A long time client of ours was propositioned to become a partial owner of another establishment. He wanted my staff to go in and check how the operation was being run so that he could get a third party judgment view of the restaurant. The spotter’s report (truncated as many parts needed to be removed for privacy reasons) was rather stunning at how horribly this establishment is being run.

Bartender Summary

• Bartender: Xxxxx female with long curly blond hair. She wore a black shirt with blue jeans. She was audibly identified as Xxxxx by servers.

The agent was seated at the bar and greeted by the bartender approx 2 minutes later. The bartender was friendly, but not overtly courteous or positive. She did not smile often, and she did not interact with patrons in a friendly or positive way.

The bartender’s pours were consistently accurate. She poured a steady 4 count (4 count = 1 ½ oz) for cocktails and seemed to use correct recipes.

All of the drinks she served included correct garnishments, and straws. She was not consistent with using cocktail napkins at the bar. She would place drinks directly onto the bar top.

Bar tabs were kept on paper tickets that the bartender would stick onto the metal freezer with a magnet. The bartender would mark tabs on the refrigerator. The agent did not see any supplemental accountability measures in place to ensure that the drinks were being marked on the tab. In other words, the agent feels that there is no way to know if the bartender was, in fact, was ringing in all the drinks served.

The agent also found that the bartender was accepting many server call outs. Servers were generally be at a table near the kitchen area and call out to the bartender to get a drink for them. The bartender would give the drink to them over the bar and take no money from the server in exchange for the drink. The agent also found this very troubling since there is no way to know if the server was charging for the drinks or not.

The bartender would frequently leave from behind the bar for extended periods of time. The bartender would disappear leaving the servers and patrons at the bar to literally fend for themselves. The agent observed servers go behind the bar on numerous occasions getting bottled beer. The agent did not see any server pour their own cocktail, but did help themselves to bottled beer. Needless to say, this is very troubling and opens the door wide open to potential abuses by servers.

Finally, the agent found the bartender eating a meal while on duty behind the bar. She stood in the middle of the bar area next to a table that held a plate with some pasta on it. She stood eating and then would serve drinks while she ate without washing her hands. This is an Arizona Health Code Violation. The agent found it unprofessional for an employee to be eating while on duty, especially while at their post.      

Wait Staff Summary

• Server: Xxxxx female with long brown hair and a slender physique. She identified herself as Xxxxx.

The agent was seated and almost immediately approached by the server. Xxxxx carried herself with a positive demeanor and was friendly when talking with patrons. She asked for a drink order and wrote it on a pad. She then went over to the poker tables and took numerous orders from the poker players as well. She then went to the kitchen area and started to sort her orders on her tray. She used separate papers to write the orders on, so by the end of her round she had a stack of papers to go through. She took a few minutes to sort herself out, and then started to input the kitchen orders and (surprisingly) went behind the bar to start getting her own beers. She served the poker players drinks, but did not establish a form of payment. She did not collect cash or credit cards while she served drinks. The agent does not know which system she was using to ensure the right drinks were put on the right tabs, especially for the poker players.

Unlike many of the poker player’s drinks, the agent’s drink order took a very long time. The agent’s drink order was taken at 7:35, but were not delivered until 7:50. The agent believes a 15 minute wait time is far too much for a simple drink order.

Xxxxx seemed knowledgeable about the items on the menu. She did not offer appetizers or make any suggestions to the agent. She made several returns to the agent to ask if the agent was ready to order food, but did not think it important to ask to start with an appetizer or to make a suggestion to help facilitate the decision.

Xxxxx doubled as the server for tables and the poker room. The agent believes that Xxxxx found it difficult to handle the work load. She seemed constantly flustered and rushed. She frequently forgot drink orders, and took a very long time to bring drinks and food to be brought out to the table.

She even forgot silverware from time to time. The agent overheard one patron very upset that he was served a steak without silverware to eat it with. Then when he requested silverware, he wasn’t brought knife to cut the steak with.

The agent believes having more than one server to service the poker area would have been prudent. There was another server on hand, but she seemed to only focus on a section of tables. There was definitely a need for more help in the poker area for more efficient service.

The dining area was always in need of some pick ups. There were a lot of empty bottles, and used glassware all over the poker area that needed to be retrieved. The floors also needed to be spot swept and clean up from time to time. Trash built up on the ground, especially under the tables, during the evaluation period.

The agent’s food order took 20 minutes to be brought out to the table. When it was finally brought out, there was no side items brought along with it. The agent requested side items, and received them several minutes later.

The food presentation needed work as well. The presentation looked boring, and mostly thrown together.

When the agent was ready to cash out the tab, Xxxxx asked the agent for a credit card without giving an itemized tab or a total first. The agent received a credit card transaction receipt but no itemized receipt. Agent finds this very disconcerting and a loop-hole for theft opportunity.

Management Summary

The manager on duty was Xxxxx, the owner of the establishment. He was observed to be imbibing beverages at the bar. He was very visibly intoxicated. At one point, the agent observed him pushing kamakazi shots to the poker players. He was also talking to patrons quite often and being very friendly.

The manger did approach the agent at one point and ask how the experience was going. He was friendly and nice.

He did seem somewhat helpful to staff, however it would have been a big help to bus tables and pick up the trash in the poker area.     

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

BARTENDER THEFT: Gave Free Drink to the Liquor Agent, Bar Theft, Bad Service, and Liquor Liability Issues.

Bartender Summary:

• Xxxxx:  Xxxxx male with dark brown spiked hair.  He wore the xxxxx male bartender xxx.

The agent and associate found an open spot at the bar and sat down.  Xxxxx quickly approached us and gave us a greeting.  He offered us a drink and the agent and associate each ordered a beverage.  Xxxxx did not ask for ID before preparing and delivering the beverages.  Upon delivery of the beverages, Xxxxx asked whether we wanted to order food.  The agent declined, and Xxxxx politely introduced himself and told us to let him know if we needed anything else.  He entered our order into the POS, but did not quote a price or ask for a credit card to hold the tab.

The bar was relatively slow during the period of this observation, and Xxxxx appeared to be very lax as a result.  He spent a fair amount of time eating food at a corner table of the room.  During these breaks, he would generally have the MOD stand in for him at the bar.  Furthermore, there was one female, Xxxxx with brown hair and glasses, who appeared to be an employee but was not in uniform, and was going behind the bar to give Xxxxx hugs and joke around with him.  She was also observed standing at the end of the bar eating food.

