Bar Frauds

Profit Potential of Alcoholic Beverages

• Lower Product Cost• Lower Labor Cost

• Lower Labor Wages for Bar Production Personnel(Bartenders) as Opposed to Food Production Personnel

• Lower Operating Costs (Ware Washing, Linen,Maintenance, Cleaning, Supplies, Energy and So Forth

• Lower Investment Expense• Beverage Systems Less Complex; Therefore, Should

Be Easier to Control• BUT!!!

BAR FRAUDS

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BAR FRAUDS• Substitutions• Under pouring/Over pouring• Bring in Own Bottles• Free Pouring• “Free” Drinks• Unrecorded Drinks• Watering Bottles• Banquets• Ringing Wrong Price• Full bottle versus portion

BAR FRAUDS - Continued• Alteration of Checks• Draft Beer• Misuse of Promotional Materials• Soft Drinks• Reusing Guest Checks• Breaking Empty Bottles• Assume guest is gone

STANDARDS• Glassware• Measuring Devices• Pouring Procedures and Techniques• Garnishing• Pricing• Ordering and Calling• Check Writing• Drink Formulas - Recipes

STANDARDS• Station Setup• Cash Handling• Register Procedures• Replenishment of Bar Stock (Par stock)• Ordering Stock from the Storeroom• Bottle Arrangement in Bars and Storage Areas

STANDARDS • Back bar

• Front bar

• Under bar

Automatic Beverages

Control System

Controlled access to the system

• “Every waiter has it’s own personalized ID device”

• There are several access levels, depending on the responsibility of each user

Various Forms

Facing the Law

Approaches to Monitoring Beverage Operations

• Cost: determining the cost of beverages sold and comparing that figure with standard cost

• Liquid measure: comparing the number of ounces sold with the number of ounces consumed

• Sales values: comparing the potential sales value of beverages consumed with actual sales revenue recorded

The Cost Approach• Are cost-to-sales ratios being maintained?• Beverage cost is determined from inventory

and purchase figures (like food)• Opening inventory plus purchases = value of

beverages available for sale• Bar inventory differential must be included• Beverage cost percent %= beverage cost /

beverage sales• Calculation per category is possible

The Cost Approach – Adjustments

• Food and beverage transfers• Cost of mixers• Cost of garnishes• Consumed by management or employees• Beverages used in promotional activities

Exercise

The Boss Bar

• Standard Portion Costs• • 750 ml bottle contains 25.4 ounces• • Portion size = 1.5 ounces• • 25.4 ÷ 1.5 = 16.9 drinks per bottle• • Allowing for evaporation and spillage of .4• oz.• • 16.9 – 0-4 = 16.5 portions

Standard Portion Costs• Calculation:• $13.85 ÷ 16.5 oz. = $ 0.83 standard cost

per drink (for straight drink with no mixer

Or• $13.85 ÷ 25.4 oz per bottle = $ 0.55 per

ounce• $ 0.55 x 1.5 portion size = $ 0.83

standard portion

Liquid Measure Approach – Ounce control method

• Involves taking daily inventory of bar stock to determine actual usage, which is then compared to usage that should have occurred relative to revenues

THE QUANTITY OUNCE METHOD

•The manager of the Daiquiri bar wishes to make aspot-check of rum sales record for comparison withrum inventory records for May 25th.•Opening rum inventory on that date was 6.4 bottlesand closing inventory was 4.1 bottles. Five full bottlesof rum have been requisitioned for the storeroom onthat day.•Bottle of rum contains 25 ounces.Analysis of the sales checks revealed the following:Drinks Quantity soldStraight rum (1 oz) 144Daiquiri (1 ½ oz) 8Cuba libre (1 ¼ oz) 8Rum Swizzle (1 1/8 oz) 8As manager would you be satisfied with the results?

Potential Sales Value Approach

• Determine the potential sales value of

each bottle and compare to actual sales

Potential Sales Value Approach - Example• 1 btl of Chivas Regal• 70 cl• 1 drink = 4 cl• 1 bottle = 70 / 4 = 17.5 drinks• 1 drink sales price = CHF 20.-• POTENTIAL SALES OF THE BOTTLE 17.5 drinks x 20.- = CHF 350.-