to do, but investing in restaurant security can save you money in the long term. While there are many ways you can protect your restaurant, some of the best solutions are technology like POS systems and security cameras. Our restaurant security checklist breaks down exactly what you should do.

The importance of restaurant security

Regardless of the type of food establishment you run, security features deter theft and other potential crimes, both during and after business hours. Having greater security also gives your restaurant a chance to respond to any problems, such as stealing, threats or customers who dine and dash.

restaurant credit card machine and security camera

It’s crucial for your employees to feel safe going to work and for customers to feel secure while dining at your eatery. Enhanced security helps make this possible. Even straightforward solutions, such as installing an alarm or putting in better lighting, can go a long way in deterring and responding to any safety threats.

Additionally, a security guard can deter violent altercations and video cameras can keep an eye on your restaurant’s assets. Whatever your budget and preferences, 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 technologies to help you protect your assets and profits: an advanced point-of-sale (POS) system and a security camera system. If you can afford it, a POS system that integrates with your camera system is ideal.

Restaurant POS systems

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

TipBottom line

If you’re in the market for a modern, secure POS system, check out our recommendations for the best restaurant POS systems and the best overall POS systems for your business.

  • Sales tracking: Most business owners report a noticeable increase in sales and improved inventory accuracy after purchasing a new POS system. In addition, you can easily use a POS solution to run customized sales and inventory reports to identify sales trends, busy hours, high-selling days and so on. These insights can inform your security measures. Some systems even provide reports that flag potential fraud issues, such as a routine excess of voided sales.
  • Inventory tracking: An accurate inventory record not only helps you with food prep and ordering but it can also help detect employee theft. Many restaurant owners still track inventory by manual calculations or even by sight, which is rarely accurate. Meanwhile, 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 not only help deter theft but can also help substantially 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.

Here are a couple of ways to use security cameras to your advantage at your food establishment:

  • Oversee 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.
  • Monitor good behavior: Make sure your employees know you review the security camera recordings and can see live feeds on your phone, but don’t make this only about punishing infractions. Reward employees you see performing well on camera, too.
FYIDid you know

The cost of a security system depends on the type of hardware you choose and how much ongoing monitoring you need.

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 detects a possible issue.

To make the integration process easier, 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

Empty restaurant tables

These are some advanced security options you can implement to keep your restaurant and employees safe.

  • Biometrics: This technology is increasingly affordable. Some POS systems use biometric information, usually a fingerprint, to grant access to the premises or log in to 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. Biometrics can also be used to log in employees for time tracking. Another plus: 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 only visible 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 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 better protect 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 new liability laws, merchants can be held liable if their payment security is not up to date, so due diligence is essential.

While you should consult a security specialist for custom assistance, here are some things you can do 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 tableside 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 Payment Card Industry-compliant.
  • Maintain good records and be prepared for a security audit.
  • Never store customers’ credit card information.
  • Employ strong passwords that you change often.
  • Use highly rated business antivirus software.
Did You Know?Did you know

Our cybersecurity plan for small business owners provides information on password management, Wi-Fi network security and more.

3. Select a secure safe.

Restaurants can be easy targets for thieves because such establishments typically have cash on hand. Protect your business’s cash and valuables with a heavy-duty safe.

You’ll want to 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. 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. 

A safe can be costly but it’s an important investment and should last for years. Keep these tips in mind as you shop around.

Choose the best lock for your needs.

One common question restaurant owners have is which type of lock to use on their safe. While many people like the convenience of an electronic lock, a mechanical lock doesn’t need power to operate and it’s impervious to electromagnetic pulses. Meanwhile, it’s easier to change the combination of electronic locks. Mechanical locks have to be changed by a professional locksmith.

You can opt for a redundant lock safe that includes a mechanical and an electronic lock. That way, you can use the mechanical lock if the electronic one fails, but you can also enjoy the convenience of an electronic lock as long as it’s powered.

Consider temperature requirements.

Safes are rated for security, fire, construction and performance. You may be able to lower your insurance rates by purchasing a higher-rated safe. Ask your insurance company what its safe-rating requirements are.

Construction scores for safes rank from B to G, with G being the best. Performance ratings are a mixture of letters and numbers. For example, the TXTL-60 is among the highest ratings.

A good business safe can maintain a temperature under 350 degrees Fahrenheit for four hours when exposed to high temperatures, often up to 2,000 F. Purchase a safe with the highest temperature rating you can afford in case of fire.

Make sure your safe is rated for business use — don’t try to buy a lower-priced, home-use safe to save money. A professional locksmith can help you choose the right safe for your restaurant at an expense that justifies the security the safe provides. 

Bottom LineBottom line

You should purchase a high-rated safe that can maintain a temperature below 350 degrees Fahrenheit for up to four hours when exposed to high temperatures.

4. Manage employee theft.

various restaurant employees

Many security measures are designed to keep third parties out. But what if the threats are coming from within your company?

How employees steal from your restaurant

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. Theft could be as deceptively simple as an employee eating a free meal without permission or as nefarious as not recording cash sales and pocketing the money.

Managers assume a certain amount of loss from employees in many cases. Some, however, refuse to believe that even their best employees might be stealing from them. That attitude leaves your business susceptible to losses.

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 entice 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 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.

Implementing a sound POS system, tracking inventory accurately and providing ongoing employee training can help prevent such misconduct.

How to handle employee theft

What should you do if you discover a trusted employee has been stealing from you and your restaurant? This can be tricky to handle, depending on your state and local hiring and firing laws. 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.

Did You Know?Did you know

In most states, employment is at will, meaning you can fire an employee for any reason (except an illegal one, of course). Read our related article to learn what constitutes wrongful termination.

We also recommend taking the following steps if you suspect employee theft — and to stop it from occurring in the first place:

  • 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 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.
  • Include loss prevention in employee job responsibilities: 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.
  • 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.

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, addiction problems 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. Instead, fostering employee satisfaction can keep both 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, many restaurant workers cannot 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.
  • Provide free soda and coffee: Employees may sneak drinks when you’re not looking. Soda and coffee are low-cost perks you can provide to employees while they’re working.
  • 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 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 first-hand 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 — outside and inside. Indoor and outdoor havens give your employees a relaxing place to spend their breaks.
  • Seek input from staff members: 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 and scheduling shifts is sometimes a challenge. With a capable online scheduling system, a feature of several POS systems and employee time tracking software, you can allow employees to trade shifts or request time off online or via their smartphones. This technology lets your employees better plan around their important life events. In addition, using POS sales data, you can create a more efficient schedule so you’re not overstaffed or understaffed.
Bottom LineBottom line

Give employees incentives, freebies and a better work-life balance to keep them satisfied and steer them away from theft or misconduct in your restaurant.

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 a few 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 off-site.
  • 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.
  • Check the references of potential hires.
  • Check bathrooms before closing for the day.
  • Use clear garbage bags so employees cannot conceal items taken from the restaurant easily.
  • Encourage employees not to bring valuables or large sums of money to work.

Skye Schooley contributed to this article.

Sean Peek
Senior Analyst & Expert on Business Ownership at business.com
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.
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