Restaurant Theft: 3 in 4 Employees Admit It — How I Steal From You | RTG Ep. 363

Chloe Rachel Howard grew up in her family’s restaurant. It opened in 1945 and ran for almost 60 years. She assumed it would be her career.

It went out of business due entirely to internal theft.

That is the whole reason this book exists, and it is why I wanted her and her co-author Jauna Werner on the show. I heard Chloe speak at RSPA recently and the statistics genuinely rattled me — and I have been in this industry for 30 years, watching this happen from the point of sale side of the table.

Why write a book about restaurant theft in 2026?

Because the conversation is nearly impossible to start, and somebody needed to start it on the operator’s behalf.

Chloe explained the trap from her years selling point of sale on the street. The main reason bars and restaurants bought a POS was that they needed control of their money — and nearly all of them had an internal theft problem. But raising it makes you the enemy.

As a consultant, if you start to talk about it, you almost become the enemy, because you’re insulting the restaurateur’s ability to hire and judge character. Oftentimes in mom and pop restaurants, their key employees are family members. And so to suggest that there’s a problem with theft is saying, hey, your sister’s a thief.

Chloe Rachel Howard, co-author, How I Steal From You

Her workaround for years was handing out a 2004 book called How to Burn Down the House, because it had the difficult conversation for her. Twenty-plus years later nothing had replaced it, and nothing covered the full surface — internal theft, customer theft, vendor theft, data breach risk. So she and Jauna wrote the replacement, partly as a tribute to the POS dealers who need a way to raise this without being the bad guy.

How big is restaurant theft, really?

Six billion dollars a year in the United States, per Forbes. But the aggregate number is not the one that got me. These are.

The data shows three out of four hospitality employees admit to stealing from their employer. And out of that 75%, 83% of the thieves are the most trusted people on the team.

Chloe Rachel Howard, co-author, How I Steal From You

The most helpful person. The eager right hand. Often a relative, a business partner, or a long-trusted vendor. Chloe said she and Jauna were shocked during research at how many CPAs were stealing from their hospitality clients.

The framework she gave for thinking about the workforce is the one I keep coming back to: 20% of people will never steal from you, 20% always will, and 60% will steal if you give them the opportunity.

That middle 60% is the entire game. It is not a hiring problem. It is a design problem.

What does restaurant theft actually look like?

Rarely hundred dollar bills out of the drawer. Mostly it is quieter than that, and the book breaks it into categories. A few that came up:

• The product pincher. Chloe’s favourite story is a chef at the Bellagio — a building with the security everyone has seen dramatised in the movies — who strapped lobsters to his legs with medical bandages to walk them out the back door. Others use bags, go boxes, or a stash by the dumpster.
• The side business. A chef using his employer’s product and his employer’s clock to prep food for a catering company he owned.
• The sweetheart. Jauna’s category for comping friends an appetizer or a round to earn a bigger tip, rationalized as, well, they only came in to see me.
• Ghost employees. Fake staff created by a manager or CPA, clocked in and out, wages funneled to the creator’s own account. Chloe says this showed up at quite a few restaurants in their research.
• Villainous vendors. A whole chapter, often involving collusion with someone on staff — short deliveries invoiced in full being the classic.
• The CPA. One case where a bookkeeper used the restaurant’s EIN and company accounts to buy electronics, with a friend at the vendor, and ran a resale business on the restaurant’s credit.

What about theft nobody intends?

This was the most useful part of the conversation for the average operator, because it is happening in your building right now and nobody involved feels like a thief.

Jauna’s example: most restaurants give staff free soda and coffee on shift. Younger staff drink energy drinks instead. They take a Red Bull from behind the bar and file it mentally under “my soda.” The cost structure is wildly different.

We came across one story where an owner was seeing such a problem with Red Bulls disappearing that he carried two different sizes — one behind the bar and one in a vending machine in the back for employees — so he could see if somebody was taking from the bar.

Jauna Werner, co-author, How I Steal From You

The mechanism Jauna described is the dangerous part. A new hire watches a two-year bartender crack a Red Bull and concludes Red Bull is fair game. Nobody corrects it. Within a year it is policy.

