Suspect managers of theft

[Redbud]

We are a group of investors for a two year old 150 seat restaurant. We put our faith in two managers to run the business, it is profitable and "doing well", but we suspect theft/embezzlement.

We are hesitant to contact the Aloha reps for fear the managers will be tipped off.

We've seen some disconcerting things on the security camera. For example, manager in office at end of day, taking what appears to be an exact amount of money out of drawer and pocketing it. We think the next step is to see a record of the screen touches or manager actions for the day.

How do we know if the manager is deleting a guest check and pocketing the cash?

 

[TJFman]

If you have access to the Aloha Back Office computer, you could log in to Aloha and pull and Audit report. This will allow you to flag what you want to see in the report. If you want to see if they are reopening checks, deleting the cash payment, then voiding or comping the check, you could select those boxes and pull the report to see. Other than that, it may be beneficial to get a hold of the Aloha reps and let them know what you are looking for but make sure they know not to let the managers know. Any respectable Aloha dealer will make sure the managers do not find out what you are looking for and why.

 

[posrescue]

The best place to start would be the audit report. This report will show most functions that have been performed on the FOH.
Select the date. Set the time parameters (Military time).

I would start with 06:00 to 04:00, all employees, voided items, deleted checkouts & reopened checks. It will be in chronologic order on the report so it's pretty easy to follow.

On of the big ones to look for is deleted checkouts followed by reopened checks followed by voids. Obviously that could be a very big red flag particularly if it is late after all employees are gone.

There is also a void report that will show all voids for the day but the audit is far more telling.

 

[TobeThor]

Agree on the audit trails. Do you get a deleted checks print out report on each EOD? Do you use NCR's restaurant guard? I believe the RG product will automatically send you alerts if that kind activity is occurring (re-open cash checks, voided the items, and pay it off to zero cash, then pocket the cash). When Mgr's do this they generally grab a staff members guest checks that were paid with cash, do you have the end of shift print outs when servers/bartenders run their reports? Compare those reports to the servers/bartenders EOD totals. If Mgr's are re-opening guest checks and voiding items to get to zero, the two reports should be different. IE: at 10PM close out Sally has $500 in receipts, but the following morning the POS says Sally had $400 in receipts.

It sounds like you may need to implement procedures that expose this activity whenever it occurs (the 1st time actually) as it sounds like the surveillance system brought your attention to it. It's not difficult to create systems in place that expose this activity and your Dealer should be of help.

 

[TobeThor]

I hope you keep this forum "in the loop" re: this problem. A lot of people can learn; how you discovered it, how you addressed it and what steps you implemented to avoid and/or expose it if someone tries it again. Great lesson(s) may await all of us.

 

[Redbud]

Okay, we'll start with the Audit Report. Thanks.

@TobeThor
Yes, glad to report back. First mistake? Putting too much trust in the two managing partners and not insisting on more controls and accountability. As investors, we turned operations over to them in good faith (or one could argue, in naivety). We believed in their talents and were pleased to help them realize their dream of opening a restaurant.

We are unsure if the two are colluding or not. Are they both stealing? Is only one stealing but the other is guilty of looking the other way, or the other is simply incompetent or too trusting for not catching it? Hopefully, the Audit Report and the cameras will give us our answers.

Another mistake? What good are cameras if no one ever checks them?

The KM has been complaining about the managers, almost since the beginning, and to us, it seemed like a stupid pissing match between BOH & FOH. We are not on site, not involved in operations, and work in different businesses ourselves with no time or inclination to run a restaurant. We did not know who or what to believe. We've had two good years since opening, and quite frankly were a bit annoyed with the KM's bitching.

None of us ever went in to look at the security camera recordings and we do not have them enabled for remote viewing. Eventually, the KM videotaped some of the security camera recordings, showed them to us, and that was our wake-up call. Managers and staff sitting at bar after hours helping themselves to the liquor. Employees taking booze home. And then, the one manager pocketing cash out of the drawer in the office.

