Do you have a problem with theft behind the bar? Many in the bar business do. But if you’re waiting for a rise in your pour cost to alert you to a potential problem, you may be out of luck.
Tracking pour cost has long been the accepted way of detecting bartender theft. However, there are more ways to steal from a bar that won’t have the slightest affect on pour cost. In fact, a clever thief can steal from your bar and actually make your pour cost percentage drop.
Pour cost analyzes the relationship between cost and sales. If a bartender serves a drink and pockets the cash proceeds, he’s basically increasing cost without increasing sales, which will cause pour cost to rise. While the increase may be imperceptible, pour cost will rise. If the bartender then replaces the stolen ounce of liquor with an equal amount of water, pour cost will remain unaffected.
Substitutions are examples of a type of theft that won’t cause pour cost to rise. The scam involves a bartender making drinks with well liquor instead of call brands, charging customers call prices and pocketing the difference. Because the bartender poured well liquor and registered the transaction as a well sale, pour cost remains unaffected.
Underpouring schemes are another example. A bartender short pours a series of four drinks by a quarter of an ounce, thereby creating a surplus ounce of liquor. The bartender then sells that shot of liquor and pockets the cash. Again, pour cost is unaffected.
While measuring your pour cost is a smart thing to do, it’s not enough. If the early detection of internal theft is important to you, there’s more you should know.
With nearly all types of theft behind the bar, one thing is certain: The cash proceeds are not ending up in the register. Regardless of the scam, the money winds up in the bartenders’ pockets. So to spot the first signs of theft, look at sales.
Bar productivity measures bartender sales per hour and is computed by dividing the shift’s gross sales by the number of hours the bartender worked. There are two aspects to tracking productivity: calculating the staff’s average sales per hour figured on a weekly basis and computing the daily sales per hour figures for each shift.
Calculating the staff’s productivity involves totaling the bar’s gross sales and dividing them by the total bartenders’ payroll hours for the week. It’s advisable to calculate the day shift’s average sales per hour separately from the night staff’s average. Because there is often a considerable difference between the two figures, calculating the day shift’s productivity separately from the night shift’s makes the analysis more relevant.
For example, if the two night bartenders rang in $6,935 in sales for the week and clocked in a combined 83 payroll hours, the staff average for the night crew works out to $83.55 per hour. During the day, the bartending staff rang-in $2,250 is sales and worked 40.5 hours for a staff average of $55.55 per hour.
The second aspect of productivity is tracking sales per hour for each shift during the week. To illustrate, two bartenders work on Thursday night. “Jim” works six hours and rings in sales of $542 or $90.34 per hour. Adam, working six and a half hours at the same bar on the same night, registers sales of $442, which translates to $68.15 per hour.
Keep a journal or spreadsheet and track productivity figures for each shift on an on-going basis. After several weeks, patterns will emerge. It soon will become evident who are your sales leaders and who fall consistently short of the staff average.
Explanations for Low Productivity
If a bartender’s sales per hour come in consistently below the staff average, five things are possible. One, he may move too slowly and literally can’t keep up with demand. Two, he could make lousy drinks, so people don’t stick around. Three, his personality and attitude could be so off-putting that customers leave early. Four, his sales ability could be so unrefined that he consistently undersells. Or five, he could be stealing.
How do you know which it is? Take some time and observe the person. Does he move quickly and with purpose? Or is he more laid back and sluggish? If the person can’t keep up behind the bar, then you’ve identified an area in which he needs to improve.
If that’s not a problem, does it appear as if he has the necessary skills for the job? Do his drinks look good, or are they frequently returned? Does the bartender have a good personality for the job? Does it seem as if he has a positive working attitude? Does he exhibit good sales ability?
If none of these things seem to be a problem, he may be stealing. Regardless of the scam, theft takes a toll on productivity. Tracking productivity can prove to be an invaluable management tool. Between pour cost and bar productivity, there isn’t a scam or fraud that you can’t catch.