Losses on Tap

Published in Bar & Beverage, Summer 2011:
Pour a little more, or give away free drinks: It’s an easy, though unethical and illegal, way for a bartender to win the favour of patrons and get bigger tips.

The practice of over-pouring costs bar owners buckets of money. It can be the difference between profit and loss for any fiscal year, so it’s a problem that has to be addressed.

Fortunately there are some good, reasonably priced solutions in the marketplace. Aids on offer include inventory software, portion-control spouts, meters on beer kegs, tap locks, and auditors who will keep track for you.

The good people of Atlanta-headquartered Alcohol Controls Inc. (ACI) can hook you up with nearly all of these options to reduce beer and liquor “shrinkage.”

“We try to have a little bit for everybody,” proclaims ACI president Mark Flaschner. “We do have quite a range.

“This is what we specialize in, and we’ve been doing this for 20 years now. We’re the longest-running and the largest provider of loss-prevention products that are geared towards the bar industry.”

He says there are “a lot of different ways you can go,” but seems to most strongly recommend the Eclipse system that is an upgrade of the popular Spirit system incorporating portion-control spouts and software that keeps track of how much is poured.

Eclipse tells the bar manager at the end of a shift how much was poured, which can be checked against what the bartender entered into the POS till.

Inventory loss is a “pretty serious” problem, Bevinco marketing manager Krista Dinsmore says from Toronto. “On average, bars are losing 20 per cent of potential sales, so you’re looking at thousands of dollars every week, depending on the size of a bar.”

Dinsmore says some inventory loss occurs due to bartenders unintentionally pouring too much into a shot or wine glass. Other times, it’s because of accidental spillage. Still other times, the loss is due to dishonest practices.

Flaschner agrees, but hastens to add that we shouldn’t get too dim a view of staff. “Think of it this way: When you’re driving down the highway, everybody’s going over the speed limit until they see a cop with a radar gun,” he says. “And the reason is that people will tend to push the edge of the envelope if they fear no repercussions. That’s just human nature.

“It doesn’t mean that there aren’t honest bartenders out there, but typically when bartenders know that their manager doesn’t know how much they’re pouring, they’re going to give away some free drinks. They’re going to over-pour some drinks to get more in tips. They’re also going to pour drinks and collect money and not ring up some drinks.”

He says it’s vitally important for management to keep a vigilant eye on inventory because “if the manager doesn’t know if the bartenders are stealing, then typically you’re going to have an operation where bartenders are cutting into the profits.”

While ACI (www.alcoholcontrols.com) offers gadgets and software, Bevinco has real live people come into establishments for inventory control. For a weekly fee, Bevinco will weigh and count all bottles (opened and unopened), calculate from that data how much was dispensed since the previous audit, and compare that to point-of-sale numbers.

All that data is uploaded into Bevinco’s software system to create a variance report which is submitted to the client establishment.

As part of the service, Bevinco (www.bevinco.com) also puts a sticker on every bottle it inventories to let bar staff know the situation is being monitored.

Bevinco’s auditing service reduces inventory loss by more than three-quarters to less than five per cent, according to Dinsmore.

Flaschner cautions that the battle against shrinkage “doesn’t have to be an us-versus-them type of scenario. I always tell managers, ‘Be nice to your bartenders. Just tell them what your expectations are and then hold them accountable to it.’

“You never have to be upset or mean with them. You just say, ‘Hey, Jimmy, I love you to death, but you poured $1,000 in liquor and you only rang up $700 in liquor sales today. That’s not acceptable. I don’t know what you’re doing, and it really doesn’t matter what you’re doing. I just want you to ring up sales properly. If you can’t do that, you can’t work here.’”

Your shrinkage-stopping options are varied, and include free-pour spouts such as the ones sold by Arizona-based BarVision, which actually transmit data on volume poured to a computer, which records the data in real time.

Whatever your choice, the important thing is that you tackle the problem.

As ACI’s Flaschner says: “The bottom line is, bars should use some type of controls. Whether they get it from us or someone else, they’re going to benefit hugely if they put in controls.”