 

[TobeThor]

If it's your money on the line you may have to remove one, two or more people from the business. This is my experience; when one is stealing for an extended period, others will notice and take advantage and join in. Based on what you described, it sounds like issues are more wide spread than one or two misbehaving. When Mgr's treat the inventory as you described all process breaks down and pilferage is typically rampant. The favorable revenue #'s you described only made it possible to tolerate vs. operating in the red.

If one Mgr is dismissed, the other better be Abe Lincoln if they are to stay. The Mgr's job is to protect the business, the employees that rely on their weekly income and your investment. They failed miserably at each.

IMO you need a very reliable book keeper, procedures and controls that allow you to accurately determine weekly F&B costs, Daily & weekly labor cost ratios that are accurate and get a Mgr that's paid based upon producing and controlling those #'s. F&B Inventory is a big concern but don't forget payroll padding is also a way to steal or in general if ignored can cost a restaurant thousands of unnecessary expenses. That KM sounds like a gem but you may end up clearing the FOH out in the end. Sorry if I sound like a preacher but when people are given opportunities and return what these Mgr's have returned to you it just makes my blood boil. Keep us updated; this is absolutely a very valuable lesson to all who read and contribute to this powerful forum.

 

[TobeThor]

Redbud,

How is your situation? Did audit trail reports help determine anything specific when you matched them up with activity on the surveillance camera'a? FYI: your camera system can be interfaced with your POS. That allows you to pin point specific days and times to closely monitor staff behavior. Many popular camera systems and their software allow you to search for particular items that were sold, so if you know a regular customer likes Bud and you want to see every "Bud" transaction you can search in the camera software for Bud and it will automatically bring you to every point in time when Bud was sold at the bar POS station. This means you don't have to sit in front of the camera for hours on end waiting to catch a Bud sale. But all that means nothing if your bartender isn't ringing up Bud. It does however allow you to quickly determine if a bartender delivers Heineken to the guest, collects $5 and rings up a $2 sode and pockets the $3. You find that situation by searching for soda and then watch the video of the bartender actually preparing the drink in question. It's really worth looking into. Your Dealer can help sort that out.

 

[Redbud]

Some of us went in early Sunday morning and ran Audit Reports from about 8-10 random nights. Our conclusion? We need outside help. Sadly, we do not understand enough about the basic operations of the business.

However, even with our ignorance, there are transactions on the Audit Reports that bear further investigation.

There are a couple DELETE CHECKOUT, but we did not see those followed by REOPEN CHECK, & VOIDED ITEMS (see posrescue post up thread).

A potential red flag is the number & types of VOIDED ITEMS. Why are there so many voids and why are the voids predominantly wine and liquor? An epidemic of server & bartender mis-rings? A mis-understanding or negligence when it comes to categorizing voids versus comps? An effort by the managers to keep comps low? Or, are these voids a sign that servers or bartenders or managers have found a way to get extra cash?

One server in particular has a one big void on almost every Audit Report, before CHECKOUT. It's usually a mix of alcohol and entrees, and runs about $20-45 worth of voids from one table. This looks like server theft to us.

We were wondering if the managers are using magnetic swipe cards, or punching in with numbers. On the Audit Report, it is showing a manager is doing the void for this server. But, is it really the manager, or is the server borrowing the manager's card or using their number? Is it collusion? Why aren't the managers themselves looking for this kind of suspicious activity?

There also seems to be a lot of TRANSFER TABLE and ACCEPT TABLE, which we don't understand.

On the voids, the Report will say (names changed) Mgr 5689 John Emp 9078 Mary voided $ 35 from Table 14 Check: 10037

Got it. Manager John voiding something off of Mary's check on Table 14. (Or Mary using John's card or number).

For example, a series of transfers, the Report will say:

TRANSFER TABLE Table 30 from 9078 Mary to 5689 John (<---Mary is a server, John is a manager)

ACCEPT TABLE Table 30 from 9078 Mary to 5689 John as Table 30

TRANSFER TABLE Table 30 from 5689 John to 9078 Mary

ACCEPT TABLE Table 30 from 5689 John to 9078 Mary as Table 30

This is all in the space of a minute. There are several series of transfers just like this, different servers, different managers, on the Audit Reports. We don't know what these are, and we plan to reach out to our Aloha Rep for help.

