Let the shitstorm begin.
I don’t think there is a topic more, how shall we say, “energizing,” from an owner/manager perspective, than theft. Put bluntly, it’s the bleeding that you can never stop. You can only cauterize the wounds in a sense.
Any halfwit putting together a business plan must account for losses. Personally I’d estimate about 20%. Holy crap! That’s a hell of a lot of loss! Yes – but not uncommon. There are all kinds of losses – the most significant, in order,being (1) employee theft and (2) spoilage (3) vendor/customer theft. Today, let’s address bartender shenanigans shall we? There’s a ton of information on the Interwebz regarding theft . However, most of it is from an owner’s perspective or some sort of training/knowledge-share in the form of commercial loss prevention. What you just about never hear, is the truth about stealing from an insider’s point of view – a bartender in the trenches.
Giving the House Away
At the bar, there are buybacks, and then there are buybacks. What do I mean? Imagine you have Randy the semi-regular. Let’s say he comes in 4 nights a week and has 4 or 5 drinks. He’s respectful, funny and tips maybe 20 – 25%. So you buy him his 3rd or 4th drink. The house is stil making money obviously especially if Randy’s been upsold and has bought extras like food. Furthermore, he comes there all the time so the loss gap narrows. Randy tips you 35%. Like a good little worker bee and ladder climber, you account for all of your bar freebies on your comp check. During downtime, you pay him more attention than you would your average Joe due to his regular generosity. All is well with the universe.
Then you have Kim the conquerer. She’s a socialite. She’s impossibly well dressed, manicured and “maquillage’d.” To boot, she’s in her 20′s, insanely hot and is a trust-fund baby. She’s also a massive flirt and has become increasingly forward with you in particular. She’s descended from a long line of a certain potato, Guiness, and whiskey loving clan, one that originally hails from an obscure island to the West of, and once entirely controlled by, Britain. Anywho, when dudes aren’t buying her drinks, she often orders a couple of shots and a couple of beers. On a tab of $30, she’s known to tip you $30. As a result of her lining your pocket directly, and indirectly by drawing and keeping a hopeful set of John’s at the bar, you slowly start to charge her less and less. Many times, you wind up charging her for 1 drink on several or you find yourself charging her nothing at all. Over weeks/months, her tipping, not surprisingly, correspondingly increases. She’s known to drop $50 or more on you in gratuities every time she comes in – money that never hits the businesses bottom line.
While the Randy example is clearly regular business practice, the Kim example enters into that grey area. Question most bartenders about the Kim scenario and they’re likely to defend their actions and tell you this practice is normal, indirectly makes them lots of money and benefits the house in the broader sense. Ask owners/managers, and I’ll bet that the majority view this scenario as blatant theft. They’d also be likely to act accordingly – whether that means light disciplinary action, firing or even pressing charges. The minority of owners/managers either turn a blind eye or shrug it off. This latter group in my experience tend to be those who’ve actually worked front-of-the-house and are very in touch with their operations management. Revisiting my rationale in article Drinking On The Job, the reality is that in time, most replacement barstaff will eventually develop the same or similar practices.
Blatent Theft of Funds
Yeah – it happens. This is the primary reason that in most big clubs, management will periodically fire all or most of their bartenders. As I’ve alluded to, it is because after several weeks/months/years, some bartenders have become so comfortable, complacent or bold, that they develop entitlement syndrome, to an extent, regarding pocketing money. To boot, once the practice is started, they often believe they will never get caught and it becomes a habit; they’re now numb to the process. In few places, that may hold true. However, in the overwhelming majority of bars, they eventually get busted and suffer the consequences.
How does it work? It almost always involves cash transactions not credit sales. Money charged for a round of drinks simply does not get rung up – simple as that. There are a variety of schemes for physically getting the cash from Joe Customer to one’s pocket or tip jar. It’s not difficult. I’ve seen countless bartenders do it in a myriad of ways. The most common method involves (1) taking cash from a guest for a round of drinks, telling him/her it’s $x, then (2) ringing in $y – a lesser amount. Money is placed in the register for later retrieval either at a few intervals throughout the evening or at tip counting time. In 99.9% of cases, customers are oblivious to what’s happening nor do they care, unless you’re a spotter of some sort.
