Shrinkage relates to the minor losses through petty theft in a foodservice operation plus wastage and breakage.


Thanks to Seinfeld and this episode, the term “shrinkage” has a different connotation for many people.

The little things add up

This doesn’t mean that the total cost is minor as the losses can quickly grow. A restaurant is comprised of so many small items that are attractive and enticing to eat, drink, and abscond. Temptation is strong. Getting nickeled & dimed is a constant issue for restaurant management, and wastage is prevalent with the volatility of the products, such as fresh produce.

Good smallwares are not cheap as they are foodservice durability and quality. I was aware of an apartment of restaurant staff that was stocked with cutlery, plates, etc. from the various restaurants where they had worked. It seems to be a cost of doing business and is no different than a setting where office supplies end up at someone’s home.

Getting control of the situation

“If the door is open, it isn’t theft”

“Cedarwood Road” by U2

Controls are required to minimize the losses because fully eliminating these costs is virtually impossible. But keeping it to a minimum is important. A loosely run operation is only asking for problems.

Strong controls and systems are necessary which will allow staff to work more efficiently and allow management to concentrate on the quality of food, drink, and service. No matter what management implements, a couple of staff in cahoots can bypass the control systems, especially if they work in different areas of the restaurant.

It’s not contained with just staff

The most difficult situation is with patrons. Confronting a customer if a glass or cutlery is suspected to be missing from the table is a contentious issue as well. Is it really worth it?

Note that I’m not including the “dine & dash” issues when customers walk out without paying. A busy restaurant is a prime target.

A hard-to-believe story

One incident that I must share was a hard-to-imagine scenario. I received a visit from a police officer at the restaurant late one night, and he asked if we sold small ornate silver trays of which he had one in his possession. I recognized the tray and told him that we presented our bills to customers on these trays, but we never sold them.

The cop had stopped and questioned a person that was walking down the street flashing one of these trays. There was another reason for stopping him, but I can’t recall why.

The person said that he had paid for the tray while at my restaurant earlier that evening. In reality, he had put the tray in his jacket after paying the bill. When the server asked where the tray was, the customer said, “How much for the tray?” The server accepted five or ten dollars in cash, told no one, and kept the money. After the cop left, I confronted her, and she confessed. I fired her on the spot.

It was one of the many difficult staff decisions I made in my career as she was a reliable and efficient employee. She did work at other restaurants after this incident and was pursuing a career in foodservice management and even enrolled in related courses. A few months later I did give her a good recommendation for a management position in a restaurant. Why, you may ask? She made a one-time bad judgement call with the tray incident, and I wasn’t going to let that affect her career aspirations. Months later, I heard through the grapevine that she was doing well in foodservice management.


I remember challenging a dishwasher who was throwing hard-to-clean plates in the garbage rather than cleaning them! Relating back to my short-term job as a pot washer, I wasn’t sympathetic. Obviously, he didn’t last long as an employee. Shrinkage comes in so many ways.

Policies unique to a restaurant

My restaurant policies provided staff benefits that recognized the dynamic and high pressure of upscale dining. Serving staff could purchase meals for half-price. Kitchen staff could eat for free and were mindful to not eat a steak every time.

And busy weekend nights would allow all staff to embrace a free “round of drinks” at the end of the night. Kitchen staff that didn’t imbibe would order virgin Pina Coladas. The bar staff always made these drinks as fancy as possible. Staff respect for each other is important. Did these policies and perks discourage and reduce shrinkage? I will never know.