Bartender Theft—The Serious Business of Sleight of Hand

By Robert Plotkin

Left unchecked, employee theft can reduce cash flow to a trickle. How extensive is the problem? The international beverage auditing service, Bevinco, estimates that losses attributable to internal theft cost its clients on average 24-26% of gross sales. The very thought is enough to make seasoned managers wince and bar owners shudder.

Preventing it from happening though is far from easy. Bartenders typically work for long stretches of time without direct supervision and are afforded autonomy in handling guest transactions at the bar. Their position requires them to portion inventory, prepare drinks and collect sales proceeds, and they do it all before recording a single detail of the transaction into the operation’s point-of-sale. The result is a job laced with endless opportunities to rip off the house and its clientele.

Familiarity with how bartenders steal and knowing what to look for constitute management’s first line of defense. Sometimes theft is overt and undisguised, like pouring heavy shots to receive bigger tips, or stuffing cash sales directly into a tip jar. However, ploys like these are so easily detected they’re actually risky, so bartenders usually rely on less obvious schemes.

Examples of pocket-padding maneuvers include:
• SHORT-POURING — This classic maneuver is often used because it doesn’t negatively impact pour cost. Short-pouring involves a bartender under-portioning a series of drinks, creating a surplus of liquor to later sell, and pocket the proceeds. To ensure the shortages go unnoticed, drinks are prepared with the liquor poured on top of the mixer. Even if the guest stirs the drink, the first few sips will taste as usual, perhaps even stronger.
• SUBSTITUTIONS — Although a ploy with many different variations, it essentially involves preparing call drinks with a less expensive brand, yet still charging the guests premium prices. The bartender can then enter the sale at a well or call price, and pocket the cash difference.
• TAPPING UP — In theory, the outright theft of liquor should make a bar’s pour cost rise. To effectively negate its impact, a bartender need only replace the volume of liquor stolen by adding approximately an equal amount of water to the brands involved. Unless a hydrometer is handy, it’s difficult to detect the addition of a few ounces of water in a liter bottle of spirits.
• JUGGLING — This scheme involves a bartender collecting cash proceeds for drinks from two or more customers at once. At that point the bartender is free to, for example, enter only half of the transaction, deposit all of the collected cash in the till to be retrieved at a later, more opportune time.

 

Dropping Back on Defense

 

One reason why behind the bar schemes are so effective is that most bartenders conduct themselves professionally. Faced with the same opportunities to pad their income, they choose instead to look out for the best interests of the house, and perform their jobs sans a hidden agenda. Paradoxically, it’s the ethical behavior of the majority that thoroughly obscures the actions of the few, making it harder to diagnose the problem and root out its cause.

Implementing cost control procedures at the bar serves two purposes. Although primarily intended to eliminate operational areas of weakness, anti-theft measures also make it easier for honest bartenders to remain honest and harder for the others to operate undetected by establishing standards of conduct and clearly defining expectations. Few managers or bar owners want to acknowledge that their bartenders might be stealing from them. Implementing anti-theft measures will better ensure that they won’t need to.

Included among the tactics to consider are:
• PULLING CASH DRAWERS — Bartenders often stash stolen cash in their cash drawers. Closing out the POS immediately at the end of a shift and removing all of the cash drawers will force them to risk withdrawing the cash while people are still milling about, instead of the privacy of closing. Bartenders should also be prohibited from checking-out their own cash drawers for the same reason.
• TIP JARS — Bartenders should be prohibited from taking money out of their tip jars while on duty. If they’re padding the cash drawer with stolen funds, the money is all too easily retrieved under the pretense of making change.

• PHYSICAL AUDITS — Auditing a bar’s inventory is exclusively a management function. A bartender can take advantage of the opportunity by altering the results. Overstating the amount of liquor on-hand will essentially have the same effect as if the theft never occurred.
• BARTENDER PRODUCTIVITY — A bartender with consistently low sales per hour may indicate a serious problem. Explanations include making inferior drinks, having a bad attitude, or worse, stealing sales proceeds, each of which lower productivity.
• MONITORING PC — Tracking a bar’s ongoing cost percentages is another fundamental form of control. Not only does it reveal the operation’s level of profitability, pour cost is also helpful in detecting internal theft. Bartender theft causes pour cost to spike sharply and can provide the earliest warning that something is wrong.

 

 

Don't be Your Own Worst Enemy

 

Working for blowhards is a bummer. Caustic temperaments inevitably create toxic work environments, which in bars or restaurants, dissipate staff morale, undercut performance, and foster the conditions for theft. Is it a leap in logic to presume that bartenders might find it easier to rip-off a jerk of a boss?

Were there a set of commandments governing the conduct of owners, the tablets would certainly include the following.
• GET WITH THE PROGRAM — When the doors are open, rank has no privileges. An owner needs to think of himself as part of the crew and work within the established chain of command. Few utterances can derail constructive communication more effectively than the phrase, “As the owner, I think I have the right to...” Aside from stating the obvious, it’s typically followed by an emotional outburst. Especially when doors are open, rank has no privileges.
• LEAVE THE Lexus AT HOME — It’s a cruel fact, but most owners of bars and restaurants don’t live paycheck to paycheck like the rest of us. So how about leaving the Lexus at home and driving the family sedan when stopping by the bar or restaurant? Likewise, don’t hold the staff holiday party on your yacht or palatial estate. Flaunting your good fortune can spark negative consequences.
• REQUIRED SKILL SET — When the doors are open, an owner can usually only perform one invaluable function, namely schmoozing the guests. Like a virus in an organism, when the owner strolls into the place he or she is certain to attract attention from the staff, but shouldn’t that be lavished on the guests instead?
• HEAVY-HANDED COMP’ING — Doling out free drinks is expensive. It deprives the bar of sales, depletes product, increases liability, and more often than not results in the bartender getting stiffed on a tip. Owners looking to make a lasting impression should hand out cash instead.