Comp Tabs

[ENVY]

I own a small bar/nightclub and was wondering how other bars and nightclubs handle comp tabs???? Do you give away free beer and liquor? I have 2 partners and they seem to think 5% of sales is an industry standard for comps. I on the other hand dont see that I need to be required to give so much inventory away for free. When you are doing over a $1,000,000.00 in sales a year im looking at over $50,000.00 in free tabs going out the door. hope to see some responses to see if other places give the bar away like mine seems to be doing.

[David]

5% is high. I wouldn't allow any comps. By allowing them without a way to monitor them, they can get out of hand. Make sure that you have a way of tracking the comps via your point of sale system.

Even though you say that you are allowing 5%, that fact is, your employees are probably giving away their fair share too.

[ENVY]

Thanks Dave, They are supposed to be tracked on POS but like you said Im sure there are just as many the bartenders and other owners dont track.

[scott1988]

5% is high. I wouldn't allow any comps. By allowing them without a way to monitor them, they can get out of hand. Make sure that you have a way of tracking the comps via your point of sale system.

Even though you say that you are allowing 5%, that fact is, your employees are probably giving away their fair share too.

...........WITHOUT keeping track of it as well. So that 5% is really like 10% or maybe even as bad as 12 to 15%. Yikes.

Inventory control is key. I think it's ok to give away a little here and there as long as it's NOT TOO MUCH and...it IS TRACKED. If you can't or don't track it, then you have no way of knowing what is going where and why.

[Daryl]

As this discussion gets legs, along these same lines I would like to hear how individuals, managers and owners handle comps in general.

In other words, when do you comp in your place? Is it a reward system, is it a "make a situation better" comp?

Is it cause you like the customer? What are the boundaries others use to comp a drink?

[owneroper]

I ask bartenders when I interview them "do you ever give drinks away" as of right now 100% say never. I figure if you never give a drink away your a bad bartender. There are many reasons to give a drink away and yoour friends are not one of them. Yes to make a situation better, a good customer, birthday, etc, but you must write it down. We count beer and weigh liquor for inventory so we need count of mistakes as well.

I pay cash for all drinks I "give away" and I tip my bartender. I want the help to know even I dont get free drinks

[Michael Black]

Don't "give away" any. Everyone pays, lead by example even if it is your mother, give the bartender $1 per drink.

Everyone including owners and managers pay $1 and no heavy pours or a dollar for each standard pour.

Account for them separately and consider it part of your marketing budget.

If possible, account for the types: spills/breakage, employees, bartenders to regulars or guests that already spent x dollars, management good will, etc..

If possible, try to keep a separate inventory for this from your regular stock to account better and not to throw off your cost of true sales.

Put The dollars in a separate till by this stock and only go to this inventory for that purpose.

Use the dollars, money for additional purchases. If controlled correctly, you should have a little profit over the costs of those "giveaways".

This makes theft less likely and theft theft where someone who did not get the message gives anything away w/o getting at least a dollar per drink and this includes an extra shot or over pour. This way you are at least making something and controlling your losses. One dollar is more than reasonable and not much but should at least cover your costs. Still don't give away too much because it does take away from full price sales and this is a real loss beyond your costs. At the same time, the goodwill marketing will return to you for future sales and repeat business- it's a fine line.

Also, you must drill how much it adds up to to everyone and that you first must protect the business, investments, and everyone's jobs.You may want to let them know if you don't do this there may be nothing left for any bonuses or incentives:)

Good luck,

Mike

[ManageYourBar]

I agree with Michael. Staff need to see that even the owners/partners "pay" for drinks given away. I have worked with owners who insist on paying cash each time they order a drink in their own business. It looks good and shows they care about inventory control. Good practices start at the top.

In terms of allowing staff the ability to give drinks away, my recommendation is to empower staff to a certain dollar value. Say $10/$20 worth of retail food/beverage that they can use to remedy a problem.This allows them to take ownership and not have to involve management at all times. Saying that, they should record any giveaways and the reason for the giveaway. I have seen this work well in the past. Just make sure that the giveaways are under your daily acceptable limit overall.

5% is way too high in my opinion and open to serious abuse when not controlled.

There should be one big rule: No drink crosses the bar counter without being recorded.