I have my own version of this, inherited from my father, and I do it at every restaurant: if I get a check for four people and the self-serve iced tea and soda are not on it, I hand it back and say there is something wrong with this receipt. The server asks what. I say, you go figure out what is wrong with it. Some genuinely forgot. Some were hoping I would tip on a bigger total and not notice. Either way, it is the restaurant’s money.

Is there a tax write-off for employee drinks?

There is, and Chloe confirmed the IRS rule still stands. This is the single most actionable thing in the episode and almost nobody I work with is doing it.

Bars and restaurants can write off the expense of employee beverages consumed while on the clock — and Chloe notes they are essentially the only business in the US that can.

The mechanic is simple. A manager opens a check at the start of the day. Every cook, server, host, busser and bartender rings their drink to it. At end of day you comp the check. Now you have a documented, deductible expense instead of inventory that silently evaporated. Chloe’s suggestion to me, knowing I am a POS guy: build a macro button on the sign-on screen that fires the beverage and prompts for the employee name.

Do the math on fifteen drinks a day at even half of menu price. It is real money, and it converts an untracked leak into a line item. That same “measure the thing that is quietly bleeding” logic is what Tom Woodbury and I dug into in Understanding Labor Leakage in Your Restaurant.

Do customers steal too?

There is a whole chapter on it, and two stories stood out.

The first is one many of us remember: the finger in the Wendy’s chili in California in the early 2000s. Chloe and Jauna interviewed the director of operations for that franchise. It was a customer scam — she obtained the finger through an acquaintance of her husband’s coworker, cooked it, brought it in, and planted it, hoping for millions. Wendy’s had done nothing wrong and Chloe puts the brand damage north of $20 million.

The second is active right now and far more likely to hit a normal operator. Jauna described organized rings running drive-by Americans with Disabilities Act lawsuits — someone quietly audits your restaurant for non-compliance and files suit. Not to get it fixed. To collect.

We’re clear in the book — ADA is a wonderful thing, and you as a business owner should be ADA compliant. But these people are not saying, hey, I don’t know if you noticed, but you guys aren’t compliant, you should go fix the bathroom. They’re specifically looking for where they can do frivolous lawsuits.

Jauna Werner, co-author, How I Steal From You

She cited an operation working the Port Orange and Daytona Beach area of Florida with hundreds of these filings, and a similar ring the California Restaurant Association flagged more recently. JD Miller and I covered the adjacent exposure — outside actors weaponising your online presence — in Restaurant Online Outrage: A Crisis Playbook — JD Miller.

Why does process prevent theft, not just waste?

Jauna calls herself an optimization geek — her background runs from semiconductor through healthcare into hospitality, and her first jobs were in restaurants. She is also a proud Taco Bell alumna, which is where she learned what real process discipline looks like: this hand grabs lettuce, this hand grabs cheese.

At the mom-and-pop end there is almost none. Training is being partnered with somebody else and left to chance. That is a service risk and a food quality risk, and it is also a theft risk — but she raised a consequence I had not considered.

What we found in our interviews and surveys is it’s actually a risk that you fire thieves and then you’re getting taken in for unemployment, because you didn’t have procedures around how to fire somebody for theft once you found it.

Jauna Werner, co-author, How I Steal From You

You catch them, you fire them, and you lose the unemployment claim because nothing was documented. That is a very expensive way to be right.

Her prescription is deliberately unambitious: it does not have to be fifteen SOPs in a binder nobody opens. Each chapter of the book ends in a checklist for exactly this reason. One page, easy to follow, built into the workflow rather than bolted beside it.

What are the first two things an operator should do?

Chloe put awareness first, and she means it structurally rather than as a platitude.

Awareness is your first line of defense. If you don’t know the scams and you don’t know the supervillains that are trying to take you down, you can’t protect yourself against them.

Chloe Rachel Howard, co-author, How I Steal From You

Then: make your staff aware that you are aware. A sign in the kitchen saying you know the scams, you do not tolerate them, and you will reward anyone who reports one. That lands on career criminals walking in the door and on shady vendors, not just on your own team.

The second is anonymous tip reporting, and Chloe’s reasoning is airtight. If 83% of thieves are the most trusted people on the staff, nobody will report without cover, because they fear retaliation. But it is nearly impossible to steal consistently without a colleague seeing it. Give the 20% who will never steal a safe channel, and you have surveillance you cannot buy.