Xxxxx was somewhat inconsistent in his approach to using the POS.  On most occasions he would enter orders into the POS immediately; however, the agent observed two occasions in which he did not do so. 

• At approximately 9:22pm, Xxxxx was observed serving a beverage to a customer without entering anything into the POS. 

• Furthermore, for the agent’s final round, Xxxxx did not enter the beverage into the POS. 

Although this was only two occasions during the observation, it represented a significant percentage of observed transactions given the volume of business.  This style of bartending can easily lead to mistakes and/or the giving away of free beverages.  Ultimately, the agent’s rogue beverage never made it onto the final itemized bill. If the bartender is delivering free drinks to a bar theft detection Agent, then management can interpolate there are some serious integrity issues present.

The agent was also concerned with Xxxxx’s adherence to liquor laws.  Xxxxx was not observed checking any customers for identification, the agent and associate included.  Furthermore, Xxxxx appeared to be indifferent about the level of intoxication of his customers.  The agent observed two individuals that were visibly intoxicated during the evaluation. 

Xxxxx continued to deliver beers to the customers, even after they began exhibiting signs of intoxication.  The agent observed one of the men dropping his phone as he tried to complete a call.  When he was finally able to complete the call, the content of his conversation was overheard and focused on how him and his friend were heavily drunk and that they needed whomever to come pick them up.

AZ TITLE 4, CHAPTER 3
4-244. Unlawful acts

14. For a licensee or other person to serve, sell or furnish spirituous liquor to a disorderly or obviously intoxicated person, or for a licensee or employee of the licensee to allow or permit a disorderly or obviously intoxicated person to come into or remain on or about the premises, except that a licensee or an employee of the licensee may allow an obviously intoxicated person to remain on the premises for a period of time of not to exceed thirty minutes after the state of obvious intoxication is known or should be known to the licensee in order that a nonintoxicated person may transport the obviously intoxicated person from the premises. For purposes of this section, "obviously intoxicated" means inebriated to the extent that a person's physical faculties are substantially impaired and the impairment is shown by significantly uncoordinated physical action or significant physical dysfunction that would have been obvious to a reasonable person.

At approximately 9:48 pm, the agent observed Xxxxx pouring about a 5 count of Bushmills into a highball glass.  As he balanced the beverage with cola, he added a short additional tail of Bushmills for good 6+ count measure and delivered it to a customer (4 count = 1 ½ oz).

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

Bartender Summary

• Bartender Xxxxx:  Xxxxx male, short brown hair, 5’8”

The agent and associate were seated at the bar top and greeted by Xxxxx.  Xxxxx was friendly and placed two cocktail napkins down on the bar top in front of us with the logos facing towards us.  Xxxxx asked us what we would like to drink, and at the same time handed us menus with the drink menu page facing up.  The agent and associate ordered two drinks, and Xxxxx immediately moved to prepare the drinks. 

Xxxxx did not ask for ID, even though both the agent and associate are under 30 years old. 

Xxxxx prepared both drinks and delivered them to the agent and associate.  Xxxxx was seen using a jigger most of the time and an ice scoop at all times. 

Xxxxx then moved back to the kitchen and retrieved chips and salsa.  At 8:00pm the agent and associate ordered a few appetizers, one of which was delivered at 8:02pm and the rest were delivered at 8:10pm.  Xxxxx checked back on our how we were enjoying both our food and our drinks multiple times during the evaluation period.  When the agent and associate were finished eating, Xxxxx offered to-go boxes and additional drinks.  Xxxxx delivered the drinks in a timely manner, and when he delivered the drinks he also asked if we would like to order a dessert, and he mentioned fried ice cream in particular. 

Xxxxx presented the check to the agent and associate even though we did not request it.  The check was presented in a clean check presenter and was verified to be accurate.  The agent placed payment into the check presenter, and Xxxxx processed the tab for payment quickly. 

Starting around 9:00pm, Xxxxx started to seem like he wanted to go home, and he made loud verbal announcements to his friends at the bar that he did not want to stay very late.  This exclamation made the agent and associate feel very rushed to leave, Xxxxx felt fairly accessible, though he did spend a considerable amount of time conversing with patrons seated at the bar he seemed familiar with.  The bar top and area behind the bar were both very clean and well organized.  Xxxxx did not put tab receipts on the table in front of patrons.

Two separate suspicious activities were observed. 

The first activity dealt with a lone female patron who was observed to be friends with or related to one of the female servers.  This patron was seated at the bar top and greeted by Xxxxx by first name.  The patron ordered a Jack and Coke, and Xxxxx poured the cocktail correctly using a jigger.  Xxxxx provided this patron with the cocktail, but Xxxxx did not record this drink into the POS. 

The second incident that took place involved two female patrons who appeared to be off duty employees from within the resort.  Many of the employees in the establishment knew these two patrons by first name, and they were greeted very warmly.  Xxxxx poured both of the female patrons tall cocktails, using an astonishing ten count pours, without a jigger (4 count = 1 ½ oz).  Xxxxx provided the patrons with these cocktails and was never seen registering these drinks into the POS.           

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
PI Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Toll Free: 800-880-0811

Bartender Summary                                                                                      

• Bartender 1: A Xxxxx Xxxxx in her late Xxx, x’xx”, with an average build. She had xxx hair with xxxx worn in a xxxxx. She wore xxxxxxxxxxxxxxxxxxxxxxxxx xxxxxx xx. The agent’s receipt stated her name to be Xxxxx.

At the time when the agent entered the bar there were plenty of seats available. He found a seat at the bar and began waiting for service. At the time that the agent entered, Xxxxx was taking a take-out order from a guest at the bar. It appeared that she was very unfamiliar with the POS system as this took a very long time. Also during this time four more guests entered the bar, two at a booth and two more at the bar itself.

Instead of acknowledging any of the guests who had just entered Xxxxx chose to make drinks for tickets that had printed out. At this time the bartender was visibly flustered between making drinks and serving guests. After waiting over five minutes with no eye contact the agent was finally acknowledged by Xxxxx. Management should instruct Xxxxx acknowledge new customers and in the very least, give them some sort of eye contact. A 1.5 second eye contact and simple nod tells the customer that they know that the employee knows they are there and will get to them. Being outright ignored while the bartender fields drink tickets is borderline maddening.

Xxxxx asked what the agent would like to drink and for identification after the agent stated his order. Xxxxx quickly presented the drink with a beverage napkin and moved on to the other guests.