Furthermore, the busier the bar happens to be, the easier it will be for your bar staff to pocket illegitimate cash. Typically, if the bar is three-deep, the service bar printer is down to the ground, the beats are thumpin’ – basically, peak volume, bartenders can “appear” to be severely weeded or “overwhelmed.” They may be able to handle the volume accordingly but may sometimes flout certain rules/conventions such as “one drinke, one ring” that most establishments attempt to enforce. You may find your bartender trying to be as “efficient” as possible laying cash aside for a round of drinks while two or three cocktail servers are hounding him for their drinks over by the Service Bar. At times, he/she may have the best intentions and plan to ring up the round after handling the immediate volume. At other times, it’s simply a ruse to obfuscate what’s really about to happen: that is, depositing the cash directly in the tip jar. If you have several experienced bartenders simultaneously in a similar situation, another barkeep may simply snatch that cash for tips as well. It can often be an unspoken agreement – a nod or intentionally looking away may be sufficient. In any case, there is a linear relationship between the ease with which these illicit activities take place, and bar volume and party atmosphere. For many an owner or manager, it can be extremely difficult to pinpoint. Spotters/shoppers (usually veteran bartenders) are usually – but not always – adept at this game.
For many of these reasons stated above, in P.O.S. provisioned bars, the “No Sale” function or keyed cash drawer access is usually disabled for bartenders – requiring a manager to open the drawer (does not apply to N.C.R. provisioned bars). Now here’s the rub on that disabling: It does not prevent bartenders from stealing cash. It simply pisses them off as they frequently need to legitimately make change. Besides, they can and sometimes will bypass the drawer entirely if they’re determined and/or bitter enough. They will find other ways to open the till when needed – I assure you:
- Ringing in a ridiculously low priced modifier (e.g., $.50 syrup shot for coffee, etc.) will get the job done.
- Ringing in a cheap/common drink (such as one beer) that is not paid for. The bartender will keep a mental note and under-ring the next available transaction to make up the difference.
- Many steel drawers are worn and/or have design flaws that allow them to be “popped” open with a simple butter knife or bottle popper. This is a common flaw.
- Many, but not all, cash drawers have another major design flaw. A number of them have a couple of small, pre-punched holes on top. I believe they’re intended for under the counter mounting. It’s trivial to stick a bar spoon handle in there and manipulate the spring/arm mechanism which is normally pushed by a magnetic actuator.
- Bartenders will sometimes exploit poorly architected P.O.S. systems using managers cards or numbers, or access intended for maintenance technicians.
Even in heavily scrutinized bars with high-tech cameras, Johnny-on-the-spot bar managers, security staff and spotters, it’s ridiculously easy to steal cash. Well practiced thieves can not only elude the watchful eye of professional spotters, but can spot the spotters themselves! Owners have variety of tools to combat this money sucking practice, not limited to law enforcement. Here’s a well written article on the topic. It has an owner’s slant obviously. Most of the recommendations are insightful but some are retarded. Applicability will vary depending on type and scale of establishment. Read it with a grain of salt.
Spotters – they require a dedicated article which I promise I’ll get to at some point. There is so much to say about them! In the interim, Eye Spy Spotter Services, Inc., a popular Arizona based spotting service, has a blog with sample spotter reports that at times is absolutely brilliant hilarity (if not an alarming wake-up call) if you’re a bartender. If you’re a naive owner/manager, it will have you crying, induce bulging veins and sweats, and/or running around implementing all kinds of new security procedures. The reports are often spot on from my experience but you probably know all this stuff already being in the business, right?
I remember years ago working with one dude in particular – a tall guy, not much bartending experience, but extremely happy, energetic and eager. From day-1 behind the bar, even on a night with let’s say 100 covers, he’d be walking with $600 while at a similar bar, with similar circumstances, another buddy of mine would walk with $200. On a very busy night, the illegitimate take would be far higher. What really should worry management, is when/if several or all the barstaff are in cahoots with the sticky fingers. It can cost a business hundreds of thousands of dollars a year depending on scale – yikes!
