Preventing Bartender Theft

Bartender theft in today’s bars and restaurants is a huge problem. Dishonest bartenders rip off a huge amount of money from the bar owners, as well as their customers, and the problem is not getting any better.

So, how can you prevent bartender theft? Regular and accurate inventories are a start. Cameras, the latest POS Systems, and pre-employment hiring practices have the most positive effect in eliminated bartender theft.

The statistics out there on bartender theft are frightening. It is estimated that bars and restaurants lose around 20% of their gross profit due to internal theft. That’s not good, and bar owners are constantly trying to find new ways to eliminate every conceivable type of theft.

Liquor is cash. Make no mistake, the liquor that a bar pours is their lifeblood. Acceptable profit levels are the only thing keeping the bar in business.

First, you have to determine if you have a problem. Are you taking regular inventory? Are your liquor cost and gross profit well below the industry standard? Preventing bartender theft can be tricky – make sure you’re looking in the right areas.

Make sure your pouring procedures and pricing methods are designed to provide an acceptable profit. From there, it’s just a matter of monitoring your staff to make sure that they’re following the proper rules and policies.

Do You Suspect Your Bartenders are Stealing?

There are many things that can happen to arouse your suspicion. I have listed below a few examples. If you notice any of the following discrepancies – you probably have a theft problem.

1. Bartender’s Till is Consistently Over or Under

It’s the end of the night, or shift, and the bartender is totaling all of his cash and receipts. You, the manager, have taken a ‘Z’ reading, and now have all of the numbers.

The till is $40.00 over. This seems to happen quite often. What happened? Well, it could be a number of things that caused this. Maybe the bartender took a $50 bill and thought it was a five. Unlikely. Maybe a transaction wasn’t recorded sometime during the shift. Possibly. Maybe the bartender is just lousy with money. Any number of things could have happened.

The point here is that things just aren’t adding up. Has this happened before? Is this particular bartender always over or short? If this situation pops up consistently – you have a problem and need to dig deeper.

2. Liquor Cost is Going Up

You, the bar manager, notice that the liquor cost is steadily going up. This has been happening over the last few months, and, coincidentally, it started when you hired that new bartender a few months back..

This is a huge red flag, and you’re going to have to figure this out. Be aware that it may not be the new bartender that is responsible for this increase in pouring cost. You can learn how to calculate liquor costs here.

Many times, your current, long-term bartenders take the opportunity to steal because they believe that the new bartender will take the heat. Again, it’s time the bar manager takes a closer look at what’s really going on.

Liquor cost abnormalities are the #1 reason to suspect that there is theft going on behind the bar. If management is not conducting regular inventories – it’s a gold mine for dishonest bartenders.

3. Bartender Using Methods to ‘Count?’

Look closely around the bartender’s station. Is there a number of olives, or lemon twists, in a pile somewhere? How about straws? Does the bartender have an additional tip jar with coins only?

These are methods used by dishonest bartenders to ‘count’ how many times they have hit the ‘no sale’ button, or under-poured a drink, or even over-poured liquor.

The process is simple. Count up the times you have taken some sort of devious action – and then take out that cash from the till at the end of the night. This is where running an ‘X” reading at any time during the night, pulling the cash drawer, and replacing it with a fresh one will pay dividends.

Most likely, the drawer will be ‘over’ because the bartender has not had time to remove all of that extra cash. This is one procedure that bar managers should perform on a regular basis – to keep honest bartenders honest.

4. Missing Inventory

Didn’t you just bring out six bottles of house vodka to replace those used during the previous day? Why are there only five on the shelf? Many bartenders will simply steal a bottle of liquor by walking out the door at the end of their shift with the bottle hidden in their winter clothing.

This happens more often than you would think, and can involve not just liquor. Bottles of wine, condiments, food, etc., are all susceptible to theft. Employee only areas and cameras can help alleviate this problem. And, you better have a lock on your liquor room.

5. Customer Complaints

Do customers regularly complain about one of your bartenders? Short-changing, picking up change off the bar, and short-pouring are common complaints from bar customers.

Is it happening with only one of your bartenders? If so, you probably have a problem somewhere. Keep in mind that many bartenders are on the same page – working together. Sharing different ways to rip off the house, and customers, is not uncommon in the bar business.

The above five methods are some of the most common indicators of bartender theft. Experienced bar owners and managers are, generally speaking, pretty good at sniffing out the dishonest bartenders by monitoring the above on a regular basis.

It’s not foolproof. The pre-employment hiring process is probably the most effective way of eliminating most bartender theft. Let’s now look at some very effective ways of eliminating bartender theft.

20 Ways to Prevent Bartender Theft

Below are twenty ways to prevent bartender theft. There are more, of course, but these 20 only will have a tremendous impact on the Bar Owner’s bottom line.

 1. It all starts with the hiring process

Check those references. Yes, really check them. There are some laws these days that prevent bar owners from really getting into the finer details of someone’s previous employment, but there is much you can do to check and verify what’s on a potential bartender’s resume.