She did not offer chips/salsa or a menu.

Xxxxx repeated this pattern of service with the other patrons in the bar. She was sure to enter each drink into the POS as she made it. This slowed her down considerable due to her unfamiliarity with the system. After getting drinks for the patrons in the bar Xxxxx left the bar area.

Throughout the agent’s visit Xxxxx would leave the bar unattended for long extended periods of time. On two instances she returned with take-out orders, but even then the agent felt the large amount of time spent away from the bar was unjustified. Most of the times Xxxxx left the bar there were guests that needed drinks or refills.

Towards the end of the agent’s visit he sat with an empty drink for almost ten minutes while the bartender said she was, “Going to get a Coke.”

After almost ten minutes of sitting without any further acknowledgement the agent took it upon himself to ask for a menu. Xxxxx provided the menu promptly and at this point also realized she had failed to offer anybody chips and salsa. She quickly beckoned another employee named Xxxxx and stated that she needed chips and salsa for everybody in the bar. Once again, nearly ten minutes after the agent had seated himself.

Soon thereafter chips and salsa were provided to the agent and each other guest in the bar. Unfortunately the chips and salsa were not accompanied with napkins or silverware of any sort.

The agent decided which item from the menu he wanted and closed his menu as a non-verbal gesture that he was ready to order.  He made eye contact with Xxxxx several times hoping she would come over and take the agent’s order; she did not. The agent waited another ten minutes while the bartender left from behind the bar and chatted with other employees about personal matters in a loud manner.

Once again, the agent took it upon himself to ask if he could order some food. The bartender then moved to the POS and turned back to the agent waiting for his order, rather than coming to the agent to have a more personal approach. That was an astonishing breech of service etiquette…I couldn’t believe it actually was happened. The agent ordered his meal, which it appeared Xxxxx did not how to find in the POS system. Another employee was present at the well, whom Xxxxx asked where to find the dish.

Xxxxx did not offer any up-sells or suggest an appetizer. She in fact closed the window before asking if the agent wanted to order anything else; he did, which he then communicated to her and she returned to the POS to input it.

The agent overheard Xxxxx speaking with another patron in the bar explaining her history with the establishment. She mentioned that she had worked there 12 years before and had just recently returned. The agent took this conversation as an explanation as to why she was unfamiliar with the POS and as to why she was so easily flustered.

The agent’s dish was delivered shortly thereafter by his bartender. She had yet to drop off napkins and silverware but quickly did so thereafter. Xxxxx asked the agent if he needed anything.

The agent requested a side item for the meal at this time. She never ever, brought it out.

There was no check-back performed during the meal.

The agent’s drink level ran low for the majority of his visit. He would have been inclined to have more drinks than he did but quite frankly, he did not have that much time to spare in between beverages.

Eventually the agent was able to order another beverage after he asked the bartender for one. Xxxxx asked if the agent would like a lime wedge with his drink. The agent was forced to decline to the fact that he had previously seen Xxxxx handle the fruit garnishes with her bare hands, and prior to that had seen her cough directly into her hands several times without washing them (AZ Health Code Violation). Not only is this a health code violation, but it’s really gross. If Agent was not on duty, most certainly would have tabbed out, left, and never returned to this establishment.

At the conclusion of the agent’s meal his dishes as many others at the bar sat unbussed for some time.

When Xxxxx finally removed the dishes she offered the agent dessert or additional drinks. The agent declined the dessert offer but mentioned that he may stay to have more drinks.

At this time the agent could have actually used another drink, unfortunately this was the time Xxxxx departed to get a Coke as previously mentioned. Once she returned the agent had been holding an empty drink for quite some time. Even then Xxxxx did not immediately offer another beverage.

The agent had an itemized receipt placed in front of him throughout his visit. Xxxxx would update this receipt with each new item the agent ordered. The agent reviewed his tab before presenting payment. He then presented payment in form of a credit card which sat on the bar top for five minutes before it was processed.

Xxxxx grabbed the card and the agent’s itemized tab. She then took the itemized receipt and threw it into the trash and ran the credit card. She returned the credit card with two copies of the receipt. Oddly though, the total the agent was charged was significantly lower than what it should have been.

The agent suspects Xxxxx removed all drinks from the tab in an effort to garner a higher tip. Theft Occurrence here is highly suspected; however, the agent was not able to question the total due to Xxxxx once again not being available.

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Mobile: 602-622-0875
Toll Free: 800-880-0811

Bartender Summary

1. Bartender 1:  Xxxxxx, 6’3”, Xxxxxxxx, in his early twenties, with very short hair or a shaved head, wearing a black cap.  He wore a greenish-brown tee shirt and jeans and had tattoos up both arms.
2. Bartender 2:  Xxxxxx, 5’9”, Xxxxxxxx, in his early twenties, lean build, with very short hair, wearing a backwards cap.  He wore a black tee shirt and jeans.
3. Bartender 3:  Xxxxxx, 5’10”, Xxxxxxxx, in his early twenties, medium athletic build, with short hair or a shaved head, wearing a black backwards cap.  He wore a gray tee shirt, jeans, and a leather bracelet and had tattoos up his left arm.
4. Bartender 4:  Xxxxxx, 5’9”, Xxxxxxxx, in his early twenties, with short dark hair and a goatee.  He wore a red tee shirt and jeans.
5. Bartender 5:  Xxxxxx, 6’2”, Xxxxxxxx, in his early twenties, with short dark hair and a goatee.  He wore a black polo shirt and jeans.
6. Barback:  Xxxxxx, 5’6”, Xxxxxxxx, in his early twenties, thin build, with short dark hair, wearing a black backwards cap.  He wore a gray tee shirt and jeans.

Bartender 1 approached within thirty seconds of sitting at the bar.  He asked what the agent would like to drink.  The agent ordered drinks, and Bartender 1 had an opportunity to ask for a liquor preference, but did not.  Bartender 1 placed napkins on the bar, went to pour the drinks, and served them.  Bartender 1 did not ask for identification; the agent appears to be in his late twenties or early thirties.  He asked if the agent would like to start a tab, collected the credit card, recorded the order and placed a playing card on the bar in front of the agent saying, “This is for you.”  A couple minutes later, Bartender 1 quickly asked, as a side note, if the agent would like a menu.  The agent declined.

