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Beware: There's No Free Lunch

BRENTWOOD, CA, November 15, 2007----The new bartender in your favorite restaurant greets you with an outstretched glass of wine. "It's on the house!" she says. Isn't this a lovely example of Holiday cheer!

In actuality, it's a great example of how restaurant owners lose thousands of dollars annually to employee theft. Unfortunately, the bartender is most likely intent on lining her own pocket at the owners' expense.

How does giving away a glass of wine or other merchandise benefit the employee? More than likely, you will tip quite generously based on the value of that wine or dessert. The restaurant owner gets nothing, but the bartender or waiter may do better than if she sold the item.

Workplace theft is more prevalent during the holidays because restaurants are more crowded, and there are more seasonal hires who have little or no loyalty to their employers.

Cash transactions - which are prevalent in bars and restaurants - also tempt employees to steal. They can easily pocket cash sales without ringing them up. Unfortunately, management is so busy trying to handle large parties, banquets and a general increase in business that employees are often able to get away with it.

Dan Cosgrove, CEO of Mercantile Systems and an expert in preventing employee theft, has provided loss prevention consulting to restaurants and retailers for more than two decades. Cosgrove says that on one evening during the holidays, he spotted theft in five out of six premises he visited. The average during the holidays is 50 percent, compared to ten to 20 percent during the rest of the year.

Not only does theft eat into profits, but in neighborhood restaurants where margins are tight it may make the difference between staying in business or closing the doors. According to employee theft statistics released by the National Restaurant Association, these losses amount to about four percent of restaurant sales - enough to push many local restaurants into the red. (That was over $11 billion in 2004.)

As a customer, why should you care - and what should you do?

If you don't want your favorite local eatery forced out of business, there are ways you can help stop employee theft without insulting the integrity of honest workers. First, politely refuse anything offered for free unless you know the manager authorized it. Second, always ask for a receipt for anything you purchase. This is likely to insure that the item will be rung up. And finally, if you're convinced something dishonest may be going on, make a point of thanking the manager for the generous offer of something free from one of his employees. If he authorized it, he'll appreciate your gratitude. If he didn't, he'll be glad hear about it.

And if you are understandably feeling sympathy for hardworking, low-paid restaurant workers, consider this: if a restaurant is forced to close because of losses, all the workers - even the honest ones will be out of jobs.

We offer a range of resources on our site to help you manage your employee theft issues and protect your bottom line results, including: Employee Theft Programs, an employee theft case study and articles under the Information Spotlight on our site.


Hatti Hamlin
(925) 872-4328