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Theft Thursdays: New Software Attacks Fraud

Posted by Avero Team | November 07, 2013

Theft Thursdays: New Software Attacks Fraud

Theft and fraud are a less-than-popular topic in the restaurant industry, and many operators are forced to accept loss as a fact of doing business. According to the National Restaurant Association, theft and fraud amount to a staggering 4% of industry sales, so Avero built Loss Prevention restaurant software to stop restaurant fraud and deter future theft.

Fraud can be tough to battle too because it’s always evolving, and without the proper controls and oversight in place, it can be easy for good money to walk right out your front door. An example of this is the Item Transfer Scam (also known as the “Wagon Wheel” scam):

  • How it works: A guest orders a burger and an iced tea. After her meal the server presents her check and she pays with cash. In the restaurant POS system, the server transfers the iced tea off the check, closes out the check with just the burger and associated burger price in cash, then pockets the cash for the iced tea. When the next table comes in and someone orders an iced tea, the server uses the check with the iced tea item already on it to start their tab. If they pay with a credit card the scam is over, but if they also pay in cash the server can repeat the process and transfer the iced tea to a new check, pocketing the cash a second time.

  • Why it works: Servers who are successfully stealing with this scam are banking on the fact that there are some items that are ordered by almost every guest. Since iced tea and other soft drinks are common at lunch, the server is confident that the next table he waits on will have at least one iced tea, so he can reuse the check with that item on it. Nonalcoholic beverages are a common target for this scheme because servers can pour as many as they need over the course of their shift. When an item needs a ticket from the POS or involves the kitchen staff or bartenders, it’s less likely that the server will use this scheme.A

  • How to uncover it: Look for employees with low sales of server-controlled items over a significant period of time (ex: two months). Make sure to look at one server vs. others who work in the same meal period and revenue center for a true apples-to-apples comparison. If you suspect an employee might be engaging in suspicious behavior, manually audit several checks during a typical shift. If you see one table that has an iced tea on it, make sure at the POS that the check has that same item, and make sure it’s still there after the check is closed.

Don’t have time for all that manual work? Avero Loss Prevention can do it automatically, helping you improve your restaurant profits. Learn more and get started today, and check out other common restaurant fraud scams: