How to Prevent Employee Theft in Your Restaurant

You've found the perfect location, you've negotiated an excellent lease, you've hired a great chef and the patrons are streaming through your front door. Everything seems to be perfect; in fact, you may have more business than you can handle. But why doesn't it seem to be adding up at the register?

Lifelong restaurateur and former Famous Sam's Inc. Chief Operating Officer David Scott Peters knows the answer: The enemy is within. According to National Restaurant Association studies, employee theft averages just under $220 per person each year. If you employ an average of 20 employees, you're losing $4,400 per year. In an industry that employs more than 9 million each year, losses like that can add up to $1.98 billion annually -- and experts caution that this number is probably very conservative.

For many restaurateurs, the answer to combating employee theft is to simply install security cameras. Peters disagrees in theory. "I think they're a wonderful tool but I don't think they're a wonderful tool for what most people buy them for," Peters says. He says that while cameras are useful for reviewing an incident that may have taken place in a restaurant parking lot or to defend against a liquor violation, they're generally useless against combating theft.

If somebody has stolen something from you, it's gone. You're now viewing it on a video; it's already happened. Cameras are wonderful for situations but they're reactive. I'd rather be proactive by having management on my floor and systems in place.

The secret to combating this, Peters says, is to install a series of "SMART" (Simple, Measurable, Applicable, Repeatable and Trainable) systems to remove you and your restaurant off the honor system. Peters' strategy is simple -- by using these systems, restaurant owners are able to keep the honest people that work for the restaurant honest.

"Most of us have to take a moment and decide whether or not we're going to be dishonest today," Peters says. "With a dishonest person, there's nothing that will stop them -- systems, cameras, you name it ... security guard. A dishonest person is dishonest. But if we can keep the honest people honest by just making them think they might get caught, they stay [honest]."