Theft Thursdays: The Cash Coupon Abuse Scam

At Avero we hear a lot about operators looking through individual checks or setting up check alerts as a way to find fraud in their restaurant or bar. While that can be a great way to find extremely suspicious behavior, there are huge benefits to analyzing patterns in behavior over time in order to identify potential employee fraud, which is why we built Avero Loss Prevention to automatically detect theft and prevent future fraud.

As we enter into the holiday season, a time when restaurants are busy and there can be more special promotions than normal, it’s important to be aware of abuse of voids and promotions on cash checks, and watch for it in your restaurant.

• How it works: A guest dines at a restaurant and pays with cash. After the guest has paid, the server redeems a coupon (or a void or promotion) and pockets the cash for the coupon amount.
• Why it works: Coupons and promotions are a big part of the restaurant industry today, especially with the proliferation of daily deal companies and increased attention on loyalty rewards programs. But these daily deals and other coupons are often an area of opportunity for employees looking to steal. If a restaurant runs a promotion in a local paper where the guest simply needs to show their ID with a local address and they will receive 10% off their meal, and it’s just up to the server to verify the ID and then apply the coupon to the check, there are very few checks and balances to make sure the guest actually was a local requesting the discount. With a paper coupon that’s actually redeemed, sometimes restaurants will staple the copy of the coupon to the check and reconcile the paper coupons with POS redemptions at the end of the night, but what’s to keep the crafty server from bringing in her own copies of coupons and redeeming them to pocket the cash?
• How to uncover it: The best way to uncover this type of behavior is not through single check alerts — you could set up an alert for every time a coupon is redeemed, but then you could be left sorting through hundreds of checks, a process that is certainly not effective or scalable — but to look at patterns over time. For example with that local discount promotion, is there one server who redeems that coupon more often than her co-workers? Is there a logical reason why her behavior would be different from her peers? Identifying statistical outliers is the best way to find the little behaviors that could be cutting into your profits, and the only sure way to find the $5.00 that might be walking out your door every single day, adding up over time.