Avoiding an Inside Job
Bread & Butter, December 1999

Although most restaurant employees are honest and hard-working, internal theft still occurs within the industry. The average annual theft per employee is $218, according to the Fourth Annual Survey of Restaurant and Fast Food Employees, which was released earlier this year and was administered by National Computer Systems (NCS), a global information-services company based in Minneapolis. The survey polled more than 1,400 employees from 11 different restaurants and fast-food outlets.

Internal theft can take many forms, including employees giving free food to friends, taking home restaurant items and stealing other employees' tips. The newest type of employee theft is called credit-card skimming. In this form of theft, employees who have access to a customer's credit card steal account information by swiping the card through an unauthorized magnetic-card reader. The data is then copied onto counterfeit credit cards.

Here are some ways to deter employee theft in your operation:

• Hire the right employees. To help determine if potential employees are trustworthy, Ron Ching, owner and manager of a combined Subway and Baskin-Robbins in Falls Church, Virginia, always checks applicants' references. When high school students apply, he contacts their guidance counselors.
• Create a caring culture. Research suggests that one of the most effective theft deterrents is to treat employees well. "It's impossible to completely eliminate counterproductive behaviors and theft in the workplace, but companies that establish and communicate positive corporate values can experience a significant reduction," says Linette Heatherly, personnel research coordinator for NCS.
• Make sure all monies balance out. "We do a drawer check after each shift," says Ching. Employees check that the correct amount of money is in the cash register.
• Keep a careful inventory. After each shift, Ching's staff counts the remaining sub rolls to see whether the number of sandwiches sold matches the number of rolls used.
• Watch what goes out with the trash. Sometimes employees swipe food, beverages and china by smuggling out the items with the trash, says Frank Doyle, senior director of training for the National Restaurant Association. He recommends using clear garbage bags to decrease the likelihood of such incidents.
• If you suspect a problem, get to the root of it. If Ching notices a recurring problem when one particular employee is working, he'll try to confirm his suspicions by moving the employee to another shift with different co-workers. If the same problem occurs during the new shift, he'll confront the employee. "But I never take an accusatory tone," he says. He calmly discusses the situation and asks for an explanation.