Ensuring the integrity of your bar’s operations is essential to running a successful business, and the unfortunate reality is that employee theft can be a significant threat. This guide will help you understand how to catch a bartender stealing and implement effective loss-prevention strategies.
Key Takeaways
- Employee theft is a significant challenge in the bar industry, but it can be significantly reduced with effective loss-prevention strategies.
- Leveraging technology, such as POS systems and security cameras, can greatly enhance your loss prevention efforts.
- Creating a comprehensive loss prevention plan is crucial. This plan should include staff training, security policies, and measures to track and adjust your strategies.
- Loss prevention is not a one-time effort but a continuous process that requires regular monitoring, evaluation, and adjustment.
Understanding the Problem
Bartender Theft Statistics Bars and restaurants face a higher risk of employee theft than other businesses. Current estimates suggest that about 20% of inventory disappears due to free drinks, overpouring, and outright theft.
Given that beverages are the primary source of profit for most bars and restaurants, this translates to an average loss of 23% of total profits.
Moreover, the National Restaurant Association identifies employee theft as the main source of these losses. They state that staff members account for 75% of inventory losses through various forms of theft, which we’ll delve into below.
Types of Loss
Before we delve into the strategies to catch a dishonest bartender, let’s first understand the different types of loss your business may experience. These can broadly be classified into three categories: administrative and accounting errors made, external theft, and internal theft.”
Common Causes of Business Profit Loss
Profit loss can occur for numerous reasons, and it’s important to identify common causes to protect your business better. These can range from supplier fraud and human error to operational errors and employee theft and fraud.
Here are 14 common methods bartenders might use to steal alcohol or cause inventory shrinkage:
- Registering custom, underpriced drinks in the POS and keeping the difference.
- Overpouring for friends, family, authorities, or local merchants.
- Bringing in personal liquor, using it to pour drinks, not registering sales, and taking the money.
- Marking a check as a walk-out and pocketing the cash.
- Giving unauthorized comps or free drinks.
- Claiming a returned drink, reselling it, and keeping the cash.
- Registering well drinks but serving top-shelf liquor.
- Registering top-shelf liquor but serving well drinks and keeping the difference.
- Short pouring some liquors to compensate for the increased pour cost due to theft.
- Using another bartender’s open POS login to register drinks.
- Registering a bottle of wine, serving wine by the glass, and pocketing the difference.
- Failing to register cocktail server sales and pocketing the money.
- Short pouring by a half ounce, pocketing the money for every fourth drink or so.
- Selling leftover wine from bottles to other customers as wine by the glass and not
Internal Loss
“Internal loss is one of the major causes of profit loss in the bar industry, and it can happen in various ways. This includes theft of cash or inventory, misuse of discount privileges, and even time theft.”
Examples of Successful Loss Prevention efforts
To better understand the approaches to loss prevention, let’s look at some successful examples from the retail sector. Retail asset protection, or loss prevention, is a set of practices employed by retail businesses to prevent profit loss due to inventory losses to theft, fraud, and other forms of inventory shrinkage.
Loss Prevention Strategies
The longevity and profitability of your bar are contingent upon your ability to detect employee theft and prevent its recurrence.
Consider these safeguards to identify and cease theft promptly:
Implement a Pour Policy
Over-pouring, whether intentional or accidental, can significantly reduce your profits. Implementing a pour policy helps standardize the amount of liquor poured per drink and sets clear expectations for your bartenders. You might consider using standard pour spouts with jiggers, ball pour spouts, or computerized pour spouts to regulate the pour. Regardless of the method, ensure your staff is trained to measure the correct amount of liquor for each drink.
Set POS and Cash Register Procedures
Establish POS and cash register procedures for your staff:
- The cash drawer should remain closed between transactions.
- Maintain a clutter-free space around the cash register or POS system. Messy areas can conceal pilfered money.
- Safeguard POS passwords from bartenders, preventing access to sales reports during their shift.
Implement a POS System with Security Features
Investing in a Point of Sale (POS) system with advanced security features can help you monitor transactions and detect irregularities. Modern POS systems can track your inventory levels, monitor sales data in real-time, and even flag suspicious behaviour.
Secure Your Inventory
Ensure your liquor storage room and wine cellars are always locked, granting keys only to bar managers. This safeguards your inventory and complicates the theft of whole liquor bottles.
