We understand, running a restaurant isn’t easy. Between managing food costs, keeping staff engaged, and making sure customers leave happy, there’s already a lot to juggle.
The result is that it can be all too easy to ignore the things that don’t seem to make a direct impact on your day-to-day. There’s one challenge many operators underestimate and it’s likely hitting their bottom line hard… restaurant employee theft.
It doesn’t always look like a dramatic cash grab from the register. More often, employee theft happens in quiet, everyday moments – a refund processed without a customer, a free meal slipped to a friend, or a drink overpoured a little too generously.
These may not seem significant in isolation, but when you add them all together… they are.
According to industry estimates, employee theft accounts for up to 75% of inventory shortages in restaurants and about 4 percent of total sales. On thin restaurant margins, that kind of loss can be the difference between profitability and another stressful quarter.
Employee theft doesn’t just shrink margins, it:
Hurts profitability – even small leaks compound quickly on tight margins.
Wastes management time – chasing down shrink, doing manual audits, investigating refunds.
Damages culture – honest staff get frustrated when dishonest behavior goes unchecked.
Impacts customer experience – service gaps, long waits, or inconsistent food quality are often downstream effects of employee theft.
And because much of it happens in small, repeatable ways, theft often goes unnoticed for months, until profits take a hit.
The good news? Once you know the most common ways employee theft happens, you can put systems in place to prevent it. In this article, we’ll walk through seven types of restaurant employee theft – complete with examples, warning signs, and practical strategies to protect your margins.
Protect your restaurant from employee theft
Discover the 7 types of theft and strategies to prevent them.
Refunds, discounts and voids are common in restaurants. Orders get entered wrong, food gets sent back, mistakes happen. But dishonest employees can take advantage of that flexibility.
The scam usually looks like this… process a refund. discount or void, pocket the cash, and move on, all without a customer actually being involved.
Warning signs:
High numbers of refunds, discounts or voids on a particular employee’s shifts.
Refunds processed late at night or during slow periods.
Refunds without a customer present on video.
Prevention strategies:
Integrate POS with video so you can quickly see if a customer was present during the refund.
Set up exception reporting to flag high refund/void activity for review.
Train managers to spot patterns across employees and shifts.
Above average discounting
Learn how Solink automatically monitors your discount activity with thresholds, signaling fraud, mistakes or poor training.
Let’s start with the most straightforward kind of theft: skimming cash.
This happens when an employee takes money directly from the register before it’s reconciled. It might be small amounts slipped out during the shift, or larger grabs at the end of the night.
Warning signs:
Frequent cash shortages when reconciling tills.
Inconsistent cash handling compared to other shifts.
Employees reluctant to let managers count or audit drawers.
3. Sweethearting (freebies and unauthorized discounts)
Sweethearting is when employees give free food, drinks, or unauthorized discounts to friends, family, or even themselves. On the surface, it might not seem like a big deal, what’s one free meal? But when it becomes a habit, it adds up fast.
Warning signs:
Spike in discounts during a particular employee’s shift.
Customers leaving without receipts.
Staff consistently serving the same group of “friends.”
Prevention strategies:
Use exception reporting to track discount activity by employee.
Pair every discount with video to ensure it matches a real customer order.
Set permissions in your POS so only managers can authorize certain discounts.
Finding sweetheart events
Learn how Solink gives you a searchable feed of flagged transactions with video evidence.
Sometimes theft doesn’t involve the register at all – it’s food or inventory walking out the back door. Employees may snack excessively during shifts, take leftovers home, or worse, stash inventory to resell.
Warning signs:
Inventory shrink that doesn’t match customer sales.
Staff hanging around stock areas unnecessarily.
Back-door deliveries and exits without oversight.
Prevention strategies:
Install cameras in back-of-house and stock areas.
Match delivery receipts to video footage of actual deliveries.
Conduct random inventory audits.
5. Time theft
Time theft might not seem like “theft” in the traditional sense, but it’s still money out of your pocket. Employees might clock in early, clock out late, or have coworkers “buddy punch” them in when they’re not even on-site.
