One of the scariest things about fraud in the restaurant industry is that even the best policies and rules can be evaded by clever thieves. Too many people assume that internal controls or other checks and balances are enough to prevent theft, but locks only keep out honest thieves, which is why we built Avero Loss Prevention restaurant software, the fastest way to stop loss and deter future theft.
We’ve already told you about the Item Transfer and Check Reuse scams, so today we’re focusing on abusing voids or promotions in combination with transfers to pocket cash (the “Transfer” scam).
- How it works: A guest orders steak, a side of mashed potatoes and a beer. After his meal, the server presents his check and he pays with cash. In the POS, the server transfers the side item off the check to a new check. She closes the original check to cash in the correct amount for the steak and beer, while she pockets the cash for the side item. At the end of her shift, the server approaches the manager on duty to request authorization for a “Guest Complaint” promotion on the side item. She tells the manager that the guest complained that the mashed potatoes were cold and too salty. The server also says that the manager was too busy earlier in the shift when the complaint actually occurred, which is why she’s asking for the promo now.
- Why it works: The restaurant has taken a step in the right direction by requiring manager authorization for any voids or promotions. However, in the scenario described here, the manager has no way of confirming that the guest was actually dissatisfied with the item. The manager authorization control measure is only effective if the manager is notified while the guest is still in the restaurant; plus, it offers a great opportunity for service recovery before the guest has left unhappy. All too often, we hear the excuse that during busy shifts the managers can’t authorize every void or promotion, which opens the door for employees to take advantage because the manager can’t check on the table to make sure it was a legitimate request for void or promotion. When the server adds the complication of a split check or transferred item, or in some cases multiple transfers and splits to disguise the original check, it can be even more difficult for the manager to reconstruct the situation and figure out exactly what happened.
- How to uncover it: When you find examples of this behavior, look at the details for each transaction to see if you can validate or rationalize the reason for the transfers, and the reasons for the voids or promotions. It can also be helpful to reevaluate the policy for voids or promotions at your restaurant. If you can implement a system in which the servers need to notify the manager of any void or promotion before the guest leaves the restaurant, you are limiting the opportunity for theft to occur using this scam. Of course, internal controls are only helpful if they can be enforced, so before making any changes or re-training the staff, think about the best way to hold servers, bartenders and managers accountable for following the right procedures and policies.
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
- Cash Coupon scam
- VIP Comp scam
- POS Authorizing scam
- Tip Inflation scam
- Automatic Gratuity scam
