It is impossible to get accurate statistics for the industry average of revenue lost due to employee theft. In my observations from working in the industry, I can easily say there is some loss due to employee theft at 95% of the restaurants, bar or nightclubs I encounter. Where does that theft occur? … That’s right, The Bar!
What does employee theft look like?
- Giving away free drinks
- Over-pouring drinks
- Placing cash in the tip jar instead of the register
- Drinking on the job or pouring drinks to employees
Now you may be asking yourself, “Why are you focusing all your attention on the bartenders?! What about everyone else?” The truth is, they are the main source of leakage. If winter is coming and the roof to my house has two holes in it, one 10-feet in diameter and and the other 2cm – you can bet the house that I’m going to focus on getting the large one repaired first.
How do these scenarios effect your top and bottom line?
Is your bartender giving away free drinks?
This means he/she is giving your customers free alcohol in exchange for a bigger tip. Bypassing all the rhyme and reason, your bartender is taking money out of your pocket so they can put it in theirs.
Is your bartender over-pouring drinks?
The common misconception is that the more alcohol in a drink, the better. In reality, cocktails are a balance of proportions, just like any other recipe. A Long Island Iced Tea with 6 oz of alcohol and just a splash of sweet and sour and coke is NOT doing anybody any favors. (Don’t believe me? Try and drink a stiff well-alcohol Long Island and let me know). By over-pouring alcohol, not only is your bartender impacting the bottom line, they are impacting the guest experience. Your guest now has a poorly-proportioned cocktail and will get intoxicated much sooner than they planned.
If the guest experience reasons don’t sell you on why not to over-pour, let the numbers talk.
A standard 1 liter bottle of alcohol equates to 33.8 fl oz. The average one-liquor drink (ex. Vodka-Soda) is 1.5 oz liquor plus mixer. By this standard, one bottle of your well vodka will translate into approx 22 cocktails. If your bartenders are all pouring 2 oz pours instead of 1.5oz, you’ve dropped your yield down to 17 cocktails, a loss of 22.7%. If your well vodka drinks are $10 a pop, your were projected to take in $220 in revenue for one bottle of vodka, but instead, you only realized $170 in revenue. That’s a $50 loss in revenue per bottle. How many bottles of spirits does your restaurant bar or nightclub go through a week? 60 bottles = $3,000 in revenue (PER WEEK) left on the table.
To better illustrate, please see the graph to the right. This assumes you are ordering 50 cases of liquor a month (600 bottles) and each bottle costs you 12 dollars and you sell your average drink for $10. The difference in your beverage cost between a 1.5 oz pour and a 2.0 pour ends up being $1,800 a month, or $21,600 over the course of a year, out of your pocket.
What if your restaurant doesn’t serve liquor – only wine and beer? Then you need to be even more precautions because your wine cost is much less forgiving.
Placing cash in the tip jar instead of the register? Bartender drinking on the job or pouring drinks for other employees?
This employee should be fired on the spot. These things are hard to observe sometimes., which is why you need a trained professional.
Why Hire a Mystery Shopper or Try to Evaluate your Loss Prevention?
Are you an owner or semi-absentee owner?
It’s physically impossible for you to observe everything all the time. Even with the latest camera technology, your employees know nobody is watching the footage (and let’s be honest – who has the time to). After being in the business for over a decade and “mystery shopping” 100’s of restaurants, we have seen every trick you can image. We know exactly how to spot the signs of theft and what to look for to get the confirmation you are looking for.
Are you a manager that doesn’t want to be “the bad guy?”
Surprisingly, this is a real thing. The restaurant industry is known for close relationships amongst employees and long-bonded friendships. If you don’t want to be the bad guy, let us handle it. Blame the owner, blame the investor, blame someone else. You can tell your staff they hired us and that’s that. But along the way, we will give you the tools you need to reel in the reins and get things under control.
You can’t afford not to!
Many owners & managers I encounter have a gut feeling there is a problem or have observed some suspicious behavior and their action stops there because they feel they cannot afford to pay someone to come in and evaluate their business. In response, I say, “Would you rather allow your bartenders to steal or give away thousands of dollars a month in alcohol, or you would like to pay a tiny fraction up front to either solve the problem, or give you piece of mind that they are great employees?”
What other criteria do we evaluate?
The short answer is: the criteria depends on the establishment and also depends on the specifics you would like evaluated.
But in addition to your specific requests, we include:
- Telephone Etiquette Report
- Parking Lot/Outdoor Ambiance Report
- Bouncer/Security Report (if applicable)
- Host Interaction Report
- ID Checking Report
- Over-serving Report
- Bartender or Server Service Report
- Bartender Pour-By-Pour Report – We will list each alcohol your bartender(s) poured and how much. (we are amazing at counting pours). These all will have time stamps so you can review camera and POS records in order to confirm theft.
- Recommendations
What now? Contact us!
