1. 1
INTRODUCTION
It is this desire for alcohol that has made the restaurant/bar business the industrial giant it is
today. While my purpose of this study is to evaluate the circumstances regarding drinks
(alcoholic) theft and pilferage and to suggest solutions regarding the same, it would be
needless to state the necessity of showing the contributions of beverages in all aspects in this
Industry.
Importance of beverages in the Hospitality Industry
The restaurant industry is one of the largest employers in the world .The National Restaurant
Association reports that 113 million are employed in this industry, attributing to $399 billion
annually in sales (NRA, 2001).
The margin of profit in the restaurant business is relatively small and can be further reduced
by incidents of employee theft (National Restaurant Association).
It is difficult to quantify the increased investment in human capital and program
development that hotel companies have made over the past several years in the area of food
and beverage. However, this increased investment is seen as critical to driving overall asset
are able to leverage f & b to position a property within its market and drive revenues in the
rooms division.
In recent years, the industry has witnessed a few notable trends, including:
 Increasing emphasis on in-house development of retail-style restaurant concepts
 A new focus on f & b in the select service segment (Hyatt Place, Aloft, Indigo, Courtyard)
 An explosion of partnerships with celebrity chefs; and
 The addition of f & b service in hotel public spaces.
To support the focus on food and beverage development, many companies are expanding
expertise in this area by increasing the number of corporate staff members or adding senior
level positions where none existed before.
Definition of Theft
Employee theft refers to the unauthorized taking of cash, merchandise, or property. Theft is
very costly to employers in terms of losses in profits, inventory, morale, and image. Thirty-
five percent of restaurants fail due to employee theft. Theft in the industry is resulting in
annual losses as high as $20 billion. The National Restaurant Association estimates that four
cents out of every foodservice dollar is consumed by in housetheft .

2. 2
When I first worked in bar I saw many pilferage of alcoholic beverage.Likewise when the
huge crowd occurs at that time the misuse increases.Because at that time the staff felt easy
to steal the drinks.Sometimes in many parties they had the drink of the guest and for that
they don’t have to give the calculation and didn’t have to maintain costing also.Rather than
that the staff of other department also had the drink without thinking about the cost control.
RESULT- Bar and restaurant owners can lose considerable amounts of money from liquor
theft when there are no preventive measures in place. The financial loss can cripple an
establishment if the theft continues undetected over time. Dishonest bartenders steal liquor
from a bar in various ways, such as taking bottles from the establishment, spillage and over-
pouring. Owners can prevent theft by adopting several preventive measures. Staff members
aware of these measures are less likely to steal.
Why Employees Steal
The key to controlling theft is in understanding the factors and motivations that lead up to
the illegal deed. The assumption attitude managers need to take is that most employees are
good people and are driven to theft by some factor they may or may not be aware of Most
people must go through a sort of internal rationalization before they steal.
Every employee possesses different rationalization in his or her perception of theft. The first
decision they must make is whether or not the money or merchandise they are about to take
is worth the possibility of losing their job. In some cases the chance of getting caught may be
sufficient enough to deter them
Once they have determined the theft is worthwhile, they rationalize the theft assomething
other than theft. The three most common rationalizations are:
1, resentment;
2, larceny and greed;
3, financial need.
Characteristics of Employee Theft
In the workplace, studies have linked three factors that can be directly attributedto
employee theft: the employee's age, the length of tenure with the firm, and theperceptions
of employer fairness/unfairness . Specifically, younger employees are more likely to display
certain aberrant behaviors or become involved in certain types of unacceptable activities,

