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

?
 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 a
spot-check of rum sales record for comparison with
rum inventory records for May 25th.
•Opening rum inventory on that date was 6.4 bottles
and closing inventory was 4.1 bottles. Five full bottles
of rum have been requisitioned for the storeroom on
that day.
•Bottle of rum contains 25 ounces.
Analysis of the sales checks revealed the following:
Drinks Quantity sold
Straight rum (1 oz) 144
Daiquiri (1 ½ oz) 8
Cuba libre (1 ¼ oz) 8
Rum Swizzle (1 1/8 oz) 8
As 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.-