This is the #1 way to prevent or minimize bartender theft. The interviewer should ask questions like “Are you aware of how liquor cost is computed?” The bar manager should also point out that there is zero-tolerance for theft, drinking on the job, or failing to account for/write down all transactions.

2. Utilize a Modern POS System

Please, purchase a new, up-to-date POS System. One that can account for all transactions, is easy to use, and has built-in modifier keys to record everything properly.

Train your new bartenders on the system. There should be no excuse for “I didn’t know how to ring that in.”

3. Conduct Regular Inventory

If you’re not performing regular inventories, you deserve what you get. It’s that simple. Regular inventories, at least once a month, will allow you to notice any abnormalities in your pouring cost.

Make no mistake – bartenders know whether or not inventories are being taken – and when. Many times, it may be necessary to take inventory once a week to identify any problems. I have worked at places before that had such a major theft problem that the managers were required to take an inventory every single day!

There are many different systems to aid in taking an accurate inventory. It kind of depends upon your POS System, but the important thing to remember is to take one!

4. Spot-Check Your Bartenders

This is an easy way to keep bartenders honest and aware. Most bars will never even think of doing this – or the bar managers are too lazy.

Here’s one example of how you can use this method of spot checking your bartenders to cut down on theft:

You know that a regular customer is sitting at the bar between 7:00 and 9:00 every night. He drinks Bombay and tonic. Another customer comes in on Tuesdays, roughly the same time period, and drinks Cutty Sark on the rocks.

Before the bartenders shift, take an inventory on Bombay and Cutty. Take an inventory of all bottles of these two liquors that are behind the bar, at all stations, and in the liquor room. Make sure you count what’s left in partially used bottles.

At the end of the shift, see what the bartender has rung up for these two items. Yes, there will be other people that drink this type of liquor – but that’s OK.

Take an inventory at the end of the night, check your register receipts, and see if the bartender’s register numbers match up with the inventory.

You’ll be able to tell rather quickly if you have a problem. Alternate many different types of liquor for each spot check – for each night you do this so the bartenders don’t catch on. Never announce when you’re going to use this technique.

5. Hire Outside Investigators

Sometimes called ‘Spotters’ or ‘Mystery Shoppers,’ these are usually 3rd parties that the bar hires to come in and observe the employees. I’m not a big fan of this type of ‘spying,’ but it can be beneficial. If the budget permits it – go for it.

The advantage of mystery shoppers is that they’re usually very experienced – and probably ex-bartenders and servers. They know what to look for, and if management gives them a set list of things to look for, the results can be informative.

6. Install Security Cameras

This goes without saying. Almost every bar now has security cameras installed inside and out. Installing an additional camera pointing at your liquor room and other storage areas might be a good idea.

Please, have a camera pointed at your back door. Inventory walking out the backdoor is common, and if your employees know that you’re monitoring all entrance and exit areas – you’re golden.

7. There Must Be Consequences

One strike and you’re out. Never tolerate theft, and employees must be very well aware of the consequences. No exceptions.

Should you file charges when there’s theft involved? Maybe. Theft is theft, and management will have to make the call. Personally, if someone was outright stealing inventory, I would seriously consider filing charges. Giving out free drinks – probably not.

8. There’s a Reason for Locks

There’s no reason to leave rooms and cabinets unlocked. Especially liquor, beer, and wine storage areas. Sturdy locks are a must, and they ‘keep honest people honest.’

During open hours, of course, liquor cabinets, beer coolers, and supply shelves behind the bar must be kept unlocked for efficiency sake. Once shifts are over, or the bar closes, lock everything up.

9. The Work Environment

Get rid of apathetic management. If the bar manager and shift leaders have that “I don’t care” attitude – you’re sunk. There’s probably a lot of drinking going on – and theft.

If employees know that management takes liquor cost and profitability seriously – they’re more apt to adhere to policy. Maintaining a positive work environment goes a long way in preventing theft.

10. Establish Tip Jar Rules

Are the bartenders making change out of their tip jars? Do they have more than one tip jar? This can cause problems. Dishonest bartenders will sometimes bypass the cash register and simply throw that $20 bill in their tip jar and give the customer $4 in change.

This is blatant theft. Although a bit unusual these days, there are still some bartenders that use this method to rip off the house. Easy to detect – if management is on their toes.

11. Monitor Check-Out Procedures

Conducting a mid-shift drawer audit shows your bartending staff that you take theft seriously, so make it a policy. So does monitoring the check-out procedures.

It may take a bit more effort, but management should periodically monitor the check-out procedures. Count the drawer WITH the bartender. It’s not necessary to do this all the time – but do it without notice.

12. Utilize a Comp/Waste Sheet

Every bar should have a comp/spill sheet. Bartenders may not use it all the time – but if there are discrepancies in the pouring cost, it’s very likely to be from either theft or inexperience.

