Costs associated with employee theft in the restaurant industry are estimated at $3 to $6 billion. When we think about theft in the restaurant industry, we think mostly of employees stealing from the restaurant – pocketing cash that should go in the cash register, taking food or drink without payment, giving free food or drink to family or friends — but employees can also steal directly from guests.
The “Auto Gratuity Abuse” scam involves employees taking advantage of service charges and other automatic fees to steal from guests. There are many costly implications if employees are defrauding your guests, including significant damage to your reputation, which is why we built Avero Loss Prevention restaurant software to automatically detect theft and prevent future fraud.
- How it works: A guest at a resort hotel orders an iced tea at the pool bar. There is an automatic charge added to the check, per resort policy. She drinks the beverage, signs the check to her room number and leaves. The bartender goes into the POS system and adds an additional $1 tip to the check before closing it out to her room charge.
- Why it works: In resort environments, when guests are typically staying for more than a few days, they are less likely to notice a few dollars extra on one transaction. When the guest checks out of the hotel, she sees one line item on her bill for F&B purchases, and isn’t likely to manually reconcile each copy of restaurant/bar check to make sure the total is correct. Especially when there is a service charge, auto-gratuity or resort fee on every check, a guest may dismiss an extra dollar here or there. The same type of situation is common on hotel room service bills, where there is often a service charge in addition to a delivery fee.
- How to uncover it: Look for employees with higher than normal tips and investigate specific examples. If you see a transaction with a very high tip in in addition to the standard charge, is it possible that the bartender gave away an extra round of drinks in return for a higher tip without ringing in the drinks in the POS system?
Don’t have time for all that manual work? Avero Loss Prevention can do it automatically, helping you improve your restaurant profits. Learn more and get started today, and check out other common restaurant fraud scams:
- Item Transfer scam
- Check Reuse scam
- Transfer scam
- Cash Coupon abuse
- VIP Comp scam
- POS Authorization scam
- Tip Inflation scam