Warning signs:
Labor costs don’t match sales performance.
Employees consistently logging time outside scheduled hours.
Clock-ins with no corresponding video of the employee actually being present.
Prevention strategies:
Integrate scheduling and timekeeping with video verification.
Use manager sign-offs for schedule exceptions.
Consider biometric or photo-based time tracking.
Investigating time theft
See how Solink handles time theft when employees may be stealing minutes or even hours from you while on the clock.
This is one of the most damaging forms of theft, and also one of the hardest to catch. Employees may work with vendors to accept short shipments, inflated invoices, or substitute cheaper products – splitting the profit difference.
Warning signs:
Vendor invoices don’t match delivery inventory.
Deliveries occurring at odd hours.
A single employee always handles vendor interactions without oversight.
Prevention strategies:
Match invoices to video of deliveries.
Require dual sign-offs on vendor receipts.
Rotate staff responsibilities for receiving shipments.
7. Overpouring and comped drinks
In bars and full-service restaurants, alcohol sales are critical to profitability. But they’re also a hot spot for employee theft. Bartenders may overpour to “hook up” friends, comp drinks without approval, or pocket cash sales without ringing them up.
And even if this isn’t “employee theft” the simple mistake of overpouring still costs your business money.
Warning signs:
Bar inventory doesn’t line up with sales reports.
Certain bartenders consistently have lower beverage profitability.
Spike in “comped” drinks on one shift.
Prevention strategies:
Compare bar inventory usage against POS data.
Use video analytics to review bar activity when comps or cash transactions spike.
Train staff on proper pour sizes and reinforce accountability.
Why Solink is the number one prevention platform against restaurant theft
With Solink’s video security and data analytics platform, your business can:
Use the cameras you already own (no costly hardware swaps).
Link every refund, void, discount, or no-sale directly to video.
Compare performance across multiple locations in real time.
Protect margins while saving hours of investigation time.
Ready to see how Solink can help your restaurant prevent theft and protect profits? Book a demo today.
Frequently asked questions about restaurant employee theft
What is restaurant employee theft?
Restaurant employee theft refers to staff taking money, food, or other resources from the business without authorization. It can take many forms, from skimming cash at the register to giving friends free meals, stealing inventory, or even inflating vendor invoices.
How common is employee theft in restaurants?
Employee theft is more common than many operators realize. Industry research shows it accounts for up to 75% of restaurant inventory shortages and roughly 4% of sales. Because much of it happens in small, repeatable ways – refunds, discounts, free drinks – it often goes unnoticed without proper oversight.
What are the main types of restaurant employee theft?
The most common types include:
Cash register theft (skimming)
Refund and void fraud
Sweethearting (unauthorized freebies or discounts)
Overpouring or comped drinks
Food and inventory theft
Time theft (buddy punching, false clock-ins)
Vendor collusion (accepting short shipments or inflated invoices)
What are the signs of employee theft in a restaurant?
Red flags include frequent cash shortages, high numbers of voids or refunds, unexplained inventory losses, unusually high discount activity, labor costs that don’t match sales, and employees reluctant to let others audit their work.
How to prevent employee theft in restaurants
The good news: there are effective ways to fight back without adding more stress to your plate.
Strengthen cash and inventory controls
Standardize reconciliation processes.
Limit access to registers and stockrooms.
Train and empower managers
Teach them how to spot suspicious behavior.
Give them the tools to review transactions and video quickly.
Use technology to bridge the gaps
This is where Solink shines:
Video + POS integration: Every transaction linked to video so you can see what actually happened.
Exception reporting: Automatically flag high-risk activity like refunds, voids, and discounts.
Remote visibility: Review incidents across locations from anywhere.
Data-backed coaching: Use real clips to train staff and reinforce best practices.
With these tools in place, theft becomes much harder to hide, and much easier to prevent.
Reduce losses with effective employee theft prevention
Find out how to stop the 7 most common types of restaurant employee theft.