We also feel we cannot adequately evaluate the situation at the bar without additional outside help. We already see that a high percentage of the voids are alcohol. But, we don't even know who reconciles the bar drawer at the end of the night. That seems like an important piece of information.

The business usually runs with 2-3 bartenders and one terminal/drawer at the bar. We see on the Audit Report more suspicious voiding, but it's not clear to us what we're seeing.

For example, this series:

REOPEN CHECK Bar5 for 401 Bartender by 605 Tom (Tom is a manager)

REOPEN CHECK Fast Close for 401 Bartender by 605 Tom

VOIDED ITEMS Mgr 605 Tom Emp 401 Bartender voided $24 from Fast Chk: 40016 (lists drinks below)

And, another series, near closing:

REOPEN CHECK Cbr4 for 401 Bartender by 605 Tom

REOPEN CHECK Bar78 for 401 Bartender by 605 Tom

ACCEPT TABLE Cbr4 from 605 Tom to 401 Bartender as Cbr4

VOIDED ITEMS Mgr 605 Tom Emp 401 Bartender voided $17.50 from Cbr4 Check: 40069 (lists drinks below)

VOIDED ITEMS Mgr 605 Tom Emp 401 Bartender voided $23.50 from Bar5 Chk: 40003 (lists drinks below)

We are not sure who Emp 401 Bartender is, or how that works. We see on other Audit Reports where the bartenders are listed by name.

The current plan is to look into a restaurant consultant group to handle the investigation for us, clean house as needed, and install a system of controls. We need to think big picture here and protect our [substantial] investment.

You are so right, TobeThor, when you said, The Mgr's job is to protect the business, the employees that rely on their weekly income and your investment. They failed miserably at each.

 

[TobeThor]

Re: voids. Typically POS systems will print all void(s) to the dupe printer it originally printed at. IOW, Beer prints at the Bar Dupe Printer when ordered, Server later voids the Beer, that voided Beer will print "again" at the Bar Dupe Printer and the Dupe will indicate it is a voided item. By design this is to allow other employees to see that an item was voided after it has been served and/or prepared. IOW, not voided in secret. It also forces some level of collusion as other employees will need to be involved if a server or bartender is to succeed voiding items without confrontation or exposure. Having said that, many POS systems are not programmed to print the drinks that a Bartender rings up at the Bar Dupe Printer (the Bar Dupe Printer is for floor servers, cocktailers etc. NOT Bartenders). It's no surprise that the majority of voids that occur behind the bar are beverage related vs. food; remember the food will print void dupes in the kitchen (alerting other staff members). Voids are a simple method of theft. Guests pays cash, Mgr/employee picks up tab, voids off drinks (drinks don't print void dupes at the Bar Dupe Printer because they are ringing drinks at the Bar POS-as designed), pays reduced tab amount off to cash. Remember it's practically always a cash tab vs. a credit card tab (it's hard to manipulate credit card tabs).

The added concern would be the food voids. Why? You said the KM is a good egg; so why or how has the kitchen staff managed to not notice all these entrees being voided if the entrees printed in the kitchen. Very strange.

Buy the book "Burning down the House", it details many ways to steal from bars and restaurants. The check transfers activity may be what's known as the "floating beverage scam" where basically a bartender uses their ability to transfer items from check to check to sell the same item repeatedly to different guests; get paid for that one item repeatedly but in the end only pay off the one item "once" and keep the money from all the bogus sales. Diners are very prone to it, goes like this:

Guest orders coffee & bagel (bagel $3, Coffee $2 - $5)
Server starts tab, orders coffee & bagel
Server presents guest check to guest for $5
Guests pays $5 cash and leaves
Server picks up tab, transfers the coffee to another guest check, pays off check for $3 (puts $2 in their pocket-stolen)

New guests sits down and orders coffee
Server starts using the tab that has the "old" coffee on it and repeats the 1st example.