Regular Audits and Inventory Checks
It’s essential to conduct regular inventory checks. Aim to perform these checks weekly if you’re doing them manually. While doing them every few weeks is acceptable, and monthly is bearable, anything less frequent puts your business at risk. Also, make sure to compile a comprehensive list of bar supplies.
Frequent inventory checks allow you to spot discrepancies promptly, helping you identify when and where they occur.
Regularly Spot Check Tabs
Use your POS system to check tabs routinely. These checks give a clear picture of your business operations and aid in detecting theft. Remain vigilant and notice what customers are ordering – if you see unrecorded drinks on the POS record, it may indicate possible theft.
Reconcile Cash Drawers
Cash drawers are often a prime target for theft. To curtail this issue, you or a manager should close each drawer at the end of every bartender’s shift. Taking the responsibility of drawer reconciliation away from bartenders eliminates the opportunity for direct cash theft post-shift.
Establish a Policy for Tip Jars
Place tip jars away from the POS or cash register. If positioned next to the register, bartenders might easily move money from the drawer to the jar. Consider establishing a policy prohibiting bartenders from making change using the money in the tip jar – it prevents employees from replacing cash from the jar with larger bills from the drawer.
Hire Trustworthy Bartenders
Hiring reliable bartenders is one of the most effective ways to minimize theft. While you can never be entirely sure that an employee won’t steal from you, good hiring practices, such as checking past employer references, can significantly reduce the risk.
Clarify the Consequences of Theft
Training your employees about the repercussions of theft is crucial. Explain how theft impacts your business and profits and how it indirectly affects them. Ensure your bartenders know they’re being monitored and what measures are in place to prevent theft. This training should include clear communication about job termination as a consequence of theft. If a bartender is caught stealing, enforcing this consequence sets a precedent for the rest of your employees.
Use of Surveillance Cameras
Security cameras act as a significant deterrent to both internal and external theft. Ensure your video management software (VMS) has all necessary features, like real-time monitoring and recording capabilities.”
Install Access Control Systems
Access control systems can restrict entry to sensitive areas like storage rooms and cash counters. This minimizes opportunities for theft and makes it less likely for employees to steal.
Create a Confidential Tip Line
Establish a confidential tip line where employees can report suspicious activities. To encourage participation, consider offering rewards for valuable information.
Implement Case Management Software
Case management software (CMS) can help you track and manage incidents of theft. It provides a structured approach to handle cases from initial detection through investigation to resolution.
Leveraging Technology
Technology plays a crucial role in modern loss prevention tactics. From surveillance cameras to POS systems, let’s explore the different technologies you can leverage.
Invest in a POS System with Security Features
Investing in a POS system with robust security features can help you keep track of transactions and inventory, making it harder for theft to go unnoticed. These systems can track sales data in real-time, alerting you to any suspicious transactions.
Use Case Management Software (CMS)
Case management software can help you track and manage incidents of theft, making it easier to identify patterns and culprits. It can also help you monitor loss trends and adjust your loss prevention strategy accordingly.
Use Security Cameras
Security cameras are essential to any security system and can provide irrefutable evidence of theft. Ensure your video management system has all the necessary features, such as the ability to record in high definition and store footage for a sufficient amount of time.
Install an Access Control System
Installing an access control system can provide an added layer of security by limiting access to certain areas. These systems can track who enters and leaves these areas, creating an audit trail that can be invaluable in an investigation.
Track Inventory Using Your POS
Your POS system can also track inventory, making it easier to spot discrepancies. Regular inventory tracking can also highlight trends in inventory loss, helping you adjust your loss prevention measures.
Additional Measures
Minimize Cash Payments
Minimizing cash transactions can reduce the opportunity for cash theft and make it easier to track financial flows. Encouraging customers to use digital payments can be a part of this strategy.
Have Managers Sign Off on High-Risk Transactions
Having a manager sign off on high-risk transactions can provide an extra layer of scrutiny and accountability. This can help prevent both administrative errors and intentional fraud.”
Date All Inventory and Follow First In, First Out (FIFO) Inventory Management
Proper inventory management, such as the FIFO system, can make spot discrepancies easier. This system ensures that the oldest inventory items are sold first, reducing the risk of spoilage and waste.
Monitor the Dumpster and Garbage Procedures
Monitoring your dumpster and garbage procedures can prevent staff from using these avenues to steal inventory. Regular checks and even installing security cameras can be effective deterrents.
Hang Anti-Theft Signs
Visible anti-theft signage can act as a psychological deterrent for potential thieves. It is a simple and cost-effective strategy that can significantly reduce theft.