On technology, Chloe was blunt about the gap between owning it and using it. Plenty of operators install cameras and then never monitor the feed or keep the recording, which makes it worthless. She recommends tying surveillance to the point of sale so the system produces actionable instances rather than footage nobody watches.

They don’t get into business because they want to be undercover cops. They get into business because they want to entertain guests and they want to cook. So don’t try to become something that you don’t want to be. Find the technology and put it in place to do that work for you.

Chloe Rachel Howard, co-author, How I Steal From You

Jauna added the one that costs nothing at all, and it is my favorite thing in the episode.

Become unpredictable as an owner. If they can’t predict when you’re suddenly going to pop in and be like, you ready to cash out the register? Here, I’ll help you with that. Hey, I see I have a delivery today — I’ll help you check it in.

Jauna Werner, co-author, How I Steal From You

The elegance is that it is framed as help, so an honest closer is simply glad of it. And it tells you two things at once: whether there is theft, and whether there is just a process gap. Her other point, which more operators need to hear, is that most restaurants already own loss prevention features they have never switched on — so sit down with your POS provider and ask for a loss prevention review of what you are already paying for.

Frequently asked questions

How much do restaurants lose to theft each year?

About $6 billion annually in the United States, according to the Forbes figure cited by Chloe Rachel Howard and Jauna Werner. Their research also found that three out of four hospitality employees admit to stealing from their employer, and that 83% of those who steal are among the most trusted people on the team.

Who steals from restaurants most often?

Trusted insiders. Chloe Rachel Howard’s framework is that 20% of people will never steal, 20% always will, and 60% will steal if given the opportunity — which makes theft a matter of operational design rather than hiring judgment. Relatives, business partners, long-standing vendors and even outside CPAs appear repeatedly in their research.

Can restaurants write off employee drinks?

Yes. Chloe Rachel Howard says bars and restaurants can deduct the expense of employee beverages consumed while on the clock, and are essentially the only US business type that can. The practical method is to open a check at the start of each day, ring every employee beverage to it, and comp the check at close so the expense is documented rather than lost as unexplained inventory shrinkage.

What is the fastest way to reduce restaurant theft?

Three low-cost moves. Educate yourself and visibly signal to staff and vendors that you know the scams. Provide a genuinely anonymous way for employees to report what they witness, since fear of retaliation is what keeps honest staff silent. And vary your own schedule so nobody can predict when you will appear at close, at a delivery, or for an inventory check.

Do restaurants need new technology to stop theft?

Often not. Jauna Werner points out that most restaurants already have loss prevention capability in the point of sale they are paying for and have never enabled it, and recommends asking your POS provider for a loss prevention review. Where cameras exist, Chloe Rachel Howard recommends integrating surveillance with the POS so the system surfaces actionable exceptions rather than footage nobody reviews.

Takeaways for operators

• Stop treating this as a character question. Sixty percent of people respond to opportunity. Remove the opportunity and you have removed most of the loss.
• Your most trusted person is the statistical risk — 83% of thieves sit in that group. Controls that exempt the trusted defeat themselves.
• Give honest staff a safe channel. Someone almost always sees it. Anonymity is the only thing that gets it reported.
• Ring and comp employee beverages. Legitimate deduction, and it converts a silent leak into a measured one.
• Write the termination procedure before you need it, or you will win the theft case and lose the unemployment claim.
• Be unpredictable, and frame it as help. Costs nothing, and surfaces process gaps as often as theft.
• Audit the tools you already pay for before buying more.

The book, the ledger, the kitchen poster and the training courses — including a shorter one built for front- and back-of-house staff — are all at howistealfromyou.com. Chloe and Jauna also train remotely and in person for larger operations and franchise groups. And if you would rather have a warm introduction, reach out to me and I will make it.

Want the whole conversation? Read the full transcript of this episode with Chloe Rachel Howard and Jauna Werner.

Thanks to our sponsors

This episode is brought to you by Restaurant Technologies, whose closed-loop cooking oil management keeps kitchens safer, cleaner and more consistent, and by Yelp, helping restaurants get discovered by the guests already looking for them.

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