On a regular basis, Avero brings you tips on how to detect and stop employee theft in restaurants. Some servers abuse coupons, some lie about clock-in and clock-out times, and others pocket tips that aren’t technically all theirs. This last problem currently manifests itself as the “Tip Deflation” scam, which is when a server pockets a direct tip on a credit card.
- How the scam works: A group of restaurant guests pay their check with both credit card AND cash. They leave the tip on the credit card portion of the receipt. The server transfers the tip from the credit card payment to the cash payment, and pockets some or all of that money while making it seem like they got a lower tip in the restaurant POS. The reason they do this is to avoid putting their tip into a pool and/or avoid having it taxed.
- Why the server gets away with it: The guests are none the wiser because the credit card amount doesn’t change, nor does the check amount change within the point of sale system. In this case the server isn’t even necessarily stealing from the restaurant itself, they’re stealing from their fellow servers, especially if the restaurant utilizes a tip pooling policy. Because the tip is directly on the credit card, it is not taxed and thus a larger amount, taking away from the group total that they would typically use for a tip pool.
- How to uncover the scam: Keep an eye on restaurant guest checks with two types of payments (i.e. cash and credit card, or cash and hotel room charge), and keep an even closer eye on servers who have a low tip percentage and servers with a low cash payment percentage.
Need a way to track employees with low tip and/or cash payment percentage? Get started with Avero today.
