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Monday, March 19, 2007

Signs of Theft

Some people can feel when they are getting ripped off by someone inside. Trust your gut. If you have a strong suspicion there is a thief the problem is probably already chronic. Set and bait the traps.

One of my first assignments involved catching two thieves with their hands in the cookie jar. The first suspect was the closing bartender and the second was the closing chef. My client was sure the food cost was out of control. He felt the bartender was guilty of treating his friends to expensive wine.

Prices on shrimp and crab were dropping steadily in this restaurant with a New Orleans themed menu. A new vendor had joined the competition and prices at the Fulton Seafood Market were trending lower. The food cost percentage was steadily climbing to an unacceptable level.

Portions were very straight forward for both of these key items. The popular Jambalaya called for 6 pieces of Shrimp 16/20. Crab meat was only used in crab cakes (1/4 pound per cake). The Micros 2700 POS system was programmed for two crab menu items - a single cake appetizer and a two cake entree portion. The Jambalaya was only available as an entree.

If you run into a period when vendors are discounting prices on high volume purchase items, food cost should be in decline. This poor performance could not be blamed on the market. I had the owner go count the crab and shrimp. He gave me the phone number of the modem hooked to his POS system and I installed the polling package on my computer.

Based on recent sales activity, there were plenty of shrimp for the weekend. The freezer had 5 blocks of 5 pounds each. Since we were out of crab, an order was placed for 20 pounds. So the available portions were 75 Jambalaya and 80 crab cakes. Sales counts for the weekend were 44 Jambalaya and 72 crab cakes (30 apps and 21 dinners). I called the owner on Monday morning and asked him to count the shrimp and crab. He reported no shrimp and 7 crab cakes in the freezer.

I prepared the report for him to use in the discussion with the chef. After being confronted with the numbers, the chef responded. He told the owner he had donated two blocks of shrimp to a popular local charity. The owner knew the president of the association personally and began to dial his number. The chef stopped him and admitted to the theft. He was replaced and the food cost fell in line.

There were zero sales recorded on the Micros for an expensive California Merlot (the entire week). A fresh case had only 5 bottles instead of 12. The bartender said his friend asked him to charge his account for the week. He drank one bottle a night on each night. The friend would come by soon once he cashed his paycheck. The owner let it fly. I protested but he said bar sales were way up since this person had started. His friend started paying and still drank his nightly bottle.


Anonymous said...

Another way to stop theft in your restaurant is to install a good state of the art remote digital video surveillance system, allowing the management/owners to view the restaurant over the internet.

Loss prevention is mostly about stopping people, not catching them. If your employees know that you review tour recordings or watch the restaurants during various key times of day, it will make it that much more difficult to steal. They will never know when you are watching or for how long.

This system will create a proactive psychological deterrent and in turn will create a much more profitable establishment.

Joe Dunbar said...

Robert has a great suggestion. I love these systems if used correctly. The loading dock, walkin cooler and freezer locations are my personal favorites.

Anonymous said...

Great post. I've also seen companies use the low-tech surveillance approach by just mounting a dummy camera dome in strategic locations ($20).

We market a product called the HandPunch which stops "time theft" via a biometric time clock credential. You think shrimp and wine are expensive, add up stolen time.

I have case studies on McDonald's & Dunkin Donuts if anyone is interested. We will also be at the NRA.

I really enjoy reading the blog - keep up the good writing...

James Grisham
Restaurant Solutions Manager

Harold Kaiser - FreePour Controls said...

In the bar, the technology available today offers restaurants and bars the tools to take inventory every day. Systems such as FreePour Controls interface to POS systems to provide daily snapshots comparing precise usage to sales. These systems create a cost conscious environment where daily accountability are the norm, allowing operators to recognize good performance and be pro-active on bad reports every day. The inevitable result is lower pour costs and increased revenue.

Joe Dunbar said...

Thanks for the interesting control tips! If anyone has some first hand knowledge of these systems, please feel free to contribute your experiences.

Restaurant Data Pros

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