It's hard to say exactly how much return on investment (ROI) you will get from increasing your security. Many restaurant owners are not motivated to make changes unless they can see what the actual gain might be in plain dollars and cents. Through our research, we found some general numbers to help you determine your ROI.
Many security professionals say implementing an advanced POS system has resulted in a nearly 10 percent revenue gain. How? POS systems can improve inventory accuracy and create correct sales tickets. Security cameras tend to add 3 or 4 percent more improvement.
These numbers may not reflect your experience, but you can likely expect a 10 percent boost in revenue by investing in your restaurant security. If you're not sure, you can compare the cost of a new POS and camera system with the savings you could expect to have to gauge whether the investment makes sense for you or not.
Some experts say you'll realize your ROI within a year; others say six months. Your experience will vary.
Top Two Technologies Security Professionals Recommend
Most restaurant security professionals recommend two technologies to help you protect your assets and profits: an advanced 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 capable POS system can help you control loss by tracking sales, inventory and employee hours. Here's how:
Sales tracking: While employees can still create false sales records to scam you, most business owners report a noticeable increase in sales and improved inventory accuracy after purchasing a new POS system. In addition, you can easily run customized sales and inventory reports to identify sales trends, busy hours, high-selling days and so on. Some systems even have reports you can run that specifically flag potential fraud issues, such as a routine excess of voided sales.
Inventory tracking: Keeping your inventory accurate not only helps you with food prep and ordering, but it helps detect employee theft. Many restaurant owners are missing this technology. Instead, they track inventory by other means or even by sight, which is rarely accurate. Good POS systems can track food inventory by ingredient and recipe. Plus, they include technologies that account for waste, loss and spoilage. A POS system can also track vendor information, delivery dates, and bulk or catering orders.
Employee scheduling and time clocks: These technologies greatly improve payroll accuracy. Some systems even support biometric technologies to prevent employees from clocking in for each other. Others capture an image of your employee as they clock in. Schedules can be made available online, and you can send shift changes to your employees via mobile phone.
Popular vendors: Revel Systems, SunrisePOS, NCR, Lavu, Toast, TouchBistro, Squirrel Systems and Lightspeed
Security Camera Systems
Security cameras help deter theft, but they can also help substantially with potential liability or harassment issues as well as training or performance problems. Modern camera systems capture clear video recordings that you can even view on your smartphone.
Here are a couple suggestions for using security cameras to your advantage:
Critical Locations in Your Restaurant
Cameras should be placed by all entrances and exits, over cash registers, throughout the dining room, in the bar, and any place you store expensive inventory. Of course, you cannot put cameras in bathrooms or locker rooms, but anywhere else is allowed.
Rewards for Good Behavior
Make sure your employees know that you review the recordings and can see live feeds on your phone. To keep it from being a negative endeavor, you can reward employees you see performing well on camera.
Popular vendors: Most security camera retailers are resellers. However, they should be able to offer you advice on the best system for your business. Search for security specialists and surveillance camera installers in your area.
Integrated POS & Security Camera Systems
Some security systems integrate with your POS system and offer greater insight and security for your restaurant. For instance, these systems link transaction times with video-recording times, and they include theft-detection technologies.
You no longer have to review hours of video to try to find a specific incident. Using these systems, you can search by sales transaction to find the section in the recording where the incident in question occurs. Many also include behavior-detection features that can be configured to alert you if the software detects a possible issue.
These systems can be purchased together. Some companies offer compatible software that you can connect to your POS and surveillance system to provide these functions.
Popular vendors: Remote Eyes, Axis Communications, Genetec, Axxon, Cisco and 3VR
No-Cost Restaurant Security Practices
Yes, camera and POS systems can be expensive, but there are a few precautions you can take to improve security without spending a lot of money.
Here are a few precautions that security experts recommend:
- When a person leaves your employ, 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.
- Obtain security cameras that can record in the dark.
- Vary the times that you deposit funds at your bank, or hire an armored transport service.