3. 3
employees who have not been with an organization long and have not developed a satisfying
relationship or commitment to the organization may engage in certain deviant acts, and
employees who perceive inequitable treatment may engage in certain inappropriate acts.
Other factors that may also contribute to employee deviance or unreliability include the
organizational climate and the opportunities that are available.
These are of following kinds:
Theft of Property
Most prevalent type of theft is eating company food. After that, the most prevalent form is
providing food and beverages to friends free of charge.
Theft by Gender
Generally, a greater percentage of men admitted involvement in theft-related activities or
behaviors. When the frequencies of male and female participation were compared,
differences were detected. In particular, men were significantly more likely to provide food
and beverage free of charge to friends, to help others take merchandise or property, to
remove food and/or beverages items from inventory for personal use, and to eat company
food without permission.
Theft by Age
Aside from eating company food, the most prevalent form of theft regardless of age is
providing food and beverage items free of charge to friends. As a group, however, the older
employees were least likely to engage in theft-related activities. The younger employees
were more likely to help others to take merchandise or property, and to engage in activities
that represented theft directly from the customer or other employees (as opposed to the
business). When correlated with age, the relationship is significant and negative, indicating
that younger employees tended to engage in these activities more than olderemployees do.
Theft by Control System
Out of 27 establishments in the sample, six have an automatic liquor pouringsystem, and five
had an automatic beer pouring system. One of the reasons to have anautomatic pouring
system is to increase controls of the operation and reduce deviance.
Theft by Opportunity
Respondents were asked to indicate whether they were front-of -the-house(server, host,
cashier) or back-of-the-house (cook, maintenance) employees.

4. 4
They were more likely to commit a form oftheft where they perceived, from their advantage
point, an opportunity. For example,front-of-the-house employees were more likely to
provide food and beverage free of charge to friends, sell merchandise at reduced prices, and
take money by not reporting or ringing sales on the register. Back-of-the-house employees,
on the other hand, were more likely to take company supplies and remove food and
beverage items from inventor.
Several other kinds of theft were…..
• Charging for drinks not served is a very likely incident where a customer unknowingly pays
for a drink that he/she did not order. The bartender then sells that drink toanother customer
and keeps the profit.
• Underpouring is the act of giving the guest a lesser amount alcohol in the drink they
ordered and selling the difference to another customer for a profit.
• Bunching sales is when a bartender rings up several tickets at one time omitting some
items, but they still collect all the money, keeping the difference.
• Substitution is when a bartender pours a well brand alcohol in the place of the ordered
premium brand, pocketing the profit.
• Undercharging drinks purchased shifts the crime from shorting the customer to shorting the
bar. Typically, a bartender or server will perform this deviant behavioras a favor to friends.
WHY THEFT..
Theft is widespread and is not prevented by automated beer/liquorpouringsystems. This
could be explained by a number of reasons: one, automatic-pouringsystems are not perfect;
two, management is not using the automatic-pouring systemproperly; three, employees
continue to steal with no regard to the automatic-pouringsystem. It makes no difference in
unit cost, if an ounce of liquor is used in a shot or amixed drink, for example a tequila shot vs.
margarita. The actual unit cost for the liquoris the same in both the instances of a tequila shot
and a margarita.
But the actual sellingprices of the drinks are different, as mixed drinks are more expensive.
The non-alcoholicsubstance used in a mixed drink is called a "mixer." Mixers are not usually
tracked forcontrol purposes, because the profit margins on these items tends to be very
small. Thiscorrelates with theft in the manner that bartenders and servers will disperse a

5. 5
mixeddrink, and charge the customerfor that mixed drink, but only ring up the price of the
shotand pocket the difference. Through this manner of theft, the automaticliquor
pouringsystem does not detect the theft.
Another possible explanation of why theft occurs may be the lack of enoughincentive, in the
establishment, for managers to strictly monitor the control system. Thislack of managerial
incentive might result in managers not implementing inventorycontrol measures as often as
they should. Finally, the philosophical question of "areemployees being paid enough, as not
encourage them to not steal," might never beanswered.
OBSERVING THEFT
A bartender engaging in this kind of theft has usually planned and practiced the manipulation
system. It takes knowledge of liquor costs and inventory techniques to be able to pull of this
type of theft. For example, by bringing and pouring liquor from their own, store purchased,
bottles, they are essentially opening their own bar in the bar they work in. There will be no
change in inventory that is detectable; revenues will just be lower.
With liquor substitutions and over/under pouring, it is the slight changes in costs that the
bartenders are taking advantage of. Bartenders would either use a lower cost liquor to
substitute or pour less liquor in beverages, then take advantage of the excess. Over pouring
is normally an attempt to gain higher gratuities.
 Check references and run a background check before hiring bartenders and other staff
members. A careful investigation can reveal dishonest candidates with a history of
theft and alcoholism. This is helpful in creating a staff of dependable workers unlikely
to steal liquor
 . Install a surveillance camera behind the bar. Bartenders aware of being watched are
less likely to steal.
 Tell bartenders about the various bar policies. Explain the effects of theft on the
business. Also discuss the actions considered alcohol theft and explain the disciplinary
measures taken for such actions. Give each worker an employee guide containing this
information.