At the end of the week or month when you do your inventory you will want to have accounted for all these drinks through the POS so that you are confident that any losses/shortages on your inventory losses are genuine unexplained shortages (ie theft....) which you can confidently take action on.

Hope this helps!

[Ruben]

Free liquor is a no! Your bartenders are probably giving out a shit load of free alcohol for spills and over pours. Rethink it properly 50k a year is maybe 2 months lease!

[Estefon]

In my opinion, Bartenders will give away drinks. But if you hold them accountable for the amount that they can give away, they usually will respect house policy. I allow each of my bartenders $20 per shift to comp to whoever they would like. Whether it's a birthday shot, a new customer or their roomate. They must ring it in the POS under a comp tab just like they would for any customer.

I haven't had any problem with it in four years. My PC stays in line and my inventory is accounted for.

[king]

I agree, keep comps to a minimum. Yes there are certain situations where comps are acceptable but follow the general rule of thumb and you will be able to monitor it.

EVERYTHING that goes across the bar MUST be accounted for! No matter what.

[SouthernBelle]

I'm rethinking this too. Currently, my bartenders are allowed to give away three drinks per shift (two shifts per day). I encourage them to use their comps wisely and reward customers who tip well and are repeat customers OR reward a new customer for coming in. I also give them an employee discount on their own drinks. This costs me roughly $400 per week all told.

Now I'm thinking of giving them $50 bar tab each week (four bartenders total) and NO comps and NO discount. They can use the bar tab as they see fit, to reward others, buy drinks for their friends or drink it all themselves. Every drink that goes across the bar gets accounted for at full price. This will cost me $200 a week and my inventory is easier to track without the added variable of discounted drinks.

[Michael Zenner]

Greetings

I probably should check into this forum more often as there are always interesting topics. Anyhow, I don't care what anyone says, if you don't allow your staff to comp drinks...they're going to give them away. Simple and to the point. If you walked into sears and bought a Dewalt nail gun and your friend is the cashier - is it OK to "hook up" with an orbital sander too!?!? I really HATE this friggin' freebie thing about our hospitality industry but hey, detecting this theft put me in a BMW.

Bottom line is it will happen. If you tell a teenager that they can NEVER EVER go outside...well, you're destined for a pregnant teen. Just like kids, bartenders need to be instructed. If you have no rules or policy you have anarchy. Your rules are too harsh you'll have rebellion; firing; much turnover. If you have clear set rules that need to be followed and you follow through with them, then "issues" will be minimal.

I had personal experience on both ends from owning a nightclub for years. I got robbed blind for years until I came up with solutions that worked perfectly for me. These solutions might not work for everyone in every situation but it did for me. If it doesn't work for you then e-mail me and I'll definitely come up with a solution for you...yes I'm confident I can. I've seen it all and I don't mind helping others.

Here is an excerpt from one of our spotter reports about comping:


The following statements are recommended only after management is in full control of the integrity and staff issues. Once this is comfortably established, as a reward for the staff and to show that you have “trust” in them, Eye Spy would recommend giving them a free reign “comp” tab. Instruct them that they have free reign to comp any drink they feel necessary for the promotion of good will to their guests.

This is not a tool for them to attempt and increase the percentage of their gratuity but to promote the establishment itself and also should not have a set pattern of “We always buy John and Mary there first drinks;” that is dangerous and counter productive and soon becomes expected by the guest.

It should always be said when bartender is delivering the drink, “This one’s compliments of the OWNER or MANAGER.” Then there is no confusion as to who should get credit for the free drink(s) as well as, freeing ADLLC liability issues. Notice needs to be posted by management allowing them to do so.
Bartenders shouldn’t be using “liquor to get laid” or “stacking their tip jar” but ‘comped’ drinks should be given as a reward for good patronage, to up-sell the establishment, or to promote other nights; come see me on Wednesday, I’ll have ‘Steve’ buy you a round of shots.

In addition, instruct the staff to skew away from giving away free drinks and beers. Patrons just want to feel special by getting a “comp” drink from the owner no matter what it is. It’s been the Eye Spy experience that a shot will serve the same purpose as a freebie drink. “John and Mary, here’s a kamikaze shot that’s on Sean.” They’re happy for the free drink, which liquor costs about 25 cents in house vodka, drink the shot then order a $5.00 drink and gladly pay for it. The bartender didn’t give them a drink that will take away from sales and the good will shot costs less than a quarter.

