IDENTIFYING AND RESOLVING BARTENDER THEFT

By Shawn Kiley

Let’s face it- no operator wants to think that one of your bar staff is stealing from you. Yet anyone who has managed a bar can tell you that bartender theft is a real problem and can create serious issues for your operation. Statistics show that the average shrinkage in the bar business is about 20% . Most bar staff are honest, hardworking people. But if just one dishonest bartender finds a way to take advantage of your systems, your costs will be unusually high month after month. Management must be consistently proactive when it comes to theft behind the bar and you must implement a strategy for containing the problem. To accomplish this, be sure to initiate specific measures to alleviate operational weaknesses which might exist behind the bar. By reducing the weakness in controls, and vulnerability to theft, it becomes increasingly harder for a dishonest member of your bar staff to steal. When consistently enforced, these management directives will quickly establish definitive guidelines for managing legitimate actions and conduct of the bar staff.

It is important to understand that management policies and procedures by themselves will not stop bartenders from stealing. For example, it should be the policy that it is expressly forbidden for an employee to leave the register’s cash drawer ajar between transactions. This directive alone will not necessarily stop it from happening. On the contrary, management policies and procedures pertaining to the bar are only effective if they are strictly enforced. All of the policies must be consistently and uniformly applied to all of the staff. Presuming that the staff are operating with strict compliance with the establishment’s set of directives is equal to inviting larceny and financial strangulation.

In many operations, bartenders are required to perform a check-out of their cash register drawer. This entails using the cash in the drawer to compile the bar’s operating bank for the following shift and to itemize remaining cash proceeds onto a deposit slip. If bartenders are stealing, this general procedure provides them an ideal opportunity to safely withdraw any stolen funds secretly deposited into the cash register drawer during the course of their shift. By taking this daily responsibility away from employees, management will effectively make it more difficult for bartenders to withdraw stolen proceeds from the cash register. It should be a policy that bartenders are never allowed to reconcile their drawers or banks at the end of the shift. 

Here are some red flags to watch for in your operation:

Heavy Use of “Open Liquor” Keys. Many bars have a good POS. system that has a pre-assigned key for each type of drink that the bar sells. Even these systems, however, often have an OPEN LIQUOR key that the bartender uses for special drink requests or items that don’t have a pre-assigned key. A dishonest bartender will often use this key extensively. That way, he can sell drinks to his friends for much cheaper than the price list. Some bartenders will also employ the age-old trick of charging customers full price, but ringing in a discounted price. The open liquor key makes this very easy to accomplish and hard for the owner to be sure of (even if you catch the bartender keying a drink at the wrong price the culprit will simply claim ignorance of the proper key to use).

You find Happy Hour drinks rung in during non-Happy Hour times:

This is another way for bartenders to charge your customers full price and ring in less. Using happy hour pricing, this form of theft is especially profitable. Consider the case where highballs are usually $6 but are half that during the happy hour. If the bartender gets an order for a highball at 8 p.m., he can charge the customer $6 but ring in the drink at happy hour pricing. Your bartender then makes a clear profit of $3 per drink (probably more than you do). You should periodically check your journal tape to see if any happy hour drinks have been ring in at the wrong time.

Your cash is often over:

A well-run bar will always insist that the bartenders keep their tips separate from the cash. You will also ensure that the cash is counted by someone other than the bartender. Bartenders that are stealing from the bar will usually attempt to hide their dishonest practice by putting receipts and tips into the register drawer. Then, at the end of their shift, they will remove the money that they stole from the till. On a busy night, however, the bartender is usually never 100% sure how much he stole. Rather than risk the chance of a shortage, the dishonest bartender will underestimate his “take.”  Thus, your cash count will often show significant overages.

Here are some steps you can take immediately to help plug the leaks:

• Have regular bar meetings to discuss policies and expectations.
• If you do not have a bar manager, make certain that your dining room manager spends time behind the bar regularly.
• Perform periodic cash drawer audits when there are two or more bartenders working and it’s slow enough to pull a drawer and run a tape.
• Only one cash drawer per bartender. Never allow bartenders to access each others’ cash drawers.
• Establish an acceptable window for cash overages/shortages.  Treat all discrepancies the same whether they are short or over.  Have clear expectations in place for disciplinary measures and enforce them consistently. If a bartender is regularly off by more than a dollar or two, then they either need retraining or they need to find another job.
• All cash tips should be put into a jar as they are received.
• Start utilizing a “spill sheet” every shift to account for anything that was poured but not sold.
• Track all comps. Require that all comps be rung up and signed off by a manager.  Set a reasonable comp limit and require all bartenders to stay within that limit.
• Review your POS system.  Do you have a pole display that can be easily read by your customers? Is your screen in plain view?  Are you consistently reviewing cash handling procedures with your bar staff?  Do they know the expectations of using the POS system?
• Review your inventory procedures.  Do you require daily “pull sheets” or requisitions to be signed off by management?  Do you trouble shoot your weekly/monthly bar  inventories?
• Create incentives as a part of a regular mystery shopping program. Make sure that your staff is aware of the expectations and is rewarded for having a perfect or near perfect report.

Don’t forget that it is your responsibility to hold your staff accountable for what they do when they are behind the bar.  When the expectations are clear and there is consistent follow-through, your staff will begin to respond accordingly. If your policies are strictly enforced, the dishonest bartender will stand out like a sore thumb. Most people are honest and want to do the right thing. Provide the setting and environment for your staff to be honest and most of them will fulfill your expectations.

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