How to combat restaurant employee scams and theft using your restaurant POS

The National Restaurant Association estimates that internal employee theft is responsible for 75 percent of inventory shortages and about four percent of restaurant sales. And the key to stopping theft is understanding the behavior of your employees and determining how it’s happening and then focusing on the most important areas to deter or prevent theft from occurring.

To help, we’re tapping into a literary resource How to Burn Down the House: The Infamous Waiter and Bartender’s Scam Bible. Published in 2004, it was written by two Bourbon Street waiters and contains descriptions of every scam in the restaurant business. In this blog post, we’ll take some of the common scams covered in the book and give you tips on how to combat against them using your restaurant point-of-sale system.

The Buffet Scam: Throughout their shift, a waiter uses the same check over and over for different guests who pay with cash. 

Combatting against this scam:

• Make sure you do NOT give your servers the ability to transfer checks in your restaurant POS. With no transferring ability, the tab cannot be transferred to another server or to tables in an empty section.
• Set your restaurant point-of-sale system so that table numbers can only be used one at a time. If the server has table 101 open with a tab, they cannot open a second tab with the same table number.
• Assign table sections for each server. If the server is only responsible for 3 tables per shift, assign only the ability to access those three tables and no others.
• Use the floor plan view in your POS. For example, in Aloha the manager has the ability to visually see server table sections with the table color changing triggered by predefined time intervals. Not only can the manager see table times, he or she also has visibility of the last time an item was placed on the table, the server ID and how long the tab has been open.

Follow all of these procedures and your servers won’t be able to run the scam of using the same tab for multiple guests.

The Bastard's Scam: The old alleging that guests have pulled a “walk out” as an excuse to have the tab voided by the manager and pocket the money—this only works when cash is the form of tender.

Combatting against this scam:

• Managers should be trained to never void an item off a check once the menu item or product is created. The correct process would be to “comp” the item under the appropriate reason code. A void should only be completed if the product hasn’t been created. Voids generally don’t affect inventory. An example of a valid void would be when a waiter rings in a menu item incorrectly, tells the kitchen not to make the menu item and that item isn’t prepared. 
• The manager should void this item under a created reason code such as “server over-ring.” Using your POS, you should be able to create specific reasons for voided items. In addition, there should be a reason code that forces every manager to select the appropriate code when performing a void. This way the manager must accurately indicate why he/she is voiding an item or ticket, and corporate management can understand and correct the problems appropriately. If the item has been prepared and needs to be removed from the check, the manager should perform a comp. An item that is comped should be evaluated to see if they need to reduce inventory for control purposes. Examples of a manager comp could be defined as “customer dissatisfaction with item” or “overcooked.” Corporate operations can then review manager comps by reason code to address situations or comp percentages that are not acceptable.
• Set up server performance measures in your restaurant point-of-sale. Look for technology vendors that provide the ability for management to monitor server performance through performance measures. This allows the tracking of sales targets and comparisons against objectives of each measure.

Suggestive Stealing Scam: The premise of this scam is to influence the guest by suggestively selling certain items on the menu to use the same tab repeatedly. The core of this scam means the server is leading the guest to select items from the menu that the server wants on the check.

Combatting against this scam:

• Prevent checks from being closed in your POS without the appropriate items. If you feel like your staff may be passing checks with commonly ordered items such as beverages and passing them off to multiple guests, make sure your restaurant POS is enabled to prevent checks from being closed without addressing those common items—so your staff would have to enter an item such as a beverage or “no beverage” on every check. Then they wouldn’t be able to close a check without indicating whether, for example, there is or isn’t a beverage.
• Visually spot check tables and review corresponding checks for accurate items, including order times. Look for technology vendors that give you the capability to see and review any check from your mobile phone or from an FOH terminal. As a manager, you can then make sure that appropriate beverages or any items that the waiter gets are on the actual check. You can also verify that the items have been rung into the system in an appropriate order time. For example, if it’s 5:00 p.m. and beverages were rung in at 11:00 a.m., if the guests at that table weren’t there all afternoon, these items are likely suspect.
• Add a message to your guest checks for a complimentary item if their receipt time and date doesn’t match the time that they’ve been dining. Many establishments post signs such as “if you do not receive a receipt your meal is on us.” This is done to make sure that staff are ringing in items through the restaurant POS system. The same philosophy could be used on a guest receipt indicating for them to make sure the time and date of receipt is accurate. This will deter staff from trying to attempt to pass an older or wrongly dated receipt to a new customer.

Related: How pay-at-the-table really pays off

Leftovers Scam: In this scam, the server shows a food or item order that the customer didn’t touch or hardly ate to a manager to try and get him to “void” the item off the check—problem is, the server has already presented the check and received a cash payment from the customer. And if the food or item order is voided on the POS, the server is then able to pocket the value of the voided menu item.

Combatting against this scam:

• Managers should never “void” a prepared menu item. Managers should be trained to never void an item off a check once the menu item or product is created. The correct process would be to “comp” the item under the appropriate reason code.
• Managers should perform a table visit on every dissatisfied customer order. If staff tells a manager that a customer is dissatisfied with what they have ordered, it should be company policy for the manager to make a table visit to the customer to understand why the customer is dissatisfied. That way the manager can understand the customer’s compliant so not only are you protecting against theft, you’re improving customer service, too. For example, the manager might be able to recook or adjust the order without taking the item off the check. If the manager must remove the item from the check, he or she can appropriately add the reason code to the comp allowing corporate management to monitor customer complaints or service issues.

Evil Incorporated Scam: In this scam, the staff teams up to steal by transferring items to each other that are commonly ordered by your customers and reprinting checks. An example of a common item(s) that is used in this scam is beverages. A typical check will have one beverage per customer on it. Server One can order a beverage on the system, print the check, present the check to the customer and receive payment. Prior to closing the check, Server One creates a separate check by moving the beverage off the current check. Then Server One transfers the new check with beverage to Server Two. Server One closes the check minus the beverage and pockets the amount the beverages cost. This process only works with cash payments, because the guest doesn’t have to sign a credit card voucher with an appropriate total including the beverage.

Combatting against this scam:

• Do not allow your staff to transfer tickets from server to server without manager approval. Look for a restaurant POS system that prevents server-to-server transfers. This eliminates staff from working together as a team to steal from the establishment. A good and routinely used company policy would be to allow transferring items from one server to another only with a manager approval.

Friendly Delivery Scam: In this scam, the service staff has access to your inventory or kitchen supplies and steals them to use for personal use or sells them outside of the workplace.

Combatting against this scam:

• Lock down your inventory. Most restaurants will have walk-in storage areas and freezer containers locked with limited access only by management. This would be the most effective way to keep products from “walking out the door.”
• Leverage inventory management systems to track your inventory. Using your POS, enter your opening counts, closing counts, waste, etc. A good system can automatically deduct product as it has been sold giving you an on-hand count at the end of the service period. Management should do a closing count and calculate for any discrepancies.

Preventing employee theft completely isn’t likely, but those two Bourbon Street waiters really did you a favor when they wrote How to Burn Down the House: The Infamous Waiter and Bartender’s Scam Bible. Use these guidelines and you can gain more control over employee scams.