Holiday Edition – Because December is Busy, Cash is Moving Fast, and Margins Are Tight

Running a restaurant during the holidays is its own kind of beautiful chaos – full sections, new faces, staff pulling doubles, inventory moving faster than usual, and cash flow finally showing signs of life after a long year. Most operators are too busy to think about loss prevention or fraud… and that’s exactly when problems tend to slip through the cracks.

Restaurant theft isn’t always dramatic or malicious. Sometimes it’s a stressed employee making a bad decision, a systems oversight, or a culture that hasn’t clarified what “theft” really means (for example: unapproved comps, unauthorized discounts, time-padding, food waste, or small take-home perks that feel harmless). With tight margins, small leaks add up quickly – especially if they go unnoticed.

The goal here isn’t paranoia or distrust: it’s stewardship. Your team deserves clarity, fairness, and systems that protect everyone: the business, the honest employees, and even the person who might be tempted to make a bad choice.

This shouldl help you spot potential fraud, respond appropriately, and build a restaurant that makes theft unlikely in the first place.

Why Restaurants Are Especially Vulnerable

The average restaurant has a perfect storm of theft risk:

• Fast-moving inventory
• Cash handling and cash tips
• High turnover
• Multiple access points to food, alcohol, comps, and discounts
• Shift-to-shift inconsistency
• Different levels of trust and supervision

Most theft isn’t a masked villain moving through the walk-in at midnight – it’s leakage: discounts that aren’t logged, comps given without manager approval, inventory slipping out the back, or register drawers that don’t balance but never had a clear trail.

And during holidays, when you add fatigue, more guests, seasonal hires, and higher inventory levels, vulnerability increases.

What Employee Theft Looks Like in Restaurants

Here are the most common forms, and the ones you should be especially mindful of during busy season:

Register Theft

• Unrecorded sales
• Skimming from cash transactions
• Overcharging and pocketing the difference
• Drawer shortages that repeat without documentation

Unauthorized Discounts or Comps

• Comping friends without approval
• Discounting checks to cover free food/alcohol
• Using fake voids to remove items from the bill

Most restaurants lose more money from misused comps and discounts than direct cash theft – because it’s easy, quiet, and harder to track.

Food and Alcohol Loss

• “Sweethearting” food or drinks for friends
• Unauthorized meals
• Walking out with product (especially expensive alcohol or steaks)
• Fudging waste counts or portion sizes

Time Theft

• Padding hours when clocking in/out
• Buddy punching (clocking in for someone else)
• Staying clocked in during breaks

Vendor or Purchasing Collusion

• Inflated orders
• Side deals with delivery drivers
• Inventory signed off without verification

This one isn’t common, but when it happens, it’s expensive.

The Real Cost Isn’t Just Money – It’s Culture

When one employee crosses a line, two things happen:

1. Margins shrink quietly, often until you catch it months later.
2. Trust erodes, especially if honest employees feel like someone is getting away with something.

Resentment in a restaurant spreads fast.

In restaurants with no prevention systems, honest employees notice the gaps first. They may stay silent at first, but over time, they become discouraged – not because they want to steal, but because the workplace feels unfair and unmanaged.

Prevention isn’t about catching “bad people” – it’s about protecting good people from inheriting a messy culture.

How to Prevent Theft Without Becoming a Detective

You don’t need suspicion – you need systems. Systems create transparency and help everyone know what’s expected.

Here are practices that dramatically reduce risk without turning the workplace into a surveillance state:

1. Clear Cash-Handling Rules

• Limit who can handle cash
• Require manager sign-offs for voids, comps, and drawer counts
• Safe drops during shifts (not at the end of the night)
• Reconcile drawers regularly and immediately

Consistency is key — inconsistency is where both mistakes and theft blend together.

On mid-shift drops – If you don’t want to leave cash in the building overnight, use a bolted drop safe during service and consider sealed night deposits with dual custody after close. This limits employee access, reduces end-of-shift vulnerability, and keeps cash secured without requiring drawers to stay full until morning.