When the agent’s drink was a little more than one-third full, Bartender 1 asked if the agent would like another drink.  The agent declined.  Later when the drink was completely empty, Bartender 1 asked again.  The agent asked about the drinks on the menu.  Bartender brought the flip cards and pointed out the specialty drink menu.  Agent ordered a drink.  Bartender 1 asked Bartender 2 if they had a certain ingredient before preparing the drink.  Bartender 1 informed the agent that they were out of one of the ingredients, but did not offer an alternative.  The agent ordered a different drink.  Bartender 1 immediately prepared and served this drink.  He recorded the drink in the register.

Bartender 1 was polite but only somewhat attentive.  At times he was seen checking diligently on patrons, and at times he was very inattentive to the customers while he was distracted by other employees or certain customers who looked to be friends.  Bartender 1 was polite to all customers, but only friendly to a few.  His friendliness appeared to correlate with the amount of drinks ordered and/or his relationship with the customer, i.e. whether the customer was a friend, a regular or someone new.  He was very friendly when speaking to two patrons about the incentives they would get when purchasing gift cards.  He specifically talked to them about the times he would be working so they could buy the gift cards from him.

Bartender 1 was seen mixing a drink in the blender.  At approximately 8:13 PM, he poured some or all of it into a solo cup and placed it on the bar away from any patrons.  The cup stayed on the bar for at least twenty or thirty minutes, seemingly untouched, before it suddenly disappeared.  The agent does not know what happened to it, or who/what it was for.

Bartender 1 was heard asking whether two patrons wanted a refill of their wine.  When they declined, he asked “What if I buy them?”  Then he told them to let him know when they were ready for the refills at around 8:27 PM.  The agent wonders whether his offer had anything to do with the bottle of wine almost being empty.  About a minute later, Bartender 1 opened another bottle and poured the offered drinks.  The agent did not see Bartender 1 record the drinks anywhere.

At around 8:40 PM, a patron, whom Bartender 1 referred to as “Xxxxxx,” approached the bar.  Bartender 1 served Xxxxxx a bottle of beer and a dark liquid shot.  After a few minutes Bartender 1 appeared to enter these drinks into the register for a tab located in the very top row of the playing card slots on the wall.  Bartender 2 was seen chatting with Xxxxxx a few times, as well.

Bartender 1 became especially inattentive to the agent later towards the end of the visit, and passed by several times without checking in.  The agent tried to catch his eye to cash out, but could not.

Bartender 1 was seen drinking out of a capped solo cup most of the time; however, he was also seen drinking a dark liquid out of a bottle from the opposite side of the bar once around 9:02 PM.  The agent believes this bottle was capped and placed either under the bar or in an ice bucket after Bartender 1 drank from it.  It was unclear what type of drink was in the bottle; however, it would be easy to use it for an alcoholic beverage.

Bartender 1 was also seen throwing various items at the wait staff, other bartenders and the barback to engage in horseplay at different times throughout the evening.

Bartender 2 asked the agent if he would like another drink a couple times.  He commented positively on the agent’s drink choice, the one time he filled a drink order.  He also checked back on the drink after a few minutes to ask how it tasted.  Bartender 2 was attentive when he was present on the agent’s side of the bar.  He was also consistently attentive and friendly with all customers.

Bartender 2 was seen checking a cell phone, one that resembled a Blackberry that was placed between the two registers on the west side of the bar.  He did not pick it up, but checked it once after the agent heard a message-like beep, and again a couple times later.  The agent knew he had checked the phone because the screen was lit up after he passed the registers.  Bartender 2 was also seen placing an open beer bottle under the bar; the agent saw the beer become frothy after opening it, so the beer was unsuitable to serve.

Bartender 3 was working the outside bar, but came in a few times to pour draft beer.  He was always in a hurry and never spent more than a couple minutes inside.  At approximately 8:14 PM Bartender 3 was pouring a beer while he took a shot of dark liquid out of a translucent plastic throw-away cup.  It was unclear whether this was liquor; however, it seemed unlikely, due to the color and consistency of the liquid, that it was soda.

ADLLC Violation
TITLE 4, CHAPTER 3
4-244. Unlawful acts
12. For a licensee, when engaged in waiting on or serving customers, to consume spirituous liquor or for a licensee or on-duty employee to be on or about the licensed premises while in an intoxicated or disorderly condition.

Bartender 4 began working behind the bar ten to fifteen minutes before the agent left for the night.  Bartender 4 appeared to get settled and jump right in asking if patrons needed anything.  He asked if the agent needed another drink a couple times when he passed.  On Bartender 4’s second pass, he closed out the agent’s tab when asked.  He asked whether the agent wanted to use the credit card that was securing the tab.  The tab was itemized and quickly presented.  Bartender 4 was very accommodating and pleasant.

Bartender 5 began working the bar just after Bartender 4 did.  He also settled in quickly and started making the rounds.  He asked the agent once for another drink order.  He was seen interacting with the guests pleasantly and appeared to be friendly.

Barback was seen hustling in and out of the bar area restocking glasses.  At times he joked with other employees, but in a rather loud and sometimes obnoxious way.  He was also seen drinking from a Red Bull can twice, once at approximately 7:52 PM and another time around 8:29 PM, both times from behind the bar.  He was very industrious, performing his duties efficiently.

Overall the bartenders ran the bar efficiently and followed proper procedures and recorded all drinks after serving them with two exceptions noted: the earlier mentioned free wines; and a manager, subsequently referred to as Manager 2, verbally called out an order at approximately 8:18 PM.  The agent did not notice a ticket or any movement to record this order by Bartender 1.

The bartenders pulled tickets and filled those orders almost immediately.  The bartenders poured consistent 4 count, 1 ½ ounce drinks.  Cash transactions appeared to be handled properly, and credit cards were secured for all other transactions.  Unless noted previously, staff drank from capped Solo cups.

The bartenders were friendly, overall, though Bartender 1 seemed to be more friendly and chatty with some patrons than others.  They worked the bar area fairly well together, again with Bartender 1 losing interest at times.  The barback and bartenders also seemed to forget they were working at times and became engaged in their own conversations and horseplay.

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Mobile: 602-622-0875
Toll Free: 800-880-0811

Exotic Embezzling: Investigating Off-Book Fraud Schemes

By Thomas Buckhoff and James Clifton

For obvious reasons, cash is the asset most often stolen by dishonest employees. Fraudsters typically target cash as it enters or leaves the business. Thoroughly understanding the controls and procedures in place for processing cash flowing through a business is of primary importance when conducting a fraud examination. Inadequate cash flow controls, especially over substantial amounts, allow dishonest employees to divert cash into their own pockets. Understanding these controls allows investigators to generate ideas, known as fraud theories, that describe how someone could steal cash from the organization without getting caught. These ideas can be categorized as either on-book or off-book fraud schemes.

