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The Scoop on Restaurant Loss Prevention and Cash Management

Friendly's Restaurants' Ernie Patnode approaches cash management with a lot of common sense, a little technology and, yes, politeness

By Scott Berinato

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This starts to get into something that’s important, the mind-set of the person stealing, because they’re probably thinking what I just said, “This big company isn’t going to miss one burger.”

The rationalization process is so deep. Maybe you can’t believe the things people will do or say to justify their actions. Not many people, when confronted, are going to step up and say, “I did it and I was wrong.” But that’s life. You’ve got to understand that it makes sense to them, even if it makes no sense to you. You have to operate on the premise that there’s always a need, and if we supply the opportunity, we’re going to get beat.

There’s something empathetic about the way you say that, as if you understand, or at least accept, that this impulse to rationalize theft is part of life.

It comes down to people. Not everyone is dishonest, but for some portion of the population, it’s part of survival. This industry, there’s a lot of work that goes into it. A lot of luck too. You don’t always have control over hires. I think our people understand that. They do a good job with it. You know there are no guarantees, but as long as you’re working together under sound policies, and you minimize opportunities, you hope that your losses are minimal.

>What we’re really talking about is the classic fraud triangle. You’ve accepted the rationalization some people will have. You know they have motivation. All that’s left is the opportunity.

And opportunity is provided when you fall down on your procedures.

Take cash handling. It’s more of the same strict policy focus: You count cash in a locked room. The count is verified independently. Cash is put in tamperproof bags. When delivering a cash deposit, the bags are concealed and those deposits are always, always done during daylight hours. The concept is simple: The fewer people who have access, opportunity, the less problem you have. And people won’t think to steal if they never see anything to be stolen. They never see the opportunity.

None of that is particularly high-tech.

Some of our lowest-tech policies are most effective. When you bleed the register for instance, you put the money in an envelope and seal it. Write your name across the back so that someone trying to get at that money has to break the seal and then replace the envelope with a new one and try to forge your name. That’s not easy to do, so now they’ll think twice about trying.