So the server can sell and get paid for that one coffee 20 times if you don't know how to catch them. Remember, it's always cash sales though.

 

[posrescue]

I have seen few Aloha systems programmed to print voids on production printers. As pointed out above, this may be a good idea.

Your employee number 401 named Bartender would be a "dummy" number used by all bartenders. It is entirely possible that the manager is removing sales during the shift. That would explain removing a predetermined amount of money from the drawer after close.

I would require the managers to use security cards and also numerically password protect their login numbers to eliminate the chance of employees using these numbers.

You may be able to find a quality consultant that can help you get things under control depending on where you are located. Be sure they have a mastery of not only the business but also have a track record of "turn arounds". Very high on the list would also be someone that has experience turning around a staff and not just reporting to managers or owners.

Good luck.

 

[TobeThor]

Redbud, I am not an Aloha expert or reseller but I'd also suggest looking into finger print scanners at the POS for Mgr functions. Numerical ID #'s for Mgr's is a bad idea as the staff will quickly learn them, Plastic swipe cards for Mgr's are better but also not full proof. Finger print scanners are the best option available and cost less than $150 each.

 

[smartcard2]

I was told that Micros has a good system called XBR.

http://www.micros.com/Solutions/ProductsNZ/XBRLossPrevention/

You can even ask for a trial

 

[pmegan]

You should also find out what kind of void/transfer privileges your servers have and what policies are being followed.

For example, we don't allow our servers to void anything that's already been service totaled, but used to allow them to do their own transfers. So the scam was that they would split items off checks that were being closed to cash on busy nights. When they tried to close out for the night they would explain that the open check they had was just items that had to be voided, but they couldn't find a manager at the time. There was no policy against this, and the managers figured it was a good way to keep the guests from waiting, so it was pretty much a standard practice before any of us in the corporate office found out about it. We changed the privileges to require a manager auth for check transfers/splits.

Also, and this is an oldie but a goody, watch your bar drawers for small piles of misc objects - coins, paper clips, rubber bands, etc... bartenders who are skimming will use various combinations of them to keep track of how many singles, five, ten and twenty dollar bills need to be removed from the drawer before it's counted to make sure it balances.

If you don't use spotters or secret shoppers you should consider it. There are companies out there that provide this kind of service, and their spotters know what to look for.

 

[PosGuyUS]

Some suggestions:
I would suggest seeing if your POS system can integrate to your cameras. that way you can see the voids and other things being done. Don't know much about Aloha specifically but I am sure that they can at least give you text overlay, similar to a pole display, right on top of the action. Then if there is a search text feature in the cameras you can find these transactions. Being a POS dealer, I know we can fully integrate with something thatoutputs everything which gets synched to the DVR.

At all POS terminals, add a pole display that can be seen from the cameras as well as spotters. Spotters can just tell you what they see sometimes and that's enough. I once spotted a bartender for a friend of mine, gave him a list of drinks I was betting that were given away and he checked to see if they were sold, they weren't, bartender admitted it when confronted.

Disable the ability to delete cashouts. Never heard of this feature in other POS systems.

Add a drop safe and have the servers sign off on their drops. If they sign off that they dropped $50, it will make it harder for a manager to change it.

Keep an eye on punch out times compared to cashout reports. Assuming you use the time and attendance features in your POS, if not, start. All cashout reports should be prior and within minutes of a punch out.

Do you run a food cost and liquor cost? Are the numbers within industry standards? Start using an inventory system. Not sure what your system has, some have them built in like ours, some make you pay. Either way it's worth it.

Catching a crook and walking them out in handcuffs is a great impact on the remaining staff. I recall helping an owner catch a manager, they held a staff meeting and had detectives waiting to arrest the manager.

If you're worried that you don't have enough evidence, you can keep your mouth shut and just fire the managers. Shake it up. In many states you don't have to explain why you fired them. When you bring in new managers, start off with new procedures.