Controlling or Minimizing Bartender Theft

Here’s an important read for all you owners and operaters…

  • If you can, run the place yourself. This is by far the greatest deterrent/preventative. You’ve completely eliminated all opportunity. You can’t possibly steal from yourself… or can you? You can certainly mismanage a business and run it into the ground however. Let’s face it: a bartender stealing cash from an owner is a crime of opportunity. Bad management practices, bad policies and lack of enforcement have left the door open. Obviously, working solo is kind of impossible to do 100% of the time in most places.
  • Be realistic. Keep in mind that in a cash bar, other than a sole proprietorship described above, there is no way in hell you can completely eliminate theft – you can only minimize it; thus, the title of this article.
  • Alternatively, if you have several bartenders, occasionally drop behind the bar and do the bar tending yourself. Thieves hate confrontation or even the threat of confrontation. Bartenders will inexplicably be on their best behavior when authorities are nearby – go figure. If you don’t know how to bartend, and you’re a bar owner or responsible for its operations, shame on you. You really have no business being in charge. You’re in for a rude awakening one day. Your best defense against theft is knowledge – know what the hell you’re doing at a bar in the first place. If you have even the slightest hesitation, hire someone who does know what they’re doing or get the appropriate training and experience.  In a nut shell, be or hire a “Pit Boss.”
  • Spot checking. If you’ve read my Bartender Theft article, you’ll know that the most likely storage spot for misappropriated funds is the cash register. The easiest way to put a stop to it is to do frequent and irregularly scheduled spot checks. Swap draws mid-shift, “Z out” the bartender register in question and count your cash – problem solved.  Fire the offenders – easy.
  • Use spotters. There are a myriad of professional, high-quality spotting agencies in just about every major city. They are invaluable in, not only reporting on your bartenders, but reporting on your waiters, security staff, managers and all other front-of-the-house employees. They’re not limited to ratting out your employees. Their reports often detail things like décor, cleanliness, comfort, customer experience, food – the whole gamut. The better agencies will provide you an extremely detailed report on everything and everyone the night of their visit. Their “agents” or moles are just about always  seasoned bartenders. Be careful however, “seasoned” bartenders and/or thieves can easily “make” or spot these faux customers. Not to delve too deeply, but most spotters have a particular behavior, look and sometimes, an accompaniment of tools such as notepad, fake GF/BF, tell-tale questions, odd staring, odd disappearances, orders for obscure menu items, having only 1 or 2 drinks, etc. I’ll devote an entire article to spotting at some point soon.
  • Reconcile deliveries. If your bartenders have the responsibility of inventorying bar supplies and stock, make sure you’ve devised processes and procedures to scrutinize deliveries. I’ve seen instances of supposed kegs being delivered and charged to the business while those exact full kegs were carried right back out the door. In other situations, where processes are lax, staff can easily swipe bottles or even cases of booze. There are all kinds of scams regarding deliveries. Luckily for you, as I mentioned in other articles, you should be much more worried about cash thefts than inventory shenanigans. Consequently, your delivery men are much more likely to screw you intentionally or accidentally than your bartending staff is when it comes to supplies.
  • Be your own Chief Financial Officer, accountant, book keeper, etc. Believe it or not, there are situations where the person doing the finances is in collusion with unscrupulous bartenders or sometimes, managers, in “skimming” or misrepresenting the books of the business from either a revenue or gratuity perspectives.  Yep – for real.
  • Rotate your bar staff (note: your bartenders will hate you). Mix them up. Don’t let a particular crew work the same nights together for months or years on end. They will get extremely comfortable. Taking this further, just about every big club I’ve worked in or have known about periodically “cleans house” and pink slips every bartender on staff for a lot of the reasons I’ve previously talked about. Any barkeep you hire will “settle in” after a while, getting to know the ins and outs of your business model. I assure you, where there are gaps in your processes and procedures, keen employees will find and exploit them.
  • Inventory inefficiencies. In a tightly controlled and computerized bar, inventory exploitation is easy if your controls and maintenance procedures are lax. A few examples:
    • Your draft beer system kicks out 10 pitchers of foam every time a keg is changed. Guess what? Your bartenders will give tons of draft beer away and probably drink a whole lot themselves.  This is because they know it’s impossible to account for accurately.  Fix your gear man! Hire a consultant if you don’t know how. You’ll save yourself enormous amounts of cash long-term. It is likely that your kegs are warm (or being stored warm), your runs are not properly insulated, your runs are too long, the walk-in is misplaced in relation to the taps, or you’re buying crap beer from a crap distributor – end of story. 
    • Your P.O.S. system doesn’t properly account for commonly used/sold items and spills.  Let’s say you have a special, extremely high-volume, house drink that uses a double-shot of the house Tequila.  For a variety of reasons, it gets sent back quite often, particularly at the service bar, and it has become common practice not to account for those spills.  Guess which shots your bartenders will be giving away quite often?
    • Free-pouring. This one deserves a dedicated, lengthy article. I’ll just scratch the surface here. That 22 year old with the porn-star looks… the one that draws tons of male customers is a great business tactic on your part, ay? Too bad she’s pouring every drink as a double, dumps 2 out of 3 prep’d drinks because they’ve been made wrong, can remember to ring up only 2/3 of the drinks,  and ignores the 5 people at the other end of the bar who’ve been waiting 10 minutes to order. Just hire quality experienced people and you won’t have to worry too much about this issue.  There indeed are both experienced and attractive bartenders out there.  