Manager approval should be required for all free drinks. Many bars have policies in place to allow for free drinks, and accounting for them goes without saying.

Managers should be taking a close look at these sheets – making the bartender aware that they are being monitored.

13. Document Procedure Violations

Giving out too many free drinks may be something that management should document. In fact, any policy violations should be documented in order to have ammunition if it comes down to job termination.

Wastefulness, free drinks, over-pouring, etc., all contribute to unprofitability. If there’s theft involved, everything MUST be documented.

14. ‘No Sale’ Policies

Hitting the “no sale’ button is a huge problem. Especially when it happens frequently. Yes, there may be instances where a bartender needs to get into the cash drawer, but if you see a lot of these “no rings’ you have a  serious problem.

Many bars require their bartenders to get management approval for the no-sale button. That’s inefficient. Bartenders do need to make change on occasion, and many bars set up a ‘side drawer’ for that purpose.

Or, they have a special button on the POS system marked ‘change’ or something else appropriate. The important thing for managers to remember is that they need to make their bartenders aware that they track these ‘no sales.’

Of course, if one bartender has two or three times the normal amount of no-sales during his or her shift – there’s a problem, and bar managers need to take a closer look.

15. Employee Designated Areas

All bars and restaurants should have an employee area. Somewhere that employees can keep their personal items. With lockers.

This prevents employees from keeping personal items behind the bar. Overcoats are a great place to stash liquor bottles and other goods. Having a designated area for personal items is the smart thing to do.

16. Strict Pouring Policy

Give your bartenders pouring tests. Make sure they’re very well aware that the house pours 1 1/2 ounces – not 1 3/4. Some bartenders just get sloppy – but others constantly pour with that ‘tail’ costing the bar a lot of money.

Consistent over-pouring can devastate the liquor cost. And bottom-line profits. If bartenders just can’t seem to understand the importance of consistent pouring, it may be time to let them go.

This is the easiest of all theft methods to correct. Train your bartenders properly and you’ll be just fine.

17. Beer Policy and Procedures

How much of a head goes on each draft beer? Are the beer lines clean and pushing the beer through properly? Beer cooler at proper temperature? Make sure the equipment is in good working order so there are no excuses for wasted beer.

Draft beer is one of the biggest areas for potential theft. Bartenders can simply say. “there’s way too much foam coming through the lines – we’re wasting a lot of beer.”

In reality, he’s probably giving out free draft beers – or hitting that no-sale button on every 5th beer. Be wary.

18. Wine Policy and Procedures

Selling wine by the bottle opens up a whole new can of worms. Many bartenders claim that they sold a full bottle – at full bottle price – and then sell it by the glass. That’s usually around an extra $10.00 in his pocket.

Another way dishonest bartenders exploit the wine thing is that they pour a glass and then say that the wine had ‘gone bad.’ They write it down on the spill sheet and then proceed to sell the rest of the bottle by the glass.

19. ALL Products Must Be Rung Up

No excuses. If there’s a reason for a ‘no ring,’ then management needs to approve the transaction. No exceptions. Bar theft problems are scary, and a good POS system must be in place.

This is tricky. There are times when a bartender has to get into the register. Realistically, management tracking the number of “no-sales” for each bartender is the way to monitor the situation.

20. Invest in a Hydrometer

Investing in a hydrometer may be a good way to go if you suspect your bartender is diluting the liquor in certain bottles. This is one method that a bartender uses to put a little something extra in his pocket on a regular basis.

The process is simple. The bartender adds some clear liquid, usually water, to a bottle of vodka. Even just a few ounces can add the price of a couple of drinks to his ‘tips.’ And, the volume of the bottle of liquor remains the same.

A hydrometer can test the actual proof of the liquor and detect anything above or below the normal alcohol proof for that particular brand of liquor. If the hydrometer shows 75 proof instead of 80 – you have a problem.

Many bartenders use this dishonest method of cheating the house and his customers. They simply add this to their ‘repertoire’ of methods to increase their take-home pay with no one the wiser.

Final Thoughts on Preventing Bartender Theft

Bartender theft is a common, everyday occurrence.  It happens more often in bars that have shoddy accounting methods and apathetic management.

Eliminating bartender theft can contribute immensely to a healthy bottom line. It all starts with the hiring practice, and effective, diligent bar management will go a long way in keeping profits consistent.

Related Bartending Topics

Exactly how are bartenders ripping off the house? I wrote a great post on how bartenders rip off the house. I also wrote another post on how they rip off the customer. Dishonest bartenders are, generally speaking, pretty smart people. Especially the experienced ones as they’ve been around a long time and get a very good feel on how bar management controls liquor cost and gross profit.

Can a bartender be prosecuted for theft? Yes, they can. Ripping off the house is one thing. Ripping off the customer is another. In both instances, depending upon what kind of theft it is, bartenders can and will be prosecuted.