Historically, law enforcement and financial investigators are reluctant to investigate off-book fraud schemes due to their lack of direct, documentary evidence. The case study below illustrates various methods effectively used to detect and investigate off-book fraud schemes. Such indirect methods include financial statement analysis, undercover surveillance, invigilation, and admission-seeking interviews.

On-Book and Off-Book Fraud Schemes

Cash larceny involves the theft of cash after it has appeared on a company’s books. Such schemes are called on-book frauds because an examination of the victim company’s records can easily reveal the cash shortage. Here, the company typically knows that a theft has occurred. On-book frauds can be categorized as billing, payroll, expense reimbursement, check tampering, or register disbursement schemes.

Skimming is an example of an off-book fraud, which involves theft of incoming cash before it enters the accounting records. Thus, no record of the fraud exists on the company’s books. Skimming typically entails selling goods or services to a customer, collecting the customer’s cash payment, and making no record of the sale. The victim generally does not know that a theft has occurred. Off-book frauds cannot be detected by examining the company’s books and records and generally are categorized as skimming, unrecorded sales, understated sales and receivables, or theft of checks through the mail.

Case Study: Northern Exposure

Northern Exposure (all names in this case study have been changed) was a gentleman’s club featuring exotic dancers. Its primary revenue sources were cover charges and food, beer, and liquor sales. A recent local ordinance outlawed the type of entertainment offered by Northern Exposure. The club’s manager, however, successfully petitioned the city council to obtain an exemption, and Northern Exposure was allowed to continue operations in a competition-free environment. The substantial effort by the manager on the club’s behalf earned her the owner’s trust and loyalty. In the initial fraud investigation interview, the owner said that anyone could be a suspect—except the manager.

Because of the exemption, the club’s profit potential was enormous. Northern Exposure generated huge amounts of incoming cash, because no credit cards or checks were accepted. However, a huge risk existed that employees would figure out a way to divert incoming cash into their own pockets.

Larry Swenson, Northern Exposure’s owner, was not satisfied with the 10% margins being realized. He engaged two certified fraud examiners to determine why the club was not generating the 35% margins he had expected. They embarked upon a typical fraud examination, whose steps include understanding cash controls, generating fraud theories, collecting and evaluating evidence, estimating losses, assisting in filing claims or bringing charges, and making recommendations.

Understanding Cash Flows

By interviewing Swenson and other personnel, the fraud investigators learned that cash flowed into the business as follows:
Customers paid a $6 cover charge to enter the club. No receipt was given, nor was a head count made. Customers placed orders for food or beverages with the servers. The servers started out with $40 in a cash pouch. They paid the bartenders for their orders from this, then collected payment from the customer. At their shift’s end, the server gave the initial $40 back to the manager and kept the difference as tips. At the end of the night, the manager counted the cash and closed out the cash registers; the cash was deposited by the manager the next morning. Changes in beer and liquor inventory were not reconciled to the drinks rung into the cash register, nor were the register tapes reconciled to deposits listed on the bank statements.

Generating Fraud Theories

The fraud examiners determined that it would be relatively easy for employees to steal and not be caught, based on the control levels they discovered. They developed the following fraud theories:

• Employees collecting the $6 cover charge could pocket some of the money or allow free admission to friends.
• Servers and bartenders could get drinks for customers, not ring them into the registers, and pocket the cash received from the customers.
• Anyone with access to the cash registers (i.e., servers, bartenders, and the manager) could simply take cash directly from the registers.
• The manager could perpetrate any of the schemes available to the employees, and could steal part of the deposit.

Off-book frauds such as the first two theories are called skimming and are essentially unrecorded sales. The second two would be considered on-book frauds. Because there was a transaction record, the fraud could be detected by reconciling the cash register tapes to the deposits. In Northern Exposure’s case, however, cash register printing ribbons were not replaced on a timely basis, resulting in illegible tapes.

Collecting and Evaluating Evidence

Indirect investigative methods were used to test the fraud theories. Financial statement analysis is one such method that can be used to test all four fraud theories presented. If employees are indeed stealing cash from the club, then the actual sales markup-over-cost ratios are expected to be less than the budgeted ratios. Accordingly, the fraud investigators determined the actual markup-cost ratios for beer and food sales. Beer was purchased for $.60 per bottle, then sold to customers for $3 each, a markup of 500%. Food items costing $5 were sold to customers for $12.50, a 250% markup. One year’s budgeted revenue was calculated, based on cost of sales and expected markup ratios, then compared to one year’s actual revenue (see Exhibit 1). The significant differences in ratios clearly supported the fraud theories—in fact, food sales were less than their cost of sales! Using this indirect investigative method, the total estimated annual fraud loss due to skimming or cash larceny was $379,974.

The investigators knew that the club had a big problem with fraud; determining which employees were responsible came next. Undercover surveillance can be used effectively for identifying dishonest employees. Posing as customers, a team of six trained fraud investigators (with experience as bartenders and servers) spent a collective 40-hour week at the club observing the employees’ activities and behavior. This surveillance revealed that 90% of them, including the manager, regularly stole cash from the club, with little regard to subtlety. The reason that employees never complained about salary levels, despite low base wages and a lack of raises, became clear. In fact, several servers and bartenders had been there for years, which is highly unusual for this type of club. The lead investigators communicated their findings to Swenson, who, though concerned, was reluctant to take action without more substantive evidence of employee theft.

Estimating Losses Incurred

To more firmly establish the fraud losses and estimate their amount, the fraud investigators conduced a week-long invigilation. Invigilation creates a strict internal control environment so that opportunities to commit fraud are virtually eliminated and a fraud-free profile can be established. The cash received and deposited during the invigilation is then compared to the periods before and after. As an indirect investigative method, invigilation can be very effective in estimating fraud losses. The key to an invigilation’s success is making the employees think that any theft during that period will be detected. Instilling the perception of detection in this case was accomplished by sending in the same team of six investigators to watch the employees for one week. The club’s employees and manager were informed that the investigators were there to make sure that every dollar collected from customers made it into the bank at the end of the day and that changes in consumable inventories were properly accounted for. During the invigilation, the investigators conspicuously watched employees handling cash, conducted surprise cash counts, reconciled changes in inventory to cash register tapes, monitored end-of-night cash counts, and witnessed the daily cash deposits.

