Employee theft could cost your business hundreds, if not thousands of dollars every year.  And in any business, especially small businesses, every penny counts.  Employee ‘theft’ or manipulation can come in many forms from taking actual cash, tips or inventory items, or giving away free items to friends/family without accounting for them.  If left goes undetected, internal and external theft could bankrupt your restaurants, café or retail store.

Fortunately, implementing some simple and relatively low-cost processes can help minimize losses in your business.  Combining these proven techniques with modern technology can prevent your team members from stealing cash, food or retail items from your business.  This step-by-step guide provides 6 ways to minimize and stop employees, even managers from committing theft.

Install security cameras

Security cameras offer up more than just a tactic for theft, they help safeguard employees, customers and the business.  This helps eliminate and/or deter internal and external theft.  Cameras also provide video proof of honest employees caught in customer complaints or disputes.

Provide a budget to front-line staff for freebies

Employees rewarding customers is good business.  Customers leave happy and appreciated, while staff will generally receive great customer comments, more tips and more sales.  It is a win-win for the customer, team member and business.  However, employees who offer lots of freebies could be costing your business and driving down revenue without the return on investment.  You must put a limit and budget on what is fair and acceptable for each employee to offer as a freebie.  This not only should apply in your business to the regular and VIP customers, but to customer complaints.

Implementing policies for limits on how much employees and managers can give away, will help keep your losses under control.  If the monetary value of freebies surpasses the allotted amount, this might indicate a need to solve operational issues such as re-training or accountability.

Offer attractive bonuses and perks to team members

Who doesn’t like to win something free for doing a great job?  Offering an attractive bonus or perk to your employees can and will keep them satisfied.  Employees commit internal theft for various reasons. Perhaps they are unsatisfied with their hourly wage or need money in an emergency.  Another way to discourage internal theft is to provide employees with these extra benefits.  Work harder and earn more.  One example that works well is in restaurants where you can make the prize a free appetizer or meal, keeping employees from potentially stealing food and not ringing it in.

Audit inventory regularly, consistently and publicly

Do you track all inventory on a regular basis?  In my experience the restaurants, cafés and retail stores that count often, see decreased losses and improved inventory variances.  Counting accurately and often also helps your business with inventory controls; having the right products, in the right place at just the right times for selling, with not too much over-stock or waste.

Tracking your product variances in any business, helps you spot discrepancies that may indicate employee or customer theft.   It is also important to follow up with variances and communicate that you do count and track everything coming into and out of your business.  Having customers and more importantly your team know this and be accountable will decrease theft and increase ownership

Keep an open-door policy and/or suggestion box

Make it easy for your team members to connect with leadership often.  Doing this not only increases employee satisfaction and retention, but allows employees to feel safe reporting employee theft anonymously.  You must train your leaders to keep this feedback confidential.  Also, if you do let someone go for stealing, have one-to-one connects with each employee to confidentially explain what happened.  Depending on your business, having an anonymous suggestion or feedback box can also open up dialogue between employees and have leaders gain insightful information about where to look for opportunities.

Avoid giving full control to one single person

In some businesses it may be impossible to avoid having one person handle a transaction and not have to work through or with other team members to provide the product or service (think bar staff).  Bartenders are one example that do not have to be accountable to anyone else for their product.  They make a drink, bill the customer and collect payment.  Some bartenders see this as a huge opportunity to ‘skim’ and or ‘forget’ to ring in the drinks and take full payment as a tip.  Avoid this by having two bartenders work, and or having an assistant there to support.  As a manager being close to your bar staff can also help avoid staff.  This isn’t always possible based on staffing costs and needs, but can be one way to minimize theft.

In other businesses regularly audit how products are provided to the customer and where potential gaps in accountability are.  For retailers, having one stock person gather items for all sales staff, helps create accountability and accuracy through two employees rather than one.

Also, prevent false refunds and voids by requiring two people to approve them instead of just one.  Employees are unlikely to be working together to steal.


Overall, there are many quick and easy measures to put in place to minimize or eliminate theft in your business.  Most importantly is to hire the right person that you trust and can do the job.  Next create a great employee experience, with great training and recognition for doing a good job.  Reward them well and empower them to give freebies to loyal customers.  And lastly, place cameras and solid inventory controls in place, as well as openly discuss tracking of cash and inventory.

Opportunistic employees will feel much less tempted to steal money if you implement the above tactics, saving you time and money.  Looking for support with hiring, training and driving revenue in your business – hire an industry expert with over 10 years of mystery shopper and auditing experience to help your business today!

Are you concerned about employee theft in your business? We can help!  Email today for a free consultation – Morgan@hospitalityconsulting.co!


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