2. POS Accountability

One of the strongest theft-prevention tools is simple:

Every employee should have a unique login with clear permissions

Red flags become obvious:

• A server whose voids + discounts are higher than average
• Discounts outside normal business patterns
• Repeated late-night comps or promos
• Transactions logged under someone else’s ID

Good POS systems make this easy – you don’t need forensic spreadsheets.

3. Inventory & Food Management

High-margin items deserve attention:

• Alcohol
• Steaks or seafood
• Specials
• Prepared desserts or pastries
• To-go packaging

Theft here isn’t always malicious – sometimes people don’t understand that unapproved take-home is still theft.

Make rules simple:

• Free shift meals should be tracked
• Waste should be logged
• Excessive portions should be calibrated
• Lock down storage areas as needed

Inventory loss isn’t just shrinkage – it reduces consistency and increases food costs.

4. Audit Your Discounts and Comps Weekly

You don’t have to read every check – just monitor patterns.

Ask:

• Who gives the most discounts?
• Are discounts tied to legitimate guest issues?
• Do comps happen when managers aren’t present?
• Are promo codes being used unusually?

Patterns tell almost everything.

You don’t need suspicion if you have visibility.

5. Create a Culture That Reduces Temptation

People are far less likely to steal when they:

• Feel respected
• Understand expectations
• Are treated fairly
• Believe hard work is rewarded
• See managers involved and present

The strongest loss prevention tool in any restaurant isn’t a camera – it’s a culture where expectations are clear and trust goes both ways. When expectations are visible, feedback is consistent, and systems feel fair, employees don’t just follow rules – they take genuine ownership in protecting the business.

Most workers want to do the right thing, especially when they understand what that looks like in real situations. When your team feels respected, supported, and free to ask questions without judgment, you’ll prevent more loss through openness and shared accountability than you ever will through surveillance or suspicion.

Most employees want to do the right thing – especially when they know what “the right thing” looks like.

If You Suspect Theft: Proceed Carefully

This is where empathy matters.

Restaurants are emotional workplaces – fast decisions, stress, late hours, holiday fatigue, and financial pressure all play a role. Don’t assume intent or malice without documentation.

Here’s the safest approach:

Document facts before acting

• POS logs
• Drawer counts
• Video if applicable
• Incident timelines
• Inventory discrepancies

Don’t jump to confrontation

• Ask questions, not accusations
• Make space for explanations – sometimes mistakes mimic theft
• Stay calm and professional

Involve HR or ownership before termination

• Wrongful termination is a real legal risk
• Especially if documentation is weak or inconsistent

Avoid public discipline

• Avoid gossip or humiliation
• Protect dignity, even when someone leaves

When theft happens, it’s tempting for managers to “make an example” – especially if emotions are running high or other employees are watching closely. But public discipline rarely strengthens culture. It can create fear, gossip, and lingering resentment among staff who had nothing to do with the incident.

Confidentiality and professionalism, on the other hand, reinforce maturity and fairness. When leadership handles issues quietly, respectfully, and with clear documentation, employees learn that accountability doesn’t have to be humiliating or punitive. That builds more long-term trust than any public show of force ever could.

Accountability is real, but it’s measured, respectful, and never weaponized. Your staff doesn’t need to witness consequences to understand expectations – they need to see leadership who treats difficult situations with fairness and discretion.

When Theft Is Proven: Frame It as System Improvement

The easiest trap is assuming one dishonest person is “the entire problem.”

More often, theft reveals a system gap:

• unclear cash procedures
• too much POS access
• inventory without tracking
• waste that isn’t logged
• inconsistent management presence

When someone crosses a line, the lesson isn’t just discipline – it’s clarity.

Use the moment to:

• Improve policies
• Re-train staff
• Re-set expectations
• Tighten access controls
• Rebuild transparency

This protects future employees more than punishment ever will.

Final Thought: Awareness Is Not Paranoia

The holidays bring opportunity and chaos. If business is hopping, staff are tired, shifts are heavy, and cash is flying around – visibility matters.

Prevention is not about assuming the worst in people.

It’s about protecting your margins, supporting honest staff, and reinforcing a clear culture:

We take care of guests, we take care of each other, and we take care of the business that supports us.

A theft-resistant restaurant is not a fearful one – it’s a confident one.