Archive for April, 2013

Shrinkage is not a new term or a new concern for bars and restaurants.  Employee theft can be intentional, or it can be a consequence of under-trained staff who might not realize they are sabotaging your establishment’s profits.  For bar and restaurant management, shrinkage is an ongoing challenge.  Here’s a look at the top ways your bartenders and waitstaff are stealing from you.

1. Cash register antics. Whether it’s tearing up order tickets, under-ringing, over-ringing, short-changing, voiding sales, or outright stealing cash, there are a lot of scams that happen when dishonest employees are responsible for entering orders, cashing out checks, and closing out the cash drawers.  Many of these antics are hard to prove at the end of the night (i.e., is there proof that the customer really ordered and paid $22.50 in bar sales when their ticket number says there was only $12.50 in sales?). The cash register (or next-to-register tip jar) can be an accomplice for hiding the stolen funds until the end of the night, when it’s slower and easier to pocket all the money at once.  Limiting the ability to hit the “no sale” button to open the register is a first step to take in combating this issue.  Set up an alternative “petty cash” stash for when customers ask about making change (the amount of this stash should never change, just the denominations).  Spreading the responsibilities around may help counter some of these practices, too; for example, have a dedicated cashier on shift who doesn’t also enter any orders.  It’s also imperative that at least two people count down the drawer at the end  of the shift and sign off on the final Z-report (end of shift cash register report).  Your point-of-sale (POS) system should time-stamp the Z-report (and you need to limit access to changing the time on the system with an admin code), so you are confident that staff aren’t balancing the register earlier in the shift to under-report sales and pocket the last hour of service. The cashier or manager on duty, not the bartender, should be the one who counts out credit card tips from the drawer to distribute at the end of the night.

2. Overcharging customers. The customer pays full price, but the order ticket in your system shows a happy hour price.  The bartender up-sells the customer to a top of the line brand and charges them the premium price, only to use the cheaper brand and take the difference for him/herself.  Inflating the number of drinks on a large tab to an unsuspecting group of patrons who lost count of everyone’s orders. Bartenders, especially, see which customers are easy targets to take advantage of when they’re serving up drink after drink.  Don’t let your customers be fooled by your staff, and talk with your employees often to really get to know them. Encourage an open door policy and reward staff who come to you about concerns they have regarding your establishment’s policies or their co-workers.

3. Talking your time away. Cell phones and mobile devices are revolutionary…and addicting to some of your staff.  You might have a cell phone policy in place, but do you really know what happens when you’re not there?  It’s impossible to manage your restaurant every second of every shift.  Staff who talk or text while on the clock are taking away from productivity, influencing your patrons’ opinions of the kind of staff you hire and possibly spreading germs (do you know how dirty cell phones are?). The best part, you’re paying them while they tarnish your restaurant’s good name.  The rate of employees using personal cell phones has increased across nearly every industry, but in the restaurant business, it’s critical to consider all the repercussions of employee cell phone use.  Reinforce your cell phone policies, teach and re-teach health safety practices, provide a list of daily activities that can be done when the shift isn’t so busy, and don’t be afraid to enforce a punishment on those who don’t obey.

4. Giving freebies. What better way to ensure a nice big fat tip than to offer some on-the-house drinks to your favorite customers?  Waitstaff who are tip hungry may pull out all the stops to get an extra buck, without thinking about the cost to you of those “free” drinks.  Make it clear that give-aways are not accepted, or if they are, clarify when it is appropriate and how many you permit on a shift without management approval.

5. Over pouring. Every ounce of alcohol costs you money, so when your bar staff accidentally over pour shots into drinks, they are unknowingly stealing from you.  Train your staff how to properly make each concoction you sell and invest in bar jiggers to aid your employees in measuring the accurate portion of alcohol.  There are systems available that help measure your inventory before each shift and again after each shift to determine how much alcohol was used during the shift, which will show the amount given away via freebies or over pouring.

6. Under pouring. Wait, how can that be stealing?  Well, what if your bartender purposely under pours 1/6 of the alcohol per drink, keeps track of the number of drinks he/she makes, and pockets the cash for every sixth drink?  That means under pouring now equals theft.  Other under pouring tactics include using one shot on two glasses, diluting the liquor with water, or leaving out one or more alcoholic ingredient(s) on mixed or blended drinks.

7. Drinking away your money. It’s a slow night, so your bartender pours a free round of shots for all the staff.  Or, your bus staff member is taking out the empty bottles to your dumpster and secretly grabs a few full bottles with the empties and stashes them in his/her car for later.  It happens.  Be sure you are keeping accurate inventory, so you can easily catch any culprits and prevent it from happening in the future.  On the flip side, there have been cases when staff bring in their own inventory of alcohol and skip the whole cash register process altogether, basically running their own business from behind your bar and keeping the profits.

Now that you know some of the things to look out for, what are you going to do about it?  One of the hardest steps to take as a bar/restaurant owner or manager is to identify the staff who is intentionally stealing…and then to fire him/her.  Even if they are a veteran team member or one of your most liked personalities behind the bar, if they are stealing from you, they don’t belong on your payroll.  Period.  A second chance could just be the opportunity they need to rob you blinder.