The first day brought an incident that greatly heightened the perception of detection. Meals were served downstairs, away from the live entertainment area. Suspecting the single server working downstairs of skimming money from food sales, one of the investigators conducted a surprise cash count and reconciled cash rung into the register to meals prepared by the cooks. The server had skimmed $25 in the first hour she worked. When confronted with the evidence, the server confessed and was immediately terminated. News quickly spread to the other employees, who realized that their activities were indeed under close surveillance. No other employees were caught skimming during the remainder of the invigilation.

During the invigilation’s first night, a Friday, $8,300 in cash was deposited into the bank—the largest sum for one night in the entire 15-year history of the club. This occurred on what was considered a “slow” night—unlike the previous week, which had seen near-record attendance. The manager and employees all soon realized that setting such a record on a slow night reflected poorly on them. This convinced Swenson that his employees were stealing from him, and he wanted to fire everyone on the spot. The investigators persuaded him to allow the invigilation to continue for the entire week as planned. The results of the week-long invigilation are summarized as follows:

Gross cash receipts during the invigilation were $30,960, compared with $25,775 the previous week and $22,006 for the annual weekly average (see Exhibit 2). The revenue during the week of invigilation exceeded the average weekly revenue by $8,954 and the previous week’s revenue by $5,185, despite being a slow week. The above differences implied that at least $259,250 and as much as $447,700 was skimmed per year. (After changes were implemented following the investigation, the remaining nine months’ sales were $300,000 higher than for the same period in the prior year.)

Swenson no longer doubted that his employees were stealing from him. As noted earlier, Swenson had had difficulty believing his manager was stealing because of her efforts to exempt the club from the city ordinance. It became apparent that these efforts were motivated by a desire to protect her illicit cash flow.

Employee interviews were held during the week of the invigilation. Their purpose was twofold: to further enhance the perception of detection during the invigilation period, and to provide employees with an opportunity to report any fraudulent activities. Very specific questions were asked during the interviews, based upon information from the prior undercover surveillance and the ongoing invigilation. While no one admitted to stealing, they did implicate fellow employees; many claimed that manager Betsy Smith was the primary thief.

Filing Claims and Pressing Charges

During her interview, Betsy Smith was confronted with the evidence from the undercover surveillance, invigilation, and employee interviews. After 2 Qs hours, she admitted to stealing almost $100,000 over three years. Her admission was converted to a written statement, which she ultimately signed. The statement detailed the amounts she had skimmed, when she had done so, and the various techniques (skimming from liquor sales, bank deposits, video sales, and food deliveries) she had used. An attached summary totaled the funds skimmed by source. Since evidence collected in resolving off-book fraud schemes is mostly indirect and circumstantial, obtaining a signed admission statement greatly facilitates the filing of employee dishonesty insurance claims or criminal charges. In this case, such a claim was filed by the fraud investigators on behalf of Northern Exposure.

The insurance company restituted Northern Exposure for the maximum coverage amount provided by their policy, $50,000. Clearly, the coverage amount was inadequate given the exposure to risk for such a cash-intensive business. As required by the insurance provider, evidence collected during the fraud examination was turned over to local law enforcement for prosecution.

Making Fraud Prevention Recommendations

Cash-intensive businesses (e.g., bars, restaurants, casinos, convenience stores, movie theaters) are vulnerable to off-book fraud schemes. Few people will steal if they think they will be caught and suffer serious negative consequences. Accordingly, the most effective deterrent is to instill this perception of detection in employees’ minds. In Northern Exposure’s case, the two assets most susceptible to theft were cash and inventory, especially the beer and liquor inventories. Consequently, better internal controls were needed to safeguard those assets.

The following internal controls were implemented:

• Liquor and beer inventory access was restricted to one person, the head bartender, establishing responsibility for inventory shortages.
• A meticulous physical inventory was taken, with liquor bottles weighed both before and after each night’s shift. The change in inventory was reconciled with the cash register receipts, providing an independent check on how much cash should be deposited for any given night.
• Cash registers were closed out by the night manager, who had no access to the registers during the shift. The cash deposits were also made by the same individual. The next day the general manager would reconcile copies of the cash registers tapes to the deposit slips. The general manager also performed bank-to-book reconciliations at the end of the month.
• Financial statements were analyzed monthly to determine if the markup-cost ratios were consistent with pricing policies.
• Employees were encouraged to call a fraud hotline if they had knowledge of fraudulent activity being perpetrated by any of the employees. Such tipsters, if their information proved accurate, were rewarded with a cash bonus.
• Surveillance cameras were installed directly over each cash register to ensure that the cashiers rang up sales correctly. Employees immediately tested the cameras with pranks and found that security personnel were indeed watching. (Northern Exposure spent $25,000 on surveillance equipment, which was recovered in less than one month through the prevention of skimming.) This strengthened the perception of detection and deterred two common ways bartenders steal: leaving the cash drawer open between sales, and hitting “No Sale” or “Void” on the register to open the cash drawer. In both cases, since no sale record is made on the cash register tape, the bartender can pocket the money from such sales. Ideally, the cash register tape should capture No Sales and Voids and bartenders should have to explain them at the end of their shift.
• To further enhance the perception of detection, employees were informed that the following would be conducted on a surprise basis during the month: 1) undercover surveillance, 2) inventory and cash-register audits, 3) review of disbursements and supporting documentation, and 4) employee fraud assessment interviews.

Companies will always be susceptible to fraud at the points where cash enters or leaves the business. But even cash-intensive businesses can take measures to ensure that fraud is minimized or eradicated. Despite a lack of direct evidence, off-book fraud schemes, such as the skimming that occurred at Northern Exposure, can be detected and thwarted through indirect investigation techniques and careful control over the cash flow a business generates.

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Mobile: 602-622-0875
Toll Free: 800-880-0811

Lobby Bar

1. Bartender 1:  Male, 5’8”, xxxxxxxxx, in his forties, with a medium build and short, brown hair.  He wore a tee shirt.

1. Bartender 2:  Female, 5’3”, xxxxxxx, in her twenties or early thirties, with a medium build and long, dark hair.  She wore xxxxxxx and a black hooded sweatshirt.