Creating a Comprehensive Loss Prevention Plan
A comprehensive loss prevention plan is crucial to maintaining a profitable and sustainable bar operation. This plan should be a detailed document outlining the strategies, processes, and procedures your business will use to prevent losses due to theft and fraud. Here’s how you can create one:”
Understand Your Business and Identify Risks
Start by thoroughly understanding your business operations and identifying potential areas of risk. This could include understanding the workflow of bartenders, the cash handling process, inventory management, and the points of interaction between staff and customers. Identifying these risks will help you design a plan to address these areas specifically.
Develop Policies and Procedures
Based on the identified risks, develop clear and concise policies and procedures that employees must follow. These policies should address areas such as cash handling, inventory management, customer interactions, and employee conduct. Ensure all employees are aware of these policies and understand the consequences of non-compliance.
Train Employees
“Training is a crucial part of any loss prevention plan. Employees should be trained on your policies and procedures, how to identify suspicious behaviour, and what to do in case of suspected theft or fraud. Regular refresher courses should also be provided when training employees to ensure that knowledge and skills are up-to-date.”
Implement Security Measures
Security measures, including CCTV cameras, POS systems with security features, access control systems, and anti-theft signs, are important components of a loss prevention plan. These tools will help deter theft, monitor operations, prevent shoplifting, and provide evidence in case of an incident.
Regular Audits and Reviews
Regular audits and reviews will help you understand the effectiveness of your loss prevention plan. These checks will allow you to identify any potential issues, monitor loss trends, and make necessary adjustments to your plan.
Encourage Open Communication
Establish a culture of open communication where employees feel comfortable reporting suspicious activity. You can set up a confidential tip line or reward programs to encourage this behaviour.”
Continual Improvement
“Your loss prevention plan should not be static. Regularly review and update it to incorporate new risks, technologies, and strategies. Regular employee feedback can also provide valuable insights for improvement.
Maintaining a Secure and Profitable Business
Preventing theft and fraud in your bar is a complex challenge, but with careful planning and the right strategies, you can significantly reduce the risk and protect your profits. Remember, an effective loss prevention strategy is about more than just catching a thief—it’s about creating a culture of honesty, accountability, and respect.
Frequently Asked Questions On Bar Theft Prevention and Liquor Security
How can I hire the right people for my bar?
The hiring process is an effective stage to mitigate potential problems. Make sure to conduct thorough background checks, check references, and use personality tests along with tough bartender interview questions. Being rigorous in this process is crucial, as we’re talking about the health of your business.
Look for individuals who have invested time in learning how to become a bartender, whether through bartending school, acquiring a bartending license, or studying the best bartending books. This demonstrates their commitment to the profession.
How can I deter theft at my bar?
Employees are less likely to steal if they believe they’re being watched or if management keeps a close eye on operations. Here are some strategies you can implement:
- Install a camera behind the bar
- Let your bartenders know you have a new bar inventory management system like BinWise Pro and will be performing variance reporting and analysis
- Be transparent about policies related to comps and pour volume
- Monitor bar operations periodically throughout their shifts
In summary, maintain a visible presence. If your employees know you’re watching and ensuring adherence to policies and procedures, they’re less likely to act dishonestly.
What should I use secure rooms for?
All your bar inventory should be stored in a secure room. Access to this room should be limited to bar managers and a few trusted bartenders. Additionally, secure rooms should be used to store employees’ personal belongings during their shifts. Allowing bartenders to keep bags and backpacks behind the bar during a shift poses a risk.
How can I use a bar incident log book effectively?
A bar incident log book serves as a tool for staff-to-staff communication. It’s a space for bar staff to log any events that a manager or other staff member may benefit from knowing about. For example, if a guest comes in, gets drunk, and falls off their bar stool, that’s something a manager should be aware of, and it should be recorded in the bar incident log book. Such incidents can lead to complaints or lawsuits, which should never catch a manager off guard.
While the log book doesn’t directly impact your inventory control or theft risk, it provides context that can help you make sense of daily numbers if necessary, like if a guest demanded four remakes of a cocktail. Logging this would explain any discrepancies in inventory numbers for that day or week.
Wrapping Up
In conclusion, protecting your bar from theft and fraud is a challenging yet necessary part of running a profitable business. However, with the right strategies, technology, and commitment to a loss prevention program, you can significantly reduce your risk and create a safer, more secure environment for both your employees and customers.