A bunch of the spotting companies and so called “loss prevention specialists” or “bar consultants” will often point out other schemes like:
- Short Pouring: This is an idea that bartenders short the customers liquor orders a small mount (1/4 – 1/2 oz), keep mental notes of the inventory difference, then “sell” off an accumulated shot and pocket the cash. There are very, very few bars that accurately account for inventory and even fewer that employ those ridiculous, costly, and inaccurate electronic pour spots. The reality, in NYC anyway, is that bartenders simply don’t have the time or patience to steal via Short Pouring. It’s far too busy and there are much more efficient means theft.
- Substitution Theft: Refers to charging a customer for Call, Premium or Top-Shelf booze but actually pouring lesser quality spirits like Well/Rail. Again, in NYC, I call bullshit. This may work in hidden service bars but in this town, that simply doesn’t fly as (1) you’re really friggin busy (2) F.O.H. barkeeps are making drinks directly in front of customers and cannot get away with it and (3) again, simply not ringing up cash sales, is a much more efficient way of stealing.
Note on credit card theft… It’s very rare for theft to occur this way because it’s documented and bartenders are much more likely to get busted. Credit card vouchers are reviewed by managers, back-office operations, and processing companies. No one wants a paper trail detailing their illicit activities. It does happen, just infrequently. The scam typically involves charging someone’s credit card more than what’s on the bill or scribbled for a tip. The temptation is more often a result of being undertipped than outright egregious stealing attempts. Often, the situation occurs with under-tipping/no-tipping Europeans and drunks who scribble something unintelligible or don’t sign parts of their bill if at all. Again, things are documented particularly with regard to AMEX (they scan the signed voucher). Screwing around in this fashion can and will come back to haunt you either via chargebacks to the establishment and shit-rolls-down-hill disciplinary action or even law enforcement actions.
Note on Skimmers… At this point, I think we’ve all seen enough news reports and Mafia movies regarding credit card skimmers. For the few who haven’t, skimmers are small battery operated devices that read and record credit card information for later use. Some unscrupulous front-of-the-house staff will on the sneak swipe your card on the device as well as charge it normally unbeknownst to you. The bar/restaurant staff are not interested in the information themselves in most cases. Rather, they’ve been approached and contracted by shady characters that promise them something like a few hundred bucks for a device full of credit card numbers nightly. The information is then used to either (1) create bogus but functional duplicate credit cards or (2) order merchandise to a “drop spot” for resale on the black market at substantial discounts – usually half-price. Those shady characters are often low-level dudes tied to some form of organized crime – nuf said.
The reality is that 99.9% of businesses you frequent are not going to employ skimmers so you really don’t have much to worry about. Furthermore, the law, even for debit cards in most cases, is that you’re limited in terms of your exposure to fraudulent charges. I believe the number currently is $50. Therefore, it behooves you to occassionaly review your bank statement. If you notice any untoward charges, call your bank. They’ll probably advise you to submit a Form E documenting the suspected theft.
The best way to protect yourself from skimmers is obviously to use cash. If you must use a credit card (the norm) and are a conspiracy theorist regarding skimming, just carefully watch the bartender.
A Thumb on the Scale
Here’s the bartending equivalent… The issue often takes place when large bar tabs abound. Some unscrupulous bartenders have been known to “pad” large tabs. That is, they’ll surreptitiously add drinks/food to big bar tabs to “get rid of them.”
You work a 10 hour shift straight. You’ve got the munchies, right? You’ve had a falling out with the kitchen staff and they won’t give you a damned thing without a dupe (printer receipt). The dupe has to be accounted for at the end of the night in the computer system – must be paid, voided, etc. Your BFF is at the bar and you don’t want to have him/her pay a dime for all those Cosmo’s do you? Big Brother in the sky is watching you like a hawk , ensuring you ring in every single drink. What’s a shady bartender to do? That’s right, put it on the Goldman Sachs dude’s black AMEX that’s already rung up $1,447.76 in drinks and food for his department’s’ happy hour. They’ll never notice – problem solved, eh?