Anyhow, the key to this whole ‘comp’ system is accountability. Without accountability the whole system will break down and will result in what the one agent termed a “liquor playground.” EVERY DRINK NEEDS TO BE ACCOUNTED FOR. The comp drink needs to be rung in register and written down exactly what it was EACH AND EVERY TIME. If they don’t ring it in, it should be considered theft and they should be held accountable. This can be verified and kept in check via Eye Spy spotter reports.

Management then is aware of exactly what is being ‘comped’ and it is accounted for; management can also track exactly which bartender is ‘comping’ what drinks and if they become ridiculously high can be talking to if there comps are to high.

Management will soon see that ‘comping’ drinks can be a very good thing as opposed to an uncontrolled liquor monster. These happy guests will return and multiply and synergistically a bar staff is happier because they don’t feel as though they are stealing or doing anything wrong. The system basically takes a lemon that every bar or club has present in bar theft, and makes the proverbial lemonade.

Michael Zenner
CEO - EYE SPY SPOTTER SERVICE

http://www.eyespyspotter.com/

[seandell]

We used to run into problems by letting an employee comp drinks to new customers at the tune of up to 3 drinks a day. Well we soon learned that she felt she had to use them up every day! She was also caught taking $$ and putting it in her tip jar and writing it down as a comp. We stopped letting them do so.

I Feel An employee making 20-30 $$'s an hour should buy the drinks for the good customer themselves.

I personally used to walk around and give out drink tickets to certain guests. A great way to introduce yourself. I would also get customers names and #'s and put them in my phone so I could text them later this way.

Lastly when I do birthday comps, I always use a shot of a discontinued liquor or a cheap mixed shooter like a kazi.

[Havensloft]

We comp drinks for frequent guests, new guests for goodwill. I like the idea of paying a $1 for the drinks. I have a paper on a clipboard for the comp and spills but I think I will add a department on the register for those as well so I can keep track of it better. Right now we are comping the first drink to promote Sundays.

[Estefon]

I don't want to beat the dead horse, but I really want to underline the point of my first post.

Ducks Quack, Cows Moo and Bartenders Give Away Drinks. That is the bold and simple truth of it all.

You can have all of the control mechanisms and anti-theft systems in place that you want, but you cannot prevent a bartender from giving away a drink or pouring heavy for a heavy tipper.

In my experience, I have found that the best option to control this problem is to allow the bartender to comp a certain number of drinks per shift. It empowers him/her to act in the best interest of the house. Give them a boundry and ask them to account for it by ringing it in.

I also recommend ringing in all comps through the POS or register. They can easily be subtracted at the end of the night or next day when you do the books. Use something similar to the Daily Sales Journal (http://www.nightclub-business.com/forum/showthread.php?t=6285) posted here.

I have strong opinions on this subject and much more to say, but feel like it would be prudent to get off the soapbox for now.

Regards,

Steve

[HBSean]

I've been in the reducing theft business for the last five years, specializing on just draft beer. What I have learned in performing 30+ pilot studies is eliminating theft behind the bar is like changing a culture. We all went to places when we were 19-21 years old where we were "taken care of". Yeah, we were taken care of and the owners (shareholders) expense. With the state of this economy and corporate restaurant chains suffering, changing this culture is becoming a priority. Beverage control companies are popping up everywhere. What they are realizing is change is difficult but in most cases possible.

As for comping, most of this string agrees that bartenders are going to give away drinks regardless of the policy. The only thing owners (not managers) can do is try to keep in under control by having strict inventory procedures in place and sticking to them.

I also like the idea of a buck for those who deserve one on the house. It has to be monitored or 80% of the customers become "deserving". Like I said, my company only deals with draft beer. Customers are stunned when we inventory their beer without employees knowing and seeing numbers between 25% and 35% shrinkage. Every bartender thinks "there's no way they can tell if I give my buddies a couple draft beers". Those days are over. The bartenders see an unfamiliar face three times a week walking to the beer cooler and they straighten up.

There are great books on how to implement a solid inventory procedure. You have to make it a priority just like counting the money at the end of a shift.

Sean