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«Attractions and Entertainments» issue 25, October 2018 (magazine of Russian Association of Amusement Parks and Attractions)

NO LONGER OFF THE BOOKS. Increasing revenue by preventing abuse at work

NO LONGER OFF THE BOOKS. Increasing revenue by preventing abuse at work

In early 90s, Russian legislation allowed gambling, representatives of which treat money with utmost care due to high turnover and excess profits. There were many electronic roulettes and slot machines in our entertainment centers, generating so much money that embezzlement became a commonplace.

Crafty croupiers were stealing chips, cashiers were withholding cheques, putting the money into their pockets, and bartenders were under-filling glasses and selling alcohol off the books. But we outplayed them all. We spotted every defection and came up with means to discourage and control cheaters.

Our parks have a great history of preventing abuse. We have caught red-handed, and learnt to curb, dishonest employees from every sphere of entertainment. From a small children center to a bar, from a night club to a bowling hall, from a billiard lounge to a large entertainment park.

Our parks have a great history of preventing abuse. We have caught red-handed, and learnt to curb, dishonest employees from every sphere of entertainment. From a small children center to a bar, from a night club to a bowling hall, from a billiard lounge to a large entertainment park.

Why it is crucial to fight abuse

Absence of a system of financial security and abuse control jeopardizes your company, threatening from 10 to 30% of turnover. If you want to increase your profits, you should pay attention to decreasing abuse before boosting your sales.

Abuse can corrupt almost every section of an entertainment center. Most money is lost in sales, warehouse and procurement processes, and imputation of working hours.

Sometime ago I consulted an administration of a night club on how to increase sales. As I inspected the club, I saw at once that the administration totally ignored the necessity of a monitoring system. Bartenders were stealing up to 20k rubles every shift by taking from cash register and cheating with alcohol at the bartend.

I remember one scheme practiced by those mischievous bartenders. A false customer — generally a bartender’s friend — orders a 500 rubles’ cocktail but pays 1000 rubles. The bartender serves a drink… and returns 4500 rubles. Repeat several time, and you can imagine how much money they were splitting after the shift!

This and other schemes are easily prevented by certain methods aimed at minimizing abuse.

This and other schemes are easily prevented by certain methods aimed at minimizing abuse.

Methods of minimizing abuse

It is enough to implement a basic set of monitoring measures to not only curb abusers but also to improve the overall performance of an entertainment center (quality of service; analysis of sales, employees’ efficiency, and attendance; loyalty to police for providing information, etc.).

To minimize abuse, you should:

  • Implement a system of electronic sales record (iiko, r-keeper, tillypad etc.);
  • Set up a surveillance system
  • Implement work time tracking

There’re many more methods aimed at refining the monitoring system of an entertainment center, but I reveal them only after those basic conditions are met.

It is enough to implement a basic set of monitoring measures to not only curb abusers but also to improve the overall performance of an entertainment center (quality of service; analysis of sales, employees’ efficiency, and attendance; loyalty to police for providing information, etc.).

Abuse at points of sale

There are some sections of entertainment centers where employees tend to practice abuse more often than in others:

  • Ticket offices at entrances and card offices;
  • Pay-gates;
  • Bars;
  • Cafes and restaurants (waiters, kitchen staff, cashiers);
  • Arcades and ticketed attractions.

Still not convinced that abuse is the ultimate evil? At our entertainment center, there’s an 8-hour training course on how to fight abuse at points of sales. If you asked me to list all possible violations and methods of preventing them, I would have to write several articles. But for now, forgive me and allow me to share just a portion of advice.

There are some sections of entertainment centers where employees tend to practice abuse more often than in others

Blind cash collection

I recommend everyone to implement blind cash collection at every point of sale, which decreases opportunities for employees to mishandle cash. We learnt this method from casinos.

Two most important duties for cashiers and bartenders are accounting and balancing; in other words, making sure that information from cheques corresponds to how much of the product has been sold, and how much of it has been left. For instance, there were 100 portions of tea allocated for a shift. 60 of them had been sold, which would mean that there should be 40 portions left at the kitchen and 60 portions’ worth of money left in the cash register. Really simple to count, isn’t it? Accounting can be done daily, weekly or monthly. Frequent accounting increases control but costs additional money.

If your accounting works well, it may be time to move to the next level — blind cash collection. Especially if you suspect your bartender of under-filling. He or she may be serving two cocktails at the price of three, putting a leftover third into the pocket.