- Record information and photograph expensive equipment and store the information 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.
- Coolers and freezers should be able to be unlocked from the inside and include an alarm device.
- Bathrooms should be checked before closing.
- Use clear garbage bags so employees cannot easily remove items from the restaurant.
- Encourage employees not to bring valuables or large sums of money to work.
Credit Card & Fraud Protection
Credit card scams and fraud issues are still common, despite the implementation of new technologies. Under new liability laws, even merchants can be held liable if your security is not up to date, so due diligence is important.
While you should consult a security specialist for additional assistance, here are some things you can do to increase your 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' cards never leave the table.
- Utilize a cardless tab system such as TabbedOut.
- Limit who processes credit and debit card transactions.
- Consult with a specialist about how you can become and stay PCI compliant.
- Maintain good records and be prepared for a security audit should it occur.
- Never store customers' credit card information.
- Employ powerful passwords that you change often.
- Use high-rated business antivirus software.
Selecting a New Safe
Restaurants, because they typically keep cash on hand, can be easy targets for thieves. Protect cash and valuables with a heavy-duty safe.
When choosing a safe, select one that's as heavy as you can afford and put it in a visible place bolted down. Your first instinct may be to hide it, but experts agree that visibility deters theft. You'll also want to choose a safe with a drop feature so employees can't access the inside.
A safe can be costly, but it is an important investment and should last for years. It is recommended that you hire a locksmith or someone to professionally install your safe.
One common question is which type of lock is best. While many people like the convenience of an electronic lock, a mechanical lock does not need power to operate, and it is electromagnetic pulse (EMP) proof. It's easier to change the combination on 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 electronic lock. This way, you can unlock the mechanical lock should the electronic one fail, but you can also enjoy the convenience of an electronic lock while it is powered.
Safes are rated for security and fire. 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.
Safes are also rated for construction and performance. Construction scores rank from B to G, with G being the best. Performance ratings are a mixture of letters and numbers, the TXTL-60 being 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.
You can purchase a safe through a local company or online. It is not recommended that you purchase a lower-priced, home-use safe for your business. A professional locksmith can help you choose the right safe for your restaurant that satisfies your insurance requirements.
How Employees Steal From Your Restaurant
Many restaurant owners and managers have a difficult time believing that their employees are skimming assets from their restaurants, but it is more common than most would like to believe. Theft could be something as simple as an employee eating a free meal without permission or as nefarious as not recording cash sales and pocketing the cash.
Craig A. Whitfield, author of "Guess Who's Eating Your Profits," wrote that, in many cases, managers just assume a certain amount of loss from employees, while others refuse to believe that even their best employees might be stealing from the business.
While owners and managers shouldn't create a suspicious and hostile work environment, it helps to be aware of how employees might pull profits from the company. Most theft is small, but it adds up over time.
Here are a few ways employees may be diverting profits from your business:
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 that a patron did not pay their tab or food order, and the employee pockets the money.
Tip raising: The employee adds to the tip, often after the patron signs for the transaction. Most patrons don't notice the difference or don't notice until they see their bank statements.
Short pours and watering down drinks: Bartenders have been known to underpour drinks and pocket the difference. Some have even been as bold as to bring in bottles they bought and sell straight from the bottle and take the profit.
These are just a few of the common methods. Implementing a good POS system, tracking inventory accurately, and providing through, ongoing training to employees can squelch employee theft.
How to Handle Employee Theft
So what should you do if you discover a trusted employee has been stealing from you? This can be a difficult situation to handle, depending on your state and local hiring and firing laws. You'll want to make sure you comply with employment requirements to avoid a wrongful termination lawsuit or other issue.
In some states, employment is at will, meaning you can fire an employee for any reason (except an illegal one). You'll want to carefully and thoroughly collect all the evidence you can to prove the theft.
If you don't feel comfortable confronting the employee, invite in a consultant or security expert to help you 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 it in writing.
