ED Publications

ED November 2016

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48 November 2016 Club Bulletin www.EDpublications.com F or many adult club owners, the bar is one of the areas most vulnerable to theft. This is particularly true if you have a booming bar business and a strong bartender. You might not feel the pain of constant theft and skimming, such as a free drink to the bartender's friends here and there, or stealing from the cash register. Complicating the matter is that sometimes the most dangerous bartenders are the best and brightest. Behind the bar is a place where individual talent and charm can be measured in hard cash, and a common and woeful tale is the stellar bartender with a huge following of customers who is caught stealing from the owners. In that case, even an honest but average bartender might not be able to match the end-of- the-night profits turned in by the thief. Nevertheless, your bar should be a cash cow in your operation, and you should reap every penny of profit that you earn. You are always better off hiring for attitude (and honesty) and training for skill. Have you heard of the term "shrinkage?" To the uninitiated, it may sound harmless, but just the thought of it is enough to make seasoned beverage managers wince and bar owners shudder. Shrinkage—or the liquor that is lost due to waste, spillage and theft—can chew up 20% to 30% of the bottom line. One liquor auditing service has determined that the average shrinkage is actually 23% on liquor and draft beer, about 10% on wine and 2% on bottled beer. That's a lot of money. It could mean your profits for the year, particularly in a startup enterprise. Eliminating shrinkage can mean the difference between financial success and failure. Theft alone is an insidious source of losses. Opportunities are rife for theft behind a bar. Bartenders are often working without direct supervision. They steal from the bar and its customers because it's easily accomplished, hard to detect, and extremely difficult to prevent on an ongoing basis. The temptations posed by constantly handling large sums of cash and dealing with a liquid inventory can often prove overwhelming. At some point, most bartenders contemplate stealing cash, giving out free drinks, or any one of a multitude of transgressions. Effectively limiting internal theft behind the majority of bars is no easy task, and eliminating it is unrealistic. But it's essential to formulate and put in place an operational strategy to contain the problem. To that end, here are practical recommendations on how to reduce your vulnerability to theft. 1.) Prohibit bartenders from checking out their cash at the end of a shift In many operations, bartenders are required to reconcile their cash drawers. This entails using the cash in the drawer to compile the bar's opening bank for the following shift, and to itemize the remaining cash proceeds onto a deposit slip. If the bartenders are stealing, the checkout process provides them with an ideal opportunity to safely remove stolen funds secretly deposited into the register's cash drawer during the course of their shift. Taking this responsibility away from the employees, bartenders will be forced to either pull the money out of the cash drawer during the shift or opt not to use the register as a place for their stolen funds. 2.) Create tip jar procedures The bartenders' tip jar should be placed well away from the operation's cash register or POS (point-of-sale system). If the tip jar is placed right next to the register, it is far too easy for bartenders to divert stolen funds away from the register and into the tip jar. In addition, bartenders should be prohibited from making change out of their tip jar or taking currency from the tip jar and exchanging it for larger denominations out of the cash drawer. If the bartenders are stealing from the business and using the cash drawer for the stolen funds, they can easily retrieve the money from the register under the pretense of making change. For example, a bartender could take 20 $1 bills out of the tip jar, deposit the currency into the register, but instead of taking out a $20 bill in exchange, he or she could remove four $20 bills, withdrawing $60 of stolen funds. 3.) Don't allow bartenders to participate in the physical inventory process The process of auditing the bar's physical inventory is solely a management function. Bartenders who are stealing can use their participation in the physical inventory ways to prevent theft behind the bar AR MANAGEMENT B by Robert Plotkin 13 Shrinkage—or the liquor that is lost due to waste, spillage and theft—can chew up 20% to 30% of the bottom line. But what can you do to stop that clever bartender from robbing you blind? Bar expert Robert Plotkin offers his 13 tips to stop waste, spillage and theft behind your bar.

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