6. 6
 Limit the purchase, receipt and issuing of alcohol to key personnel. A dishonest
bartender can order more than is required and ensure the disparity doesn't appear in
the records.
 Take a daily count of the liquor inventory. You may also assign this task to the
manager. If a dishonest bartender is entrusted with this task, he can increase or
decrease the count to hide theft.
 Conduct regular spot checks at the bar to ensure the bottle count and liquor levels
match sales. Check before and after each shift to determine the culprit when there is
evidence of theft.
 Smell-check the contents of the bottles regularly to ensure authenticity. Dishonest
bartenders sometimes add water to the liquor to hide theft and make inventory
match sales. This is common with liquor that can mask the dilution, such as gin and
vodka. Bartenders who are aware of this control measure are less likely to dilute the
liquor.
 Prohibit bartenders from providing friends, family or customers with free drinks. If
this is acceptable in some cases, create a system in which the bartenders obtain
written authorization from the manager and the manager records the incident.
 Ban bartenders from drinking during a shift or in the establishment when they are off-
duty. Fellow bartenders are likely to over-pour, provide free drinks or undercharge
when serving an off-duty employee, according to Elizabeth Godsmark, author of
"Controlling Liquor, Wine and Beverage Costs."
 Monitor bar operations for at least 10 minutes every hour. The owner's or manager's
presence deters bartenders from stealing bottles, drinking the alcohol or giving
unauthorized free drinks to customers.
 Install liquor-control systems. Pour-control devices attach tobottle spouts and help
bartenders pour a specific amount of the liquor. The devices also record the amount
of alcohol poured out of the bottle. Comparing the recorded data with sales reveals
possible theft.
 Instruct employees to arrive and leave through an assigned door. Watch employers as
they leave to detect any staff member trying toleave with bottles.
 Instruct employees to store belongings in a locked room. Keep the door of this room
under video surveillance to prevent employees from storing bottles of liquor with
their property.
 Implement a bottle for bottle exchange requisition program to reduce the risk of a
bartender pouring from his/her own bottle of liquor. Require bartenders to trade in
an empty bottle for a full bottle. Make sure all bottles have a special hotel stamp on
them that cannot be duplicated.

7. 7
 Do not allow personal belongings behind the bar. Require your bartenders to leave
any purses, backpacks, and other personal belongings in the lockerroom or other
area. This will help prevent bartenders from bringing in any items used to facilitate
theft, such as their own alcohol bottles or smaller jiggers.
 Have the proper logs in place for complimentary or spilled beverages. In addition,
require your bartenders to properly log and get approval (if possible) for all spilled or
free beverages. With this information, you can properly account for any beverage
cost discrepancies. Another method of control for this issue is to close out the
necessary checks to the proper administrative accounts and have a manager sign off
on the transaction.
 Keep an eye out for a method of counting. If a bartender is under pouring or pouring
from their own bottle, they usually need to keep a count of how many pours they are
stealing. Look out for straws or picks in abnormal positions or a beverage napkin with
numbers on it or with many tears down the side.
 Employ random mystery shopping and inform your bartenders that you are doing
so. A good way to present mystery shopping toyourteam so they do not feel their
job is threatened is service improvement. There are some things that bartenders may
do that can only be seen by customers and just the thought of possible mystery
shoppers will help lower the chances bartenders will take to steal. Mystery shoppers
are effective if every bartender is shopped a minimum of once per month.