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Sting or Be Stung
Strategies for Reducing Employee Theft
Recently, a nightclub owner called me and asked for help to
catch one of his bartenders who was stealing from the cash register and
possibly stealing stock from the liquor room. Among many other questions, I asked what he was prepared to do to the bartender if we did catch him stealing.
The owner said, “Fire the bastard.” I asked why he didn’t want the
person arrested and prosecuted. He told me he felt that the time and
trouble going to court was just not worth it. I explained that the
police, a detective and the district attorney will do all the work and
that he just had to be available for further questions and a possible
court appearance. At first he was very skeptical, but after we gathered
the evidence to prove the employee was stealing, he agreed to have the
person arrested and prosecuted.
We turned all of the evidence to prove the theft in court to the
police. The officers wrote their report and gave it to the detective. A
day later, the detective arrested the bartender for grand theft and
took him to jail. The bartender spent two days in jail and after
approximately two months, after only one court appearance, the
bartender plead guilty to petty theft.
The judge put the bartender on two years probation and ordered that he pay back the owner more than $1,000 in restitution.
This owner learned a great lesson and has changed his current practices dramatically.
The List
What follows is a list of points the owner implemented after our discussion.
• Acceptance. The industry attitude of adding employee theft losses
into the operating cost of running the bar must stop.
Employees are aware of this “acceptance” of internal
theft as an operations cost, and this fact can give them a simple
reason to steal. Owners must stand firm that theft isn’t acceptable at
any level.
• Written Policy. Employees must have a clear and written policy
surrounding the view of employee theft. This policy must be
set in stone and followed to the letter. Use buzzwords like
“terminated,” “arrested,” “prosecuted” and “civil lawsuit.”
• Criminal Background Checks. For as little as $20, operators can
find all criminal arrests or convictions on potential
employees. Remember, your managers, bartenders and
servers will be handling several thousand dollars per night.
• Cameras. Every alcohol service venue should have a camera system.
I recommend digital systems and a minimum of eight
cameras. The cameras should be placed in areas to aid
in stopping employee theft as well as showing patron actions
should they have a problem and want to later sue the operator.
• POS System. Good POS systems are very reasonably priced today.
Nearly all can integrate with your digital camera system. A POS
system can keep track of nearly every sale and keystroke on cash
registers while being able to generate quality, detailed reports.
These reports can show both the hidden and the obvious thefts.
• Secret Shoppers. Use of a professional spotting company or any
person who knows the industry can help catch employees
taking money or bottles of booze, drinking on the job and so
many other things owners should not tolerate.
• Zero Tolerance. If an employee is caught stealing, owners must
have a set plan and be ready to stick to it. If they don’t,
other employees will see that they can still get away with
stealing. Have this Zero Tolerance policy written for employees to read. Have the policy outline steps for managers or owners to
follow.
The Results
The owner from the above story implemented nearly all of the listed
items. He had all current and new employees read the new theft policy
and sign a document acknowledging they were aware of the zero tolerance
policy. Strangely enough, out of his 21 current employees, five of them
refused to sign the document and quit on their own that day.
Within the first month of having the policy, the cameras and new
POS system in place, the owner saw a 21 percent increase in profits.
Over the next five months, four other current employees left on their
own. Three other long-term employees came forward together and told the
owner they knew several of the employees who quit were stealing but
never had the guts or courage to tell the owner.
Yes, theft will occur even with all of the listed tools. If it
does, have the thieves arrested, fire them, prosecute them and, if you
need to, sue them in small claims court.
Good luck, and don’t let employees keep stealing your profits. NCB
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