Like cops, the overwhelming majority of bartenders are honest and will keep an honest tab. However, this padding situation does happen. As a customer, the best way to avoid it is observe the bartender updating the tab with each and every round or food order and placing it in front of you. Scrutinize the breakdown on the bill when you get it. If you receive a credit card voucher without the breakdown of what exactly you’ve supposedly had, that should raise a red flag straight away. Even if nothing underhanded is going on, the appearance is there and that’s hugely unprofessional. Every voucher must be accompanied by the breakdown – period. If you don’t receive it, demand it and refuse to sign.
By the way, the majority of busy bars these days, neglecting small, old-man or neighborhood Irish pubs, are computerized in just about every way. The primary reasons are for accounting, inventory, loss prevention (or at least an attempt at it), and tax purposes. Furthermore, computerized Point Of Sale systems tend to make it harder, sometimes, for bartenders to steal; they don’t make it impossible however. As an owner, the last thing you want as a bar owner is the appearance of impropriety which, right or wrong, lack of computerization screams out. Cash businesses make it far too easy to hide revenue and subsequently cheat the tax man of his due – something those pubs mentioned above, using old school NCR mechanical registers, are notorious for doing. Big Brother has caught on over the years and will sometimes scrutinize and harass your ass for it unnecessarily.
This is in reference to inventory mysteriously growing legs – items such as whole bottles (or cases), boxes of burgers, cases of beer or even kegs! In my experience, this is a very minor concern. Does it happen? Sure, but it’s rare. I know of busy spots that have Security/Doormen inspect every employee and their bags/belongings at checkpoints as the leave for the night. But sometimes, these folks are in on the scheme as well. It’s a never-ending battle and concern for management. They have to be vigilant in order to minimize (not eliminate) stealing.
I’ve witnessed kitchen staff hauling away cases of expensive shrimp, multiple cases of beer, and all kinds of other goodies. Again, this is rare. Bartenders in particular are much more interested in hauling away fat stacks of cash, in anyway they can, and giving away booze than sneaking out with your odd bottle of vodka or scotch. It’s not worthwhile.
Owners/Managers – the best ways to minimize theft are (1) employ procedures that create an environment that is difficult to pull off stealing and most importantly (2) to not piss off your cash handlers! Duh. You’d be surprised how many people don’t get these simple concepts. An angry, disgruntled cash handler is a huge liability regardless of your controls. This philosophy, in my opinion, extends well beyond the service industry to ordinary business but let’s keep focused, ay?
Treat your barstaff well and you’re far less likely to spend your nights bleary eyed, worried sick about 5-finger madness. Allow them to make a decent amount of money through a well promoted, well frequented bar. Bartenders drink. Deal with it. Accept it. Heck, celebrate it. Have a shot with them. There is no way in hell you can stop it, so you might as well them do it openly and have some control over it.
Don’t get all stingy and retarded with no buybacks or an inappropriately low comp amount. Drinks will get given away on a scale relative to sales and tips regardless. So, you might as well allow them to account for it. Schedule barstaff appropriately through a combination of seniority, skill, speed, following, appropriate attractiveness/following, and anticipated business. When it’s slow, cut your staff - send people home. This is crucial. A bartender would much rather make his evening behind the bar profitable than not obviously. Otherwise, we’d all like to be able to go out somewhere ourselves, enjoy our evening, study for tomorrow’s mid-terms, or get enough sleep for our day jobs or whatever is looming the next morning. Few things are more enraging in a bartender’s eyes than an overstaffed bar and the resultant standing around not making money due to an out of touch bar manager who thinks it’s “busy” or we’re going to “get slammed” when that is not the case. If you really want more insight as to why bartenders steal, read this article.
Also, head on over to my followup article for a few pointers on firming up your boats’ leaks.