1. Bartender 3:  Male, 5’4”, xxxxxxxx, with an average build and a dark xxxxxxx. 

1. Bartender 4:  Male, 6’2”, xxxxxxxx, in his thirties, with an average build and long, wavy blond hair.  He wore a baggy hooded sweatshirt and a knit cap.

1. Bartender 5:  xxxxxxxx, 5’5”, xxxxxxxxx, in her twenties, with a medium build and short, dark hair.  She wore a black xxxxxxx.

Barback:  Male, 5’8”, xxxxxxxxxx with a slender build and dark, curly hair.  He wore jeans and a hooded sweatshirt.  He had a slight xxxxxx and xxxxxxxx.

Bartender 1 was friendly when the agent approached the bar.  He did not offer upsell options or ask for a liquor preference.  He filled the round promptly and asked if the agent wanted to start a tab when the agent presented a credit card. 

Bartender 1 accepted the card and appeared to begin the tab properly.

When the agent approached the bar again, Bartender 5 gave him a pleasant greeting.  She also did not offer upsell options or ask for a liquor preference.  She gave a verbal total for the round, then located the agent’s tab and recorded the items.

The bartenders demonstrated proper free-pour technique, delivering 1 ¼-ounce single-liquor drinks and shots.  Their pours were consistent.

The bartenders occasionally asked for identification when patrons presented credit cards.

The bartenders worked quickly and were generally pleasant but not friendly.  They initially were diligent about ensuring guests had wristbands before serving them.  However, their attention to upholding liquor laws was meager.  When two patrons attempted to order a total of six shots, Bartender 5 explained she could serve them two shots, but they would have to walk away from the bar and approach again for the next two.  However, after several exchanges with the patrons, Bartender 5 served them four shots.  The patrons then turned around and delivered two of the shots to female guests that accompanied them—the guests did not have wristbands and were clearly not of legal drinking age.  Bartender 5 was looking straight at the group during this time but did not acknowledge the transgression.  This occurred at 7:38pm.

TITLE 4, CHAPTER 3

4-241. Selling or giving liquor to underage person; illegally obtaining liquor by underage person; violation; classification

A. A licensee, an employee or any other person who questions or has reason to question whether or not a person ordering, purchasing, attempting to purchase or otherwise procuring or attempting to procure the serving or delivery of spirituous liquor is under the legal drinking age shall require the person to exhibit a written instrument of identification and may require the person on a card to be retained by the licensee to sign the person's name, the date, and the number of such identification. An off-sale retail licensee or employee of an off-sale retail licensee shall require an instrument of identification from any customer who appears to be under twenty-seven years of age and who is using a drive-through or other physical feature of the licensed premises that allows a customer to purchase spirituous liquor without leaving the customer's vehicle. The following written instruments are the only acceptable types of identification: 

TITLE 4, CHAPTER 3

4-244. Unlawful acts

23. For an on-sale retailer or employee to conduct drinking contests, to sell or deliver to a person an unlimited number of spirituous liquor beverages during any set period of time for a fixed price, to deliver more than thirty-two ounces of beer, one liter of wine or four ounces of distilled spirits in any spirituous liquor drink to one person at one time for that person's consumption or to advertise any practice prohibited by this paragraph.

The general practice of the bartenders was to ring in items immediately after they were served; there did not appear to be a protocol that only tab transactions were recorded on the computers.  However, Bartender 4 worked the left side of the bar, where a loose cash drawer was placed atop the back bar.  Bartender 4 rang in items on the screen many times, but he also frequently simply made change from the cash drawer without ever touching the computer screen. This was a red flag for the Agent to observe and an apparent integrity issue.  It quickly became clear that Bartender 4 had other integrity issues, as well:

• At 7:20pm, he served a draft beer and two Coors Light bottles and accepted cash without ringing in anything.

• At 7:25pm, he placed cash accepted for a draft beer directly into the tip bucket.

• At 7:48pm, Bartender 4 accepted cash for a round and did not ring it in.

• At 8:32pm, Bartender 4 accepted cash for a round and did not ring it in.  Shortly thereafter, he showed special interest in a female patron and prepared her drink with two full ounces of alcohol.

At 8:36pm, Bartender 4 did not ring in an order of draft beer.

Other bartenders were not without transgressions:

Bartenders 1 and 5 frequently left the drawer to the right cash register open through multiple transactions.

• At 7:55pm, Bartender 5 hit “No Sale” to open the register and extracted what appeared to be two tens and one five-dollar bill, all of which she placed in the tip bucket.

• At 9:04pm, Bartender 5 slipped cash that was sitting on top of the right register into the tip bucket.

Barback appeared behind the bar and collected tip buckets.  He took the buckets to the rear right corner of the bar and changed out tips.  The agent strongly discourages allowing this, as it functions as an easy method by which to extract laundered stolen funds. 

Barback drank from a cup with no lid while behind the bar.

When the agent requested his tab, Bartender 5 provided two credit card receipts, with no itemization.  She did not request identification for his card, as it instructs.

Bartender 5 thanked the agent before he departed.

The agent observed the remainder of the bars from afar.  He did not view any suspicious activities or evidence of theft.

Outside Bar

• Bartender X:  Female, 5’4”, Caucasian, in her twenties, with an average build and dark hair.

Bartender X appeared very friendly and chatted throughout the visit with guests.  She utilized proper pour technique and appeared to charge appropriately for all items.

Inside Bar, left of stage

• Bartender A:  Male, 5’11”, XXXXXx, in his twenties, with a slender build and with multiple tattoos.  He wore a tight maroon polo shirt.
• Bartender B:  Male, 5’7”, XXXXXXXX, in his twenties, with a muscular build.  He wore a neon green hat.

Bartenders A and B appeared friendly and to work well with one another.  Bartender B periodically left the bar and visited staff behind the lobby bar.  He appeared to help out in a barback capacity.

Bartender A requested identification from guests.  The agent could not determine whether said guests wore wristbands.

Side Bar

• Bartender Y:  Male, 5’10”, XXXXXXXXx, in his twenties, with a medium build, a bald head, and a short beard and mustache.  He wore a red scarf.

Bartender Y also appeared friendly.  He worked quickly and appeared personable and to have a good attitude.  He did not have a register in which to ring in items; cash from all transactions went into his cash drawer.

Bartender Y was occasionally seen in the lobby; the agent could not establish whether someone was watching his bar in his absence.

