Preventing Employee Theft 

It doesn't matter what kind of business you run, if you have employees, you better realize they can steal from you. They may take money from the cash registers. They might take cash left by a customer that was to pay a check. They can over pour drinks and not ring in others. There are hundreds of methods. However, how much theft and how often it occurs will depend totally on ownership and management.
    Far too many owners and managers have the wrong attitude surrounding employee theft. The attitude surrounds “acceptance” of the theft, and more than one owner has told me that they know their employees are stealing from them but considered it a part of conducting business. WHAT? Theft is totally unacceptable in any business.
    Losses from employee theft should never be considered part of conducting a successful business. The losses from one thief can total in the thousands annually and if several employees are involved on multiple shifts, the losses could kill a new or small establishment. Any alcohol venue, big or small, should aggressively seek out employee theft and prosecute.

Stopping Theft Before it Happens
    When you are still in the hiring process, get a good employment history. Use their application to ask real, meaningful questions about past employment history. Look at their dates of employment and ask about any time gaps.
    Calling and talking to their previous manager or owner can tell you volumes. How was their attendance? Would their prior employer re-hire them? If you get any uncomfortable answers, dig deeper.
    A criminal background check for the prospective employee can cost as little as $20 and as much as $100 or more. However, for around $30 per new employee, you can discover the number of times the person has been arrested, if they have a suspended license or if they are wanted for anything. Background checks are inexpensive and  very cost-effective.

Stopping Theft by Current Employees
    I love video systems, especially when they are linked up to a POS system.                 This double security method can save thousands. If not linked to the POS register, have a good camera focused on the cash register with no blind spots.
    Providing employee benefits or incentives along with clear guidelines related to employee actions can help limit theft also. And don’t forget to provide regular employee reviews to help both parties see that each side cares and wants the same thing for the business. Finally, add in a good liquor control system and occasionally use a secret shopper program.

Responding to Employee Theft          
    First and foremost, have the employee arrested and prosecuted. This process takes time but costs you nothing. Additionally, 99 percent of the time the employee pleads guilty and court isn’t necessary. However, there is a process that should be followed for proper prosecution.

    1. Gather and save all evidence such as video and receipts. Share this information only with the appropriate law enforcement.
    2. Call law enforcement at the first theft and make the report, even if you can’t prove who did it.
    3. When you have the proof, terminate the employee. They can still be arrested later.
    4. Keep detailed records of all surrounding conversations, employees involved and the losses.
    5. Follow up on prosecution with the detective or the prosecutor, and seek monetary restitution for your loss in court.
 
    Remember this: If you were robbed at gunpoint on the street, you would certainly want the person arrested and prosecuted. Employee theft is really no different. NCB

This a sampling of information Robert Smith, president of Hands Alliance Inc., will be covering at his seminar on Legal and Safety at “The Show,” March 5-8, 2006. For more information, visit nightclub.com.