Blind cash collection eliminates the risk of losing profits to such schemes. How? Easy. At any moment, a cash collector will visit every point of sale and collect all the revenue without accounting (except change). Cash is put in an envelope, sealed, marked with date and time of collection, and signed by an employee in charge of the cash register and the cash collector himself. The envelopes, of course, cannot be tampered. You can even send a cash collector more than once a day if your sales rate is high enough.

Envelopes with collected cash are submitted to the head cashier. After the shift, the head cashier, together with the bartender, opens all the envelopes and count the bartender’s yield for his or her shift. If everyone has been honest, everything will match perfectly. If someone has abused their position, it will be easily detected. In such a case, the employee who has committed abuse should be fined (or fired), and, perhaps, you should set up surveillance.

I recommend everyone to implement blind cash collection at every point of sale, which decreases opportunities for employees to mishandle cash. We learnt this method from casinos.

Bar system control

If you specialize at selling tons of alcohol, you should probably implement a bar system control (which, in its turn, should be compatible with iiko and r-keeper systems).

Every bottle is equipped with special geysers with electronic microchips. As result, a bartender cannot open a bottle before a cheque is printed or an order is registered. The bar system control costs a lot, but it may save you much more if you sell alcohol in great amounts. Generally, if your revenue is over 300k rubles per point of sale, the best course of action for you is to implement this system.

If you specialize at selling tons of alcohol, you should probably implement a bar system control (which, in its turn, should be compatible with iiko and r-keeper systems).

Off the books discounts

More often than not cashiers charge a diminished price, as if there was a discount or a promotional offer, but take full amount of money from a customer. It can also be a special discount for friends. This is how you can prevent such abuse:

  • Set up surveillance. A supervisor selectively inspects if a customer has submitted documents or tokens necessary for getting a discount or taking part in a promotional offer;
  • Secret customers can compare sums printed on cheques with current pricing;
  • Every discount, promotional offer or special card must be registered and audited in iiko.

More often than not cashiers charge a diminished price, as if there was a discount or a promotional offer, but take full amount of money from a customer. It can also be a special discount for friends.

Inspection of employees at entrance

A special entrance for staff deals with half cases of abuse. Just make sure they don’t bring any of these to the entertainment center:

  • Any products sold at the entertainment park;
  • Alcohol;
  • Dairy (unless there’s a special fridge for staff);
  • Apples, oranges and other fruits used as ingredients in food or decoration for drinks;
  • Bottles or other vessels with water or other beverages must be sealed, as some employees may try to bring alcohol in them. Moreover, even if everything’s alright, drinking must be allowed in a special dining room for staff, because drinks that are not included in marketing contracts must not be seen in the entertainment center;
  • Home-cooked food (unless you have special conditions for storing it). It’s better to offer employees premium discounts on your own food so they can dine comfortably at the center.

A special entrance for staff deals with half cases of abuse. Just make sure they don’t bring any of these to the entertainment center

Ghost employees and imputed work hours

Work hours imputation is easily detected. Ideally, salary budget should not exceed 30% of turnover. If this number is higher, it is highly likely you’re doing something wrong — or someone has done something wrong to you. In both cases, inspection is necessary.

If the administration doesn’t count work hours, and there is no autonomous system of work time logging, sooner or later employees will start imputing. Smoke, coffee or lunch breaks will stretch for hours, while the boldest of employees will leave work early or not come at all.

Don’t you indulge these parasites! Set up an electronic system of personnel records. For example, in our centers, each employee gets a personal card. They come to work, register — and their time starts ticking. Of course, you’ll also want to set up surveillance or hire a receptionist; else these cards will probably be just pieces of plastic. You have to have control over your employees.

This is just a portion of what I can tell about preventing abuse at work. Most importantly, it is doable. There is plenty of methods: guards, inspectors, surveillance, electronic sales record, disperse control on alcohol, and many more. Choose whatever you need to solve a specific problem, or meet security requirements. But remember that one method is never enough; you have to implement a complex of methods to have full control over your staff, money and property.

Pavel Timets, expert in building and managing entertainment centers

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Как дьявол кроется в деталях, так и корпоративная культура состоит из множества мелочей.

Source: «Attractions and Entertainments» issue 25, October 2018 (magazine of Russian Association of Amusement Parks and Attractions)

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