Know your staff. Know exactly what tasks they do and how you can train them to do each one efficiently. Know your policies. Know your inventories. Know your instincts.  The more you can arm yourself with knowledge, the less likely someone will be able to steal from you.

We here at East Coast Chair & Barstool are pleased to report on the 2013 Nightclub & Bar Show (NCB Show) in which we exhibited March 19-21, in Las Vegas.  It was our first trade show…ever!  The show was quite an experience, and we learned many good lessons, met many good people, and had a little bit of good fun, too.  After all, we were in Vegas!

The NCB Show kicked off with the first keynote speaker on Tuesday.  Founder of Samuel Adams and The Boston Beer Company, Jim Koch, took stage with beer in hand to talk about how brewers and bar owners can hit the ground running.  This entrepreneur shared his story of how he grew his company from its beginnings in his kitchen, an original accounting system that depended on shoeboxes, and his vision to recreate how Americans felt about beer.  His passion was evident, and he kept the audience engaged with storytelling, photos, and a lot of humor!  He talked about his first sale, when he forgot to ask how many cases the bar wanted to order and went on to talk about how his company has grown.  Koch also talked about how even though Samuel Adams holds a small percentage of the beer market’s share, they have been successful in changing people’s attitudes about American-brewed beer, especially with the rise in the craft beer market.  The biggest takeaway we got from Koch’s speech was that you have to do something memorable, so people start to talk.  For instance, they originated the beer dunking tank; a dunking tank filled with beer that had been returned to the company for being stale.  By setting up a dunk tank, it showed their customers that they’d rather put people into stale beer than stale beer into people.  Even though the word “company” is in his company’s name, he talked about how there are no companies, just people who share common goals.  “Do something you love, and that’s the ultimate work-life balance,” said Koch.  With social media, everyone is talking about someone, and they might as well be talking about you, right?

On the second day of the NCB Show, speaker Nick Shepherd, CEO of T.G.I.Friday’s took the stage for his keynote, titled “Taking a Leap of Faith to Rebrand Your Venue.”  This was a great case study of how T.G.I.Friday’s have reinvented themselves through the flair of their customer-focused team members and mixology specialists. The company recently rebranded itself as the best corner bar in town, and Shepherd showed videos of how their local staff across the globe make the difference.  It was a positive, warm-and-fuzzy, and fun presentation, and it made us want to eat at T.G.I.Friday’s more often for that “Friday feeling” every day!

Following Shepherd’s speech, we rushed to see Nightclub & Bar Media Group’s President Jon Taffer (also from Spike’s Bar Rescue) and superstar CeeLo Green perform the ribbon cutting ceremony to open the exhibit floor.  A mad rush of bar and restaurant owners flooded the aisles of alcohol, music, technology, and of course, furniture vendors.  During the first day, 20,000 people circulated the show, and booth #319 (where our customer care specialists were working) showed a hustle and bustle all day long!

“My favorite part of the show was when our past customers stopped by to say hi,” said Janene DiSanti, co-owner.  “It was incredible validation to meet customers in person who shared that they’ve been happy with our products.”

Being a “dot com” (for argument sake, we’re really more than that) which ships to the 48 continental states, we seldom get to meet customers face-to-face, so this opportunity was really meaningful and rewarding to our staff.  Getting to know our customers and potential customers on a more personal level will help us serve people better in the future, and it was really enjoyable to make those personal connections with the people who are buying our bar and restaurant furniture.

Owner Dave DiSanti meets Bar Rescue's Jon Taffer during the 2013 Nightclub & Bar Show!

On Thursday, March 21, the closing day of the show, we were all attentive during Jon Taffer’s keynote.  We may have been a little star struck when Taffer took the stage – and then jumped off of it.  His unconventional style and loud personality kept us engaged (and awake) the entire time. “Fixing a business is easy. Fixing people is tough!” he shouted.  He echoed the thoughts of Koch and Shepherd when he spoke about hiring people who will raise the average and become brand ambassadors for your bar or restaurant.  He also talked about the product of a bar.  It’s not the food.  It’s not the cocktails.  In hospitality, the product is the emotional reaction that you create.  And the people you employ are part of delivering that reaction.  Taffer went on to talk about the anatomy of a Bar Rescue, the science of good menu design, and more.  He definitely had the crowd on the edges of their seats the entire time.

In addition to the keynotes, the three-day Nightclub & Bar Convention & Trade Show was chocked full with in-the-know speakers who all gave killer presentations for the attendees, as well.  We learned a lot and came home energized with fresh ideas and new perspectives.

When the show closed, we were all exhausted but at the same time, very excited after meeting so  many new people and spreading the word about our new products.  A big plus, the team left in our Pennsylvania office also had a successful week at home.  Overall, it was a wonderful first trade show experience!

Were you at the NCB Show? Comment below with your thoughts on the event!