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How to Stop Discount Code Employee Theft At Your Restaurant

Posted by Dawn Lampert on Jul 31, 2016 8:48:13 PM

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Prevent Employee Discount Theft with These Steps

Discount code fraud is one very common form of employee theft inside restaurants. Whether they’re using the codes to get discounted meals for their friends, family, or themselves, it’s a practice that can cost a single restaurant more than $1,000 each year. For owners and operators of multiple storefronts that cost can quickly snowball.

How can you identify this type of fraud and what can you do about it? Keep reading to learn more about some of the warning signs and what you can do to protect your bottom line.

 Identifying employee discount code fraud

Manager discounts, senior discounts, military discounts, standard employee discounts… due to the variety of discounts a QSR might have it’s no surprise discount code theft is so common. 

Hopefully, your restaurant is already using a robust and powerful point-of-sale (POS) system. These tools will help you track which discount codes are being used and when. Here’s what you should look for:

  • Has there been an increase in the usage of a certain code, like a military discount? Compare the data over time to determine whether there has been an unexplained increase.
  • Are certain employees ringing up more discount codes than others? Your POS solution should also allow you to track transactions by employee. If certain employees are ringing up far more discount codes than others you should further investigate the possibility of theft.

 Best practices for preventing discount code employee theft

Thankfully, you can prevent discount code fraud and theft. With some pre-planning and continued attention to the effort it’s not all that difficult to do. Consider implementing these best practices at your own restaurant:

  • Update manager codes frequently. How often do your managers change their access codes? Create a company policy that dictates they should change their codes regularly and urge them not to share their codes with other employees.
  • Always know which employees have access to codes. QSR operators should know which employees have access to specific codes, including codes for cash registers.
  • Get notifications on transactions with large discounts. With the right POS system you can set alerts for certain types of transactions. Set yours to ping you on transactions with large employee discounts and then review the transactions manually. For added clarity and security you can even combine your POS data with advanced video surveillance.
  • Conduct regular audits and review reports. Again, your POS system is your best friend in this scenario. Set aside time each month to conduct audits, review reports, and other important housekeeping tasks.
  • Offer employees free or highly discounted meals. One way to prevent discount code abuse is to offer free or extremely discounted meals to employees. Profits may take a hit, but the eventual savings might surprise you.
  • Communicate with all employees. Finally, make sure that every employee knows how you’ll be monitoring discount codes. Explain that you’ll be reviewing certain transactions, monitoring who uses codes, and any other techniques you choose to employ.

What are your experiences with discount code fraud? How did you identify it, and what did you do to end those thefts? Start the conversation in the comments!

Topics: Loss Prevention, Restaurants, theft, video surveillance, Employee Fraud

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Envysion is a leading provider of cloud-based video driven business intelligence that helps companies deliver on their brand promise. At Envysion, we marry operational, financial and employee metrics together with video and sophisticated analytics and make it easy-to-use and accessible, offering visibility into every store…every location…every day…from anywhere.


Shawn Bristow


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