7Shifts How to Prevent Internal Restaurant Theft

Money, food, time – there’s a lot that can go missing in a restaurant, and just as many potential culprits. Sure, sometimes it’s your customer (a topic we’ll save for another day), but nothing quite compares to the betrayal restaurant managers feel when they suspect – or, worse yet, confirm – that an employee has been stealing from them. 

Not only is theft a crime, but it can have damaging effects on your business’s financial health. With restaurant employee theft, managers can’t afford to sit on their laurels; they must take action. Yet maneuvering situations like these can be tricky. If you come out of the gate red-hot and flinging accusations, you’re likely to spoil employee morale. On the other hand, inaction or empty threats might send the message that stealing is okay as long as it’s discrete. 

The first step on the road to recovery from restaurant theft is realizing there’s a problem. Let’s start by facing some hard facts about stealing in the service industry. 

Note: Before we dig into the data, it’s important to say that none of this is being shared to breed a culture of skepticism or mistrust. Vigilance is one of the many essential qualities for successful restaurant managers. As Sir Francis Bacon once said, knowledge is power!

server carrying a tray of drinks

How prevalent is employee theft in restaurants?

If you think your restaurant is immune to this problem, think again. According to the United States Chamber of Commerce, a whopping 75% of employees confessed to having stolen at least one item from their employer. These bad habits cost the restaurant industry as much as $400 billion in lost revenue, and is the driving force behind nearly half of small business failures within the first year. 

What’s not as clear is the motivation behind the crime – why are your restaurant employees stealing in the first place? You might be surprised to learn that the most common explanation is simply that a staff member (who may or may not have a squeaky clean criminal record) saw an opportunity and seized it. In other cases, employees may steal because they feel slighted or undervalued and have decided it’s time to take control of their own compensation.

No matter the root cause is, the problem is real, rampant, and worth paying attention to. Next, we’ll turn our attention to common theft methods and how to protect your restaurant by preventing them. 

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Common Types of Restaurant Employee Theft 

There are three types of goods bartenders, servers, cooks, and other front- or back-of-house staff are often guilty of lifting: money, food, and time. 

This is not an exhaustive list. Other types of theft can include less common but more contentious schemes like credit card skimming or stealing intellectual property. But for now, let’s stick to the basics. 

Monetary theft in restaurants

There are many ways restaurant employee and bartenders can treat themselves to some extra cash on your dime. They might pocket a few bucks straight out of the cash register, “update” a customer tip by modifying the amount on the bill, or work in cahoots with colleagues to “cook the books.” According to the U.S. Chamber of Commerce, annual losses due to employee theft and dishonesty can be as high as $50 billion. That’s a hefty price to pay!  

Let’s say it’s the third Tuesday in a row you’ve noticed your cash register is a little lighter than it’s supposed to be. You think, surely it can’t be a coincidence that Tuesdays are the only days the new bartender, Matt, is behind the bar – but you’re not sure how or whether to confront him until you have hard proof. 

Monetary theft prevention tips 

  • Install a surveillance system. Companies like Solink have designed video surveillance systems that give remote access to real-time feeds from your restaurant. Provided your cameras are set up in accordance with state and federal regulations (across the United States, for example, it is illegal for business owners to record audio), installing a surveillance system is a great preventative tool.
  • Reconsider your money-handling protocols. It’s likely not necessary for everyone in your restaurant to have access to your restaurant’s cash register or safe; this can put your establishment at unnecessary risk of theft. Be careful when delegating these responsibilities, and make sure staff are well aware of the processes, restrictions, and consequences.

diner server at station

Food and beverage theft in restaurants

According to the National Restaurant Association, internal and external theft accounts for roughly 4% of total food costs on average. Though 4% might sound like a small figure, it’s a sizeable hit to your bottom line since keeping food costs low is so important to your profit margins. 

In some cases, staff may not be conscious of the fact they’re stealing. To them, sneaking the odd snack every now and then isn’t a big deal. Setting clear guidelines draws a line in the sand for employees to know when they’ve crossed it – whether that’s pocketing packaged goods from the storage room or gifting full meals without permission. At the end of the day, you’re the one footing the bill. 

As far as drink theft goes, over- and short-pouring are common bartender theft methods where someone is either shorted on alcohol or benefits from a generous pour (to hopefully improve the tip at the end of the service). 

Food and beverage theft prevention tips

  • Create and communicate clear guidelines around food. Make it known to your staff what, when, and how often it’s acceptable to eat on the company’s dime. You might also consider mandating that all comp meals be rung through the system to allow for better tracking.
  • Ramp up inventory management practices. In addition to streamlining your back-of-house, reducing waste, and keeping food costs down, your restaurant inventory management software can also help you pinpoint when food theft might be at play. If you notice a particular item is depleting faster than usual (and your sales aren’t changing to reflect this), it might be time to call in reinforcements to confirm employees aren’t walking out with a fistful of tips and a late-night snack. 

Time theft in restaurants

How can you steal an abstract concept like time? Easy: by tampering with how, when, and whether you clock in and out for the day. Without a proper tracking tool in place, there’s little reason (other than, say, a moral compass) for your servers not to treat themselves to a few extra bucks by clocking in ten minutes early and clocking out ten minutes late. She might also decide to award herself an extra 15-minute break mid-shift “just because,” and keep the decision to herself. 

Restaurateurs should also be aware of the threat of “buddy punching,”  which is having someone clock in or out on your behalf. According to HR Daily Advisor, this bad habit costs businesses as much as $373 million each year.  

Remember that bit about food costs being a key metric for your bottom line? The same goes for labor costs. If your staff isn’t working when they’re meant to, your guest experience, efficiency, and bottom line will suffer. Efficient restaurant labor management ensures your costs stay below the percentage threshold for your establishment type (roughly 25% for QSRs and upwards of 30-40% for table service and fine dining).

Time theft prevention tips

  • Schedule smarter. If you haven’t already, it’s time to invest in restaurant scheduling software. At 7shifts, our partner time-clocking app 7punches seamlessly integrates to manage punctuality and offer peace of mind. Time punches are automatically marked as ‘Unapproved’ if employees clock in prior to their designated start time, or clock out after their scheduled end time. This gives you as manager improved visibility and control of how much you’re spending on the time your employees spend at work. If you’re really looking to crack down on time theft, biometric clocking (using fingerprints or GPS) might be the solution for you. 

Bonus Tip: Take a moment to review your restaurant’s code of conduct. If you don’t have one in place, now’s the time to consider one.

This document should form part of your restaurant employee training protocol, outlining the rules and expectations for new employees who accept a position at your restaurant. Perhaps it’s time to refresh the document, refresh the team, or a bit of both.  

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Written by   |  
Jessica Reimer is the Content Producer for 7shifts, an employee scheduling app designed for restaurant based in beautiful Saskatoon, Saskatchewan. She works with the rest of the 7shifts marketing team to help their customers all over the world save time scheduling, reduce labor costs, and improve communication in their businesses. Jessica has authored feature pieces and blog posts for a number of provincial, national, and international publications and specializes in psychology, community engagement, lifestyle, and business communications.