6 Ways to Prevent Employee Theft in the Restaurant

According to the US Chamber of Commerce, employee theft accounts for billions of dollars in losses for restaurant owners each year. That’s why it’s so important to make identifying and preventing internal theft a priority in your business plan.

No matter how well you think you know your employees, you need to be aware of how prevalent employee theft is in restaurants. Recognizing the signs is important; having tools in place to prevent theft is even better.

1. Define a company policy.

Make sure your staff know that you will not tolerate dishonesty. Establishing a "zero-tolerance" policy is the first step; this should include theft of time as well as product or cash: things such as taking a long lunch break without approval, using sick leave when not sick, arriving late for a shift, or leaving early without permission. Write and distribute a company policy that outlines exactly what constitutes stealing.

Theft. Theft for us is a fire-able offense, I feel. We put trust in our employees to handle money, and that's one thing we talk about in orientation with them.

- Mary Kay Haas with Pizza Factory in How to Hire, Train & Retain Great Pizzeria Employees

2. Keep a close eye on your POS reports.

Staff who know you’re watching are less likely to steal. Do regular audits, and make sure your employees know you do them. SpeedLine POS, for example, tracks "notable activities"—actions that can indicate theft—and displays a list at the touch of a button. Other reports to review regularly include time-clock reports and those that list employee payouts and discounts.

3. Monitor employee access.

You should always be aware of which employees have keys or pass codes. These are important responsibilities, and your staff should be made accountable if an incident occurs. No employee should be responsible for more than one security measure. For instance, it’s good practice to keep recording and processing cash transactions as separate duties.

4. Create a positive work environment.

A positive work environment has been shown to deter employee fraud and theft. Open lines of communication, employee recognition, and fair employment practices help staff feel part of the business. And if staff are educated about the high cost of theft and potential impact on their jobs and pay, they will be much less likely to put up with a thieving coworker.

5. Keep your door open.

Make it easy for staff to report employee theft anonymously. Keep staff feedback confidential, but if you have to dismiss an employee for stealing, make sure the rest of your staff understands what happened and why.

6. Install security cameras.

Explain to staff that cameras help safeguard the business and the whole team from theft (whether from outside or inside). They also provide positive proof for an honest employee who’s caught up in a dispute over a shortage at a till or an irate customer. Read more about how security cameras can prevent theft in the article Increasing Pizzeria Profitability with Integrated Video & POS Data. 

7. Regularly count your inventory. 

Do you know how much inventory you have on hand at any given time? Would you notice if some "walked" off the shelves? By regularly counting critical inventory like cheese and meats, you can ensure you aren't over-portioning and that your employees are helping themselves.

The critical items, that's a critical item because that's the money. That's why we're [counting] it. Are you spending too much money? [We also count] items that are easier to count, so, say, like pizza boxes, because then the employees know, "Oh, yeah, they do know exactly how many pizzas are going out the door." Do I? No, but I have a better idea than if I didn't.

But they're easier for them to count, and I think it makes an impression on them that we're counting every single thing that goes out the door, essentially. So, I have a friend that does more criticals than I do. He goes down the entire line every night, and he has them put everything from the make line back in the walk-in. And I think that's more of an impression thing for the employees, too, I believe.

- Greg Thomas, owner of Mama Roni's Pizza in Doing More with Less: Dealing with a Labor Shortage

Considering that 95% of business owners at some time fall victim to internal theft, how likely is it that you’re exempt? By taking proactive steps to prevent internal theft, you’re investing in the longevity of your business. What steps have you taken to prevent employee theft?