    • Measured pourers, computerized pourers and measuring cups. These are all highly unprofessional and have no place in an experienced bartender’s employ in my opinion. Do they more accurately account for booze? Sure! But, they do so at a quite a price. They may allow you to sleep better at night but they look like shit. They belong only at the service bars of casinos. Again, just hire competent people.   
    • Regular bar Inventory. This is one of the most effective way of catching and reducing losses. If you’re not reconciling sales vs. inventory, you’re doing yourself a major disservice.
  • Hire quality bartenders and get rid of idiots. This is by far, the biggest efficiency or detriment to your greedy pockets. Hire experienced folks. Screen them. Call their references. Watch them in action where they currently work prior to hiring them. Give them a “guest bartender” or an evaluation shift with no guarantees of being hired. An experienced bartender will, not only have no fear of this offer; they’ll jump at the chance to show off! If someone balks, I’m guaranteeing you that they sucked badly and that you’re better off without them. Clearly, your front-of-the-house has to have personality, attractiveness to a degree and appeal. But, do not hire based strictly on appearance. Be professional and keep your wiener in your pants. 
  • Lock down your Point of Sale system.  Every single POS system has a backdoors that allow “technicians” and managers to circumvent controls.  If your bartenders find them, you’re likely in deep shit.  Most major POS vendors, POSItouch, Squierrel, Aloha, LEEBROS and Micros, have configurations provisioned by Access Control Lists.  Those ACLs are based on employee names (or objects) that are then assigned semi-permanant numbers in a back-end database. Managers always have physical access cards and in some cases, so do employees. Either way  Access Control Lists are broken down into Groups (another set of objects).  Those groups are then assigned specific access rights or are specifically denied from certain rights.  For example: A Group called “Managers” may have unrestricted ability to do whatever they please in the system, other than wiping out all databses.  Bob, Billie, and May (your managers) are members of this group.  Another group call “Bartenders,” can only ring in sales and run their own financial reports.  The Bartenders group is restricted from using certain buttons like No Sale, Transfer Checks.  This group is also restricted from viewing or modifying checks and tabs that don’t belong to them and from modifying any settings at all.  Pretty straight-forward, right?  The gaping hole comes in when you’ve set your system up so that a manager’s physical access card is not always required for managerial functions – it only requires their database object’s number.  That number is often only 3 or 4 digits and chosen manually.  Guess what eventually happens?  Folks who are not in the Managers group eventually gain access through a variety of means such as finding out those what those numbers are. NOTE: much like a “Club” or alarm on a car, locking down your P.O.S. is an initial deterrent to your average idiot.  The lock down will never prevent your determined, pissed off, crafty bartender from stealing.  
  • Buy good POS equipment.  I’ve worked in bars where every countermeasure the management took to curtail theft was easily defeated by a butter knife.  The butter knife could simply and quickly pop open the cash drawer.  In other bars, the cash drawers could easily be opened with a little bit of manipulation from a bar spoon through a small hole in a certain manufacturer’s model of cash drawers.  The holes were initially meant for accessories or for anchoring.  All it took was a little bit of studying the latch system of an open drawer with a flashlight once or twice.  
  • Treat your staff well.  Keep them happy.  It’s not hard to do.  All they want to do is make money.  If you throw up a dozen obstacles preventing them from doing so, it will all go sour on you.  A disgruntled bartender is a threat – a big problem to your business and cash flow.  You’ll have to weigh the pros and cons of restricting certain POS/register rights as going to far will severely hinder your bartenders in certain cases.  They’ll be pissed if they can’t do things like make change when they’re busy or somehow void items.  I can’t tell you for certain how to proceed here as every bar is different and needs to be evaluated independently.   There are many other things you can do to keep your staff happy; chief among them, allow them to make good money honestly by not over-staffing as well as sending excess bartenders home when it’s slow – something I’ve talked about previously. 
  • Use electronic surveillance.  Invest in a commercial quality system with multiple color, low-light, high-resolution, infrared cameras, multi-channel multiplexer, and high-capacity DVR.  Most systems these days have the MUX and DVR integrated into one component.  I would recommend you size it accordingly to cover every egress point, cash register, office and other “high value” areas.  Obviously, the greater capacity and redundancy, the more money you’re looking at laying out.  You get what you pay for.  I would also recommend sizing the system in order to keep at least 7 days of video on file.  One way to cut costs is to initially spend a little extra on motion sensing hardware.  Get high-quality cameras and use frame-rates that can provide clear motion video and still frames irrefutable still frames that would hold up in a court of law.  I can’t stress the importance of a good video system enough. If properly designed and implemented, it will cover your ass the first time something unexpected goes down – more than paying for itself.
  • Modernize your cash registers. Obviously, this effort scales or works differently with different kinds and sizes of bars. If you’re running a small pub, and are going for a certain old-world charm with vintage NCR mechanical cash machines, computerized Point of Sale systems are not going to work with your mission statement. They’re also kind of pointless (from a theft deterrent perspective) for an owner/bartender. That said, implementing P.O.S registers has very strong benefits – most of which outweigh the drawbacks in almost most places.

