How To Protect Your Restaurant From Internal Thefts 

Internal Thefts In Restaurants

Internal thefts and pilferages are unavoidable practices prevailing in the restaurant industry. They cause considerable harm to the overall profitability of a restaurant. In spite of tight checks and measures, there is always a likelihood of thefts taking place in your restaurant.

According to the National Restaurant Association, internal employee theft in restaurants has led to a 75 percent shortage in the inventory. Internal thefts contribute to a loss of $400 billion within the first year of running a restaurant business. This article provides a guide on internal theft in restaurants and how restaurateurs can take careful measures to prevent them. 

The Different Forms And Types of Internal Thefts

Typically, thefts within restaurants fall into the category of monetary thefts and inventory-related thefts. 

Few examples of Monetary Thefts in restaurants

  • Showing fake discount records
  • Reprinting the bill after editing items
  • Repurposing the same bill 

How Inventory Thefts take place in the restaurants

  • Giving food or liquor concessions to customers for attracting hefty tips
  • Stealing food and liquor from the inventory
  • Giving free food to friends and family

How To Know If Internal Thefts Are Taking Place In Your Restaurant

Internal thefts in restaurants either on a large or small scale have adverse effects on the profitability of a business and can result in huge costs. Running a restaurant business hardly spares owners any time to detect the misappropriations and track the fraudsters. To avoid internal thefts taking place in your restaurant, it is essential to observe the management of cash and inventory levels. Here are some signs that indicate the occurrence of internal thefts in your restaurant. 

Internal Thefts In Restaurants

  1. Discrepancies in finances: Carefully observe your cash records and profit margins. Are your profit margins going down? Monitor your food costs. Without any substantial modification in the inventory, an increase in the total food costs hints internal thefts in the restaurant. High food costs, low-profit margins, and a massive difference between the cash records and total bills are an indication of internal thefts taking place on your premises. 
  2. Missing merchandise: Is your central warehouse continually running out of products? Or is it that you are hearing customer complaints about the unavailability of food items on the menu? Missing inventory is a good indication that someone from your restaurant is stealing the stock. 
  3. A disparity in the consumption of stock: A variance between 5-7% between the actual and estimated stock is acceptable and may be accounted for regular wastage. If you are observing a considerable variance between the actual stock left at the end of the day and the estimated stock that should have remained, there is a strong possibility of inventory theft. 
  4. Fluctuating Sales: Your restaurant sales records display the same number of meals or drinks that have been served in the past, but the cash records are not tallying. Manipulating sales records might be a sign of internal thefts happening at your restaurant. An unclear record of the total sales also indicates that sales records are being altered or modified to generate extra cash which is being pocketed by an employee.

How To Prevent Internal Thefts In Restaurants

A consistent effort in regularizing the internal and external audits and implementing a well-designed inventory management system that controls each level of restaurant supply chain operations can significantly help in reducing thefts in the restaurants. With internal control over the entire restaurant operations, you will be able to set standard operating procedures at each business level. 

Internal thefts and pilferage significantly affect the restaurant’s inventory. That is why it is crucial for the restaurateurs to monitor it. To streamline the back of house operations, cut the food costs, and prevent excessive wastage of inventory; a robust inventory management software can be of great help. Inventory depletions or mismanagement in sales records, any such kind of misappropriations directly reflect in the daily reports generated by POS software. 

Installing surveillance systems such as security cameras can be a good preventive tool to avoid the incidents of internal thefts in your restaurant. With security cameras installed in the restaurant, any employee caught stealing money from the cash drawers or sneaking away with inventory can be tracked and subjected to further inquiry based on actual proofs. Security cameras are also great tools for letting the restaurant staff know that they are constantly under supervision. 

protect restaurant from internal thefts

Limiting the access rights to cash or assets, physically protecting the assets by locking up the cash drawers, liquor cabinets, conducting frequent internal and external audits are other preventive measures to avoid internal thefts at the restaurant. 

These measures would help in increasing the efficiency of a restaurant and significantly reduce the losses due to employee thefts. 

How POS Software Can Help In Preventing Internal Thefts In The Restaurant

To minimize internal thefts in the restaurants, it is vital to keep a thorough check on the entire restaurant operations and deploy preventive measures. However, for restaurant owners, it would be difficult to physically monitor all the spheres of restaurant operations and maintain a steady track. Therefore implementing a robust POS system at your restaurant is of utmost importance.

POS systems provide central access via a unified dashboard that makes it easier for the restaurateurs to track all the information related to food and beverage sales. Tracking all the restaurant operations through a POS system prevents internal thefts. POS systems closely monitor the orders, inventory usage, and calculate if there have been any issues related to pilferages. 

Let’s look at how POS systems are efficient in solving the issues related to internal thefts and pilferages in the restaurant.  

1. Maintains a Steady Track Of Inventory Levels

POS systems readily keep tight control over the inventory levels to avoid any theft or pilferages. A standard feature in the POS systems is that it provides exact details about the stock levels at the beginning and end of the day. You can track the inventory consumption and check if there is any discrepancy between the ideal stock and physical stock. The information about the variance between the ideal and physical stock will help you keep a check on the inventory pilferages taking place in your restaurant.

protect internal thefts in restaurant

2. Tracks the Stock Requirements of different outlets

Restaurants chains having multiple outlets can control the movement of the stock from the base kitchen to each outlet with a stellar POS software. POS software displays information about the exact stock requirements of different outlets. It generates all the vital reports related to stock such as physical stock, stock entry, stock wastage, etc.

3. Notifies With Real-Time Alerts

Wouldn’t it be easy if restaurant operators could get immediate notifications about a potential theft happening at their restaurant during their absence? With smart POS software, it is possible!

A striking feature in the POS software is that it keeps track of the internal pilferage and sends real-time alerts signaling the restaurant operators about a possible case of internal theft. Based on the instant notifications, Restaurant operators can analyze the areas of risk and the staff involved.

4. Maintains Security

POS systems are most reliable when it comes to upholding the security of a restaurant. With POS systems, restaurant owners can keep their systems password protected and provide access rights to only a handful of staff. This prevents the restaurant employees from making changes in the bills. In case any discrepancies occur, the restaurant owners can easily identify employees who are involved in pilferages

5. Generates Real-Time Reports

POS systems generate detailed, insightful reports that help the restaurants in tracking the root cause behind the occurrence of internal thefts. You can view detailed sales reports and cross-check the total bills generated. Monitoring all the details specific to inventory requirements such as stock consumption, wastage, variance, etc. becomes more manageable with a restaurant POS software.

Bill wise reports help in identifying the bills that have undergone changes and edits. You can also avail detailed reports on KOTs(Kitchen Ordering Tickets) generated throughout the day and compare all the details. These reports provide a holistic view of the possibilities of even a slight wastage or internal pilferage happening at your restaurant. 

6. Employee Analysis

POS systems enable restaurateurs to keep a close check on the internal pilferage by monitoring employee actions with regard to bills and transactions. These systems provide complete details of the employees and, based on the sales they make, can easily track which employee is responsible for internal thefts.  

Internal thefts and pilferages are harmful to the long term success of a restaurant. To avoid the incidents of internal thefts and pilferages in your restaurant, identify the signs, and take a pragmatic approach towards resolving the issue. To know how POS software can help in preventing internal pilferage at your restaurant, Contact Us!

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Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


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