Employee Theft Prevention in Restaurants, Hotels, and Bars

Employee theft is the silent profit killer that plays a major role in the financial life or death of your restaurant, cafe, hotel, or bar. How can I learn the causes and cures of employee theft and prevent loss in my business? How do I prevent employee theft in my restaurant, hotel, or bar? What loss prevention strategy, when implemented, will keep my employees honest? Employee Theft is the Silent Profit Killer I answer questions from my co-host, Ken Burgin, from the Profitable Hospitality podcast located down under in Sydney, Australia. Employee Theft Employee Theft from a restaurant, hotel, or bar is a term that is used when an employee steals cash, food, ingredients, or supplies while working on the job. In the eyes of the law, employee theft is just theft…the elements of the crime are identical. To commit theft, the employee must intend to permanently deprive their employer of the value of the item stolen. Employee theft is an insidious crime because the employer is paying a wage and benefits to the thief on top of paying for the cost of their dishonesty. Studies have shown that dishonest employees do a lot of damage because they were trusted, had daily access, and had insider know-how to circumvent accountability systems. This breach of trust makes employee theft more like the crime of embezzlement than shoplifting. Employee Theft Profile There is no real physical profile for a dishonest employee. Dishonest employees come in all shapes, sizes, ages, sexes, ethnic backgrounds, religions, levels of education, and economic statuses. You cannot determine who is likely to steal based on their demographic status alone. However, an employer can make reasonable assessments based on their past and present conduct, integrity, and judgment. Some restaurant and bar employees have stolen from every prior employer and will certainly steal from you if hired. It’s a risk-reward decision for them. The reward is the amount they can steal without getting caught. Most employee theft suspects I’ve encountered never thought they would be never be caught. They thought they were too smart for the boss because they got away with it for months or years. This was the reason most often given, and why they felt the risk was worth the reward. I've found that employers with high-theft losses were not sending a clear message that accountability systems were in place to detect employee theft. The deterrence for borderline-dishonest employees includes getting caught, fired, arrested, convicted, jailed, on probation, and paying restitution. Help them to realize that a criminal record and bad job references will have a compounding effect that will follow them for years. But because of the nature of a cash business, borderline honest employees have to resist ever-present opportunities to steal cash, product, or merchandise…all that some need is a nudge from a supervisor to elevate their desire and motivation to steal from you. Some employees would never steal from you under any circumstances. What keeps these employees honest is their moral character, loyalty, respect for the law and their employer, and the desire to be viewed as trustworthy. You have little control over these positive attributes other than recognizing it in the people and hiring more like them. Accountability is Key to Prevent Employee Theft You are the architect of your employee theft loss prevention plan. You need a clearly defined accountability structure for employees and managers on every shift. Your best employees and managers will like the structure and tangible goals to achieve. Maintaining high standards allows good employees to excel and be recognized for their accomplishments Studies support this by proving that employee theft losses are significantly less in businesses with high accountability, high employee satisfaction, and reduced employee turnover.