Benefits

    • Looks professional
    • Precise inventory control. This assumes that you’ve (1) categorized your stock accurately (2) ensured that your bartenders are ringing in drinks appropriately and (3) kept up with system, pricing and recipe maintenance. 
    • Remote and Centralized monitoring and reporting. Self-explanatory. You can see exactly what your numbers are in terms of revenue, income, inventory, gratuities, etc. all from a central workstation.
    • Near real-time reporting 
    • Encourages honesty
    • Well-designed systems will have highly visible external displays

Downside

    • Looks professional
    • Very high startup costs. You can always try to negotiate equipment and software licensing leases to minimize costs.
    • Requires infrastructure improvements and investment. You’ll need extensive network cabling, electrical upgrades, somewhere to host the servers (which will also necessitate supporting HVAC equipment).
    • Requires frequent maintenance and upgrades
    • Risk of failure. Yes, they do go down on occasion. It’s rare but it does happen. When they do go down, it always seems to be at the most inopportune times like a Saturday night at midnight when your place is jam packed with customers. You’ll need manual backup systems and rehearsed procedures if you’ve even half-way intelligent and want to keep your business up and running. The risk of loss/theft increases dramatically during an outage and increases exponentially if you haven’t implemented a Disaster Recovery plan. 
    • Information overload.  All that instant information can be overwhelming and addictive to review.  You can sit there watching your supposed “wealth” accumulate like an Atlantic City slot machine payout while your business is crumbling from your lack of management.  

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