At 9:04pm, Bartender 5 slipped cash that was sitting on top of the right register into the tip bucket. 

Barback appeared behind the bar and collected tip buckets.  He took the buckets to the rear right corner of the bar and changed out tips.  The agent strongly discourages allowing this, as it functions as an easy method by which to extract laundered stolen funds.

Barback drank from a cup with no lid while behind the bar.

When the agent requested his tab, Bartender 5 provided two credit card receipts, with no itemization.  She did not request identification for his card, as it instructs.

Bartender 5 thanked the agent before he departed.

The agent observed the remainder of the bars from afar.  He did not view any suspicious activities or evidence of theft.

Outside Bar

Bartender X:  Female, 5’4”, Caucasian, in her twenties, with an average build and dark hair.

Bartender X appeared very friendly and chatted throughout the visit with guests.  She utilized proper pour technique and appeared to charge appropriately for all items.

Inside Bar, left of stage

• Bartender A:  Male, 5’11”, Caucasian, in his twenties, with a slender build and with multiple tattoos.  He wore a tight maroon polo shirt.
• Bartender B:  Male, 5’7”, Caucasian, in his twenties, with a muscular build.  He wore a neon green hat.

Bartenders A and B appeared friendly and to work well with one another.  Bartender B periodically left the bar and visited staff behind the lobby bar.  He appeared to help out in a barback capacity.

Bartender A requested identification from guests.  The agent could not determine whether said guests wore wristbands.

Side Bar

Bartender Y:  Male, 5’10”, Caucasian, in his twenties, with a medium build, a bald head, and a short beard and mustache.  He wore a red scarf.

Bartender Y also appeared friendly.  He worked quickly and appeared personable and to have a good attitude.  He did not have a register in which to ring in items; cash from all transactions went into his cash drawer.

Bartender Y was occasionally seen in the lobby; the agent could not establish whether someone was watching his bar in his absence.

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Mobile: 602-622-0875
Toll Free: 800-880-0811

1. Bartender 1:  Female, 5’5”, Caucasian, in her early twenties, with a medium build and dark hair worn in pigtails.  She wore black pants, a black tee shirt with an establishment advertisement on it, and no nametag.
2. Bartender 2:  Female, 5’4”, Caucasian, in her early twenties, with an average build and long, straight blond hair with bangs.  She also wore black pants and a black promotional tee shirt, as well as a nametag identifying her as Xxxxxx.

Bartender 1 approached the agent and his associate very soon after they approached the bar.  She immediately placed beverage napkins on the bar top and offered drinks. 

She did not suggest upsell options, but did mention the feature drink for the month.

Bartender 1 did not require identification.  Both the agent and his associate appear less than forty years of age, and the agent is frequently assumed less than thirty.

Bartender 1 filled and delivered the round promptly.  She did not ask for payment or to secure a tab, but did ring in the round promptly.

Several minutes later, Bartender 1 returned and offered menus.  She mentioned the nightly food special and informed the agent and his associate of a drink special that would be offered later in the night.

Bartender 1 returned in appropriate time to take the agent’s order.  She offered no upsell options, nor did she suggest any additional items.  She promptly rang in the order and provided a paper basket with napkins and silverware rolls.

Throughout the visit, prior to the allotted time of the drink special, Bartender 1 frequently advised patrons both seated at the bar as well as walking-up of the drink specials later in the night.

Xxxxxx delivered the appetizer in appropriate time.  Two minutes later, a food runner delivered the entrees.

Bartender 1 checked on the agent and his associate after several minutes.  She continued to check on them several times throughout the meal, and removed their service items when it was appropriate.  She offered carry-out boxes and did not suggest dessert.

Both bartenders offered additional rounds at the appropriate times; however, Bartender 1 showed the agent and his associate far more attention and pleasantness than did Xxxxxx.  When Xxxxxx did pass by and interact with the agent and his associate, she did so with a blank expression or a scowl.  She did not smile nor did she appear friendly.

Both bartenders typically utilized proper free-pour technique, delivering the requisite 1 ¼-ounce single-liquor shot.  Excessive pours appeared a result of a lack of attention, rather than intentional.

The bartenders showed no habit of immediately moving to the register to ring in rounds, particularly when the guest volume increased.  When business was slower, they moseyed to the register and lazily input rounds after they were served. 

It is during busier times, however, when the practice of immediately rings is particularly important, as a bartender can easily forget rounds when grouping.  Additionally, in the agent’s experience, bartenders with a penchant for theft always make sure to ring in rounds immediately when business is slow, because any omission would be conspicuous.  Thinking that heavier business masks their transgressions, instead, it shows the agent their true colors.

• At 7:53pm, Bartender 1 prepared a White Russian using Three Olives Root Beer vodka for a patron; she did not ring in the item.
• At 8:11pm, Bartender 1 served a round of beers to three male patrons sitting at the right end of the bar; said patrons appeared of questionable drinking age, and to be regular guests.  Bartender 1 did not ring in the round.
• At 9:20pm, Bartender 1 prepared a clear vodka drink for a male patron at the left end of the bar.  She delivered the drink with no straw and did not ring it in.

Bartender 1 occasionally scooped ice using glassware—a dangerous practice that is a liability issue for the establishment, as well as an AZ health code violation. .

Both bartenders drank from cups with lids when behind the bar.  They typically did so while standing at the far right side of the bar, halfway obscured by a partial wall.  They did not eat when behind the bar, or utilize cell phone or any personal items.

The bartenders allowed a server wearing the nametag Emily to prepare several drinks behind the bar.

When the agent and his associate requested their tab, Xxxxxx accepted their card with neither a word nor a smile.  She immediately processed the payment and neither required identification—as instructed by the agent’s card—nor provided an itemized receipt.  She also returned the tab without a word.

Bartender 1 called goodbye to the agent and his associate when they departed, wishing them a good night.

The agent and his associate found Bartender 1 pleasant, but Xxxxxx rude.  She was perfectly willing to lean on the bar top, chatting lazily with guests who were regulars, but she could not be bothered to offer so much as a smile to guests she did not know.

Michael Zenner - CEO  
         
Eye Spy Spotter Services Inc.
eyespyspotter.com
bartheft.com  (blog)
Hospitality Checkpoint PLLC
Lic. 1597616
hospitalitycheckpoint.com
liquorassessment.com
PO BOX 995 Gilbert AZ 85299
Office: 480-777-7056
Mobile: 602-622-0875
Toll Free: 800-880-0811