Loss prevention specialists suggest that you request the employee repay you for the loss as soon as possible. If it is a large amount, you may have to involve the local police. You'll want to consult with your local laws to see at what point you'll need to involve local law enforcement. However you handle the situation, you'll want to strive to maintain your professionalism, regardless of how betrayed and upset you feel.
One preventative measure some restaurant managers adopt is making inventory and cost control part of the employee's job description. For example, you could require that your bar manager be responsible for maintaining an accurate liquor inventory or that your head chef is accountable for managing food and kitchen inventories.
Create clear written expectations, provide training and follow through by checking in with employees about inventory monitoring. If you continue to have inventory losses or sales discrepancies, you can discontinue their employment for performance reasons rather than accusing them of theft.
Decrease Losses by Increasing 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 be hard on employees to deter theft, some security and management professionals recommend a dose of generosity. Employees who feel squeezed to their limits are likely to react in negative ways. In addition, your customers notice when your employees are unhappy, and that can quickly empty your restaurant.
Here are some low-cost ideas to help keep your employees satisfied and less inclined to take from you:
Many owners and managers offer low-cost meal options. However, many restaurant workers cannot afford items off the menu, and this fosters resentment. Many employees might be tempted to steal food, and they might actually be hungry, so feed them. Of course, that doesn't mean giving them free access to as much as they want, but you can create a meal plan that works for everyone.
Free Soda & Coffee
Employees may sneak drinks when you're not looking. Soda and coffee are low-cost perks you can provide to employees while they are on shift.
Random Incentives & Bonuses
Get creative with employee incentives. Some managers watch the video feeds and monetarily reward an employee who shows exceptional service. You could even hire "secret shoppers" to visit your restaurant to test food quality and service. Employees who perform well could earn a reward, such as money or a free high-priced menu item. Some have seen success with team contests, such as a reward to whoever sells the most of a featured menu item. Don't forget to reward your back-of-house workers as well.
Get Your Hands Dirty
Jump in and help out when you can. Not only will the experience help you improve processes, but it demonstrates to your employees that you're a team player and not afraid of a little hard work. You'll get more respect from your employees if you know how to do their jobs and understand what they do on a regular basis.
Create a Nice Break Space
Create a temporary oasis for employees – outside and inside. An indoor and outdoor haven gives your employees a relaxing place to spend their breaks, and for employees who smoke, it gives them a dedicated place, away from customer entrances, where they can enjoy a short break.
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. Seek their input about processes, menu items, specials, events and more. Ask them what equipment improvements might be necessary. They likely have some good 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 can be challenging. 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 submit for time off online or using their smartphones. Using this technology, your employees can better plan around their important life events. In addition, using POS sales data, you can create a better schedule so you're not overstaffed or understaffed.
Advanced Security Options
These are some advanced security options you can implement to keep your restaurant and employees safe:
This technology is becoming increasingly affordable. Some POS systems use biometric information, usually a thumbprint or fingerprint, to grant access or login. Rather than using a PIN or password that can be shared, biometric identification monitors people who log in to the POS system and access the cash drawer, and it can be used to log in employees. Another plus – you don't have to bother with passwords, key fobs or cards.
Forensic Property Marking
This technology is not often used in restaurants, but it can be. It is linked to your security system, and when an alarm is triggered, it projects a light layer of forensic spray onto an intruder. The particles can be seen using ultraviolet light and can be used to identify intruders later.
Employee Image Capturing at Clock-In
Many POS and time-clock systems can be configured to capture an image of your employee as they clock in and out. This way, you know who worked when, and it deters co-workers from clocking in for each other.
Freezer & Refrigerator Monitors
Storing perishable food at the proper temperature can lower the risk of foodborne illness and decrease inventory loss. Installed temperature monitoring systems can alert you by email, text or phone call if your equipment fails. Systems are wireless and simple to install, and they provide audit records for local health inspectors.
By employing simple and affordable security tactics, you can better protect your employees, patrons and assets. Most restaurant owners see an increased profit and ROI 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 not only protects your team members, but it also boosts your profit margin.