Updated: Oct 5, 2022
New Years is just around the corner, and with it, comes resolutions to live better. But before we weigh in, head out and get a burger. Buy some chicken strips, fries, or tacos and get the biggest soft drink they have. Loosen your belt a size, sit back and enjoy. We're talking about Fast Food Fraud.
Something different, right? Restaurant based fraud is a thing and can cause waves in the stores it is found in. Want to lose profits and people? Introduce theft and fraud to the place. Here are some crimes against the food service industry.
Break-ins and Robberies
Basic thievery, plain and simple. These robbers could be going for cash, or they could be going for inventory. It could be during hours of operations or when the store is closed. Surveillance is one avenue to address the risk. It acts as a deterrent and system of record if and when a crime takes place. Locking up and arming applicable alarms, doors, and vaults is another way to prevent loss. Don't forget outside freezers or storage units as well. One other best practice is to have employees use good drive-thru etiquette. Windows stay shut when not in use, especially when the dining room is closed. Lastly, ensuring the cash is secured and that multiple employees are present during close can further protect the store.
People making deals behind the owner's back is one way vendor fraud can take place. Kickbacks to employees who do business with vendors on unfavorable terms can hurt the business while lining the pockets of the manager overseeing the relationship. A segregation of duties and third-party oversight should limit the risk of vendor fraud.
Multiple scenarios exist for card chargebacks to occur. It may be criminal fraud based on a card breach or theft. It could be a misunderstanding or error that the customer is disputing. It could also be an authorized transaction that the customer disputes in error. Ensuring a stores processing solution is up to date is key to addressing many chargebacks scenarios. Following up with complaints is another best practice that can help.
A Void Scam occurs when the employee skims money by voiding orders and pocketing the order money. Beyond the theft aspect of this, it creates a negative effect on the inventory. Monitoring for voids and having surveillance focused to the registers are two ways to fight it.
Not really applicable to fast food, but definitely a risk in sit-down restaurants, Auto-Gratuity Scams take place against customers. Servers will add the gratuity in, hoping that customers do not notice the difference and pay additional tips. While high performing servers should generate higher tips, excessive tip amounts can indicate an Auto-Gratuity Scam. This is a red flag for a server engaging in the scheme.
Inventory Theft or Manipulation
A block of cheese goes missing. The inventory is down a sleeve of beef patties. It happens whenever that rat Daniel is working...curious. Inventory theft or manipulation can result in lower profit margins for the business. Ensuring regular product counts and diversifying those performing inventory functions are two ways to stop the stealing. Cameras would be a third option. Maybe it wasn't Daniel the rat (though it ends up being him).
That rat Daniel clocks in and leaves. He takes five smoke breaks an hour (and HE DOESN'T EVEN SMOKE). Establishing clear break policies, scheduling, and performing time audits may stop him from this.
Cheeseburger = $1.99. Bacon Cheeseburger = $2.49. Undercharging Scams take place when employees input lower amount items, pocketing the difference. It can also happen if they want to hook a buddy up with a deal. Monitoring counts and quality checking orders being filled can limit this risk.
Intellectual Property Theft
Restaurants spend a lot of time and money just to get things right. Those in the mix that have access to that information have the ability to steal it. A secret recipe for world famous pancakes? An algorithm to plan baked potato drops? It is all up for grabs if not addressed with things like patents and copyrights.
These are just some of the crimes and corresponding best practices associated with restaurants. Kind of crazy that the threat of fraud exists in the fast-food world. But it isn't just burgers and fries now, is it?