Restaurant Insurance and Employee Dishonesty Coverage – Building A Bank In Your Cash Drawer

Have your employees been building a bank in your restaurant right under your nose?  I’m not talking about construction with bricks and mortar, but rather the art of stealing from you and from your customers.  If you find it by accident, you may think you have come into some additional money.  More than likely the opposite will be true; someone will have been stealing from you.

The bank building process begins with a dishonest cashier.  This cashier will find ways to build up an overage in your cash drawer which he or she will steal later.  If your cashier has a good understanding of your cash register operations, your audit routine and the supervisory skills of you management team, then that person can find opportune times to steal from you and from your customers while never leaving a shortage in the cash drawer.

This scheme typically starts with some opportunistic manipulation of the cash drawer during a sales transaction.  The sales cashier will manipulate the transaction in some way that leaves the cash drawer with an overage.  This may mean that they don’t give the customer credit for a special or a coupon, or that they simply void a transaction after they have charged the customer for the food.  Either way, they are stealing and building up an overage in the cash drawer.  They then create some way to keep up with the amount of overage in the drawer so that they can put that amount of cash in their pocket later when no one is watching.  They may use coins to keep up with the amounts – a nickel represents five dollars and a dime ten, or they may use sugar packets or toothpicks but they have to have some way to keep up with the amount of money in the drawer that will be over so that they can take the overage before the shift ends.

One of the best ways to protect against this kind of theft is to perform random mid shift checks on the drawer balance.  If your drawer is over, don’t celebrate, you didn’t just find money, you probably just found a thief.   You can also find aberrant results in your POS exception reports.   One particularly vulnerable spot for this kind of problem is with drive through windows where a cashier may work in isolation for a long period of time.

You should be up front and clear to all cashiers about what your expectations are from them and what consequences will result from over or under cash drawers.  Let them know that you will be conducting random mid shift cash drawer audits and that anyone caught stealing will be prosecuted to the fullest extent of the law.

To go along with the above actions, you should also be sure that you have employee dishonesty coverage added to your restaurant insurance package policy.  But don’t stop there, take a close look at the limit of coverage provided by your policy and make sure that it is enough to protect you from the worst case scenario of employee dishonesty.  Also make sure that the deductible on your policy is one that is affordable to you.  Last of all, some employee dishonesty policies require you to prosecute the employee in order to collect on the claim.  If you are soft hearted and would never put a former employee in jail, then you should find a policy that doesn’t require this or you should stop paying the premiums for this endorsement  that you will never use.

Clinard Insurance Group is an independent insurance agency with a niche specialty in restaurant insurance.  We insure more than 100 restaurants all across North Carolina, South Carolina, Tennessee, Georgia and Virginia.  We would love to help you with your restaurant insurance and help you obtain the coverage that lets you sleep at night at a cost that will truly bring a smile to your face.  Call us, toll free, at 877-687-7557 or visit us on the web at