The Barstool MBA: Everyone Will Steal From You

by Dan Maccarone and Bob Sullivan

Have you ever wondered how tips get shared in a busy bar when multiple servers help you? Well, with so much cash changing hands so quickly, it’s not exactly scientific. And sometimes, it gets messy — or downright ugly. Here’s an example of both:

“I worked in a bar once that didn’t have a ‘pooled house,’ and bartenders got tipped out by servers. I was serving downstairs with an inexperienced bartender on a quiet Sunday, but there was a party upstairs that eventually spilled over onto our floor,” tells a bartender friend of Dan’s. “The bartender was quickly overwhelmed, so I left my tables — and my tips — and jumped behind the bar to help her bust out cocktails. When the rush was over, I mentioned to her that she wasn’t going to tip me out because the bartenders never tipped out the servers. She said, ‘Well, I found this 28 dollars on the bar and I don’t know what it’s for, so why don’t you just take that. I said ‘thank you,’ and took it.”

This story — taking some cash from the bar that hasn’t been rung in — may sound innocent enough. But it doesn’t end there.

“At the end of my shift,” Dan’s server-turned-bartender friend said, “I was like, ‘hey did you ever figure out what that 28 dollars was for?’ She said she did, but that she didn’t ring it in, so I should keep it. But I handed it back to her.”

An honest gesture, it would seem. But not to everyone.

“Three days later, I was called into the office and my manager said ‘I just got back from vacation and was reviewing the video from the other day and I saw you take cash from off the bar. Now I can’t trust you.’ I said, ‘I knew you couldn’t trust me when I started working at a bar with cameras. And now you tell me that you’re looking at the footage and there’s footage of me giving it back.’ She’s like I know you paid it back, but you still took it.”

Of course, Dan’s friend didn’t stay at that bar much longer.

Cash. Theft. Trust. Dishonesty. Disloyalty. Disrespect. Fairness. Unpaid labor. So many big notions arise from small, everyday bar transactions. And, let’s face it — almost all workplace transactions. Woe to the bar owner — any manager — who is ignorant of all these dynamics. An owner who is simply obsessed with stopping theft at all costs can easily misread situations like these. After all, the server was the real crime victim above. And the paranoid owner actually himself an honest, hardworking employee.

But you don’t have to be that oaf of an owner. Just keep in mind the first piece of advice Dan’s partners offered when they opened their first bar, “Destination.”

“Everyone will steal from you.”

Dan, full of eager innocence, was baffled. How can you create an environment of trust when you take that approach? Wasn’t it easy to get caught? Pilfering dollars from every shift wouldn’t be hard to miss. But stealing doesn’t always involve swiping a few bucks here and there and the motivation to steal may have very little to do with how you treat the staff — more on the second part later.

EMPLOYEE HAPPINESS

One of Dan’s bar partners used to clean house every six months. His idea was to make workers live in fear of their jobs at all times; he believed this “helped” them somehow discover motivation and create new reasons for customers to buy drinks. In reality, however, this just inspired bitterness and encouraged them to “stick it to the man.” While a great boss or leader doesn’t necessarily have to equate friendship, it should spark respect, a feeling that perhaps has commonalities with fear but it’s certainly not the real thing.

When an industry as a whole accepts that everyone will steal from you — it’s just the amount and how they do it that’s a variable — perhaps it’s worth re-examining how things are done. That may be another topic for another time. What we can do, however, is take some notes from where the bar industry goes wrong and ensure we don’t do the same thing in other companies. You may be thinking to yourself, “if the bar industry already gets it wrong, aren’t we already well ahead of them?”

Sadly, the answer is no.

Plenty of managers, bosses, founders, clients, CEOs, etc embrace pretty much the same tactics as bar owners. It just happens to be in an environment that’s much more “professional.”

WHAT IS STEALING?

Seems like an easy question, doesn’t it? Simply put, it’s taking something that doesn’t belong to you. But in bars it’s not quite that simple. Of course there are the times where some bartenders will swipe the cash a customer gives them, pocket it and never ring it in. That’s pretty obvious stealing. Then there are the occasions when your cash register balances out with more cash in it than you rang in — that could be an extra $20 in your pocket and no one will ever know. Then it gets complicated.

Perhaps you’ve ordered a whiskey or a wine and that glass seemed a little too full. Maybe you tipped the bartender a bit more because of that. In that case, technically, that overpour is the bartender giving you a little something extra and taking it out of the bar’s pocket.

The “buy-back” is a common tactic in bartending. Bar workers believe that no one leaves after getting a free drink, so customers stay and pay for one more and unless the customer is a total chode, he or she will tip on the free drink.

If giving the bar away means more tips, bartenders who could care less about the health of the business and only about lining their own pockets are more likely to give the bar away in exchange for higher tips than a higher ring at the end of the night. This is a great short-term plan but doesn’t help them keep a job if the bar closes or their boss finds out they are handing out all the liquor for free.

Ever done a shot with the bartender? Seems like a friendly gesture for sure, but if you’re not charged for either shot (and it’s a 50/50 chance on whether you will be), the bartender didn’t actually buy that for you. The bar did. And there was most likely a tip in there somewhere.

There’s a fine line here because the previous three examples are sometimes totally kosher depending on the bar’s policies. Some bars allow their staff to do shots with customers as part of the buy-back policy (Dan and his crew at Destination definitely did). An overpour to a regular is common or using that tactic instead of a buy-back is absolutely legit — you could even say acceptable. But it’s easy to imagine a bartender crossing the line — say, 20 friends come in on a Saturday night and no one pays for anything, but that bartender pockets an extra hundred bucks in “tips.”

STEALING IN THE REAL WORLD

You may ask where the parallel between the bar and corporate world exist. Certainly, teams aren’t giving away the house on a regular basis, right? And you’re not worried about an account manager pocketing part of a project budget. That would be ridiculous.

But there are other ways unhappy team members can — maybe unassumingly — stick it to you. The obvious ones are trite: swiping office supplies, taking advantage of free food or drinks (as an unhappy employee in his early twenties, Dan once stocked his entire fridge with free soda from the office), spending most of the day gobbling up Facebook, Twitter or even Medium(!) posts instead of actually getting work done. Wasting time online may be the most common of all these days, sparking many companies to block access to social media on any company devices. Not that that really makes a difference, as people can access those same sites on their phones, tablets and even watches now.

Then there are grey areas. Many companies look at any work created on their hardware as property of the company. So, if an employee stays late to work on a side project, their employer can lay claim to it should they want to. The argument is simple: the company provided the resources therefore it deserves some of the reward.

This actually happened to Dan at an agency about a decade ago. He and his comedy group created a game that went viral. His boss immediately suggested they sell the same concept to a client (without compensating Dan or his friends), claiming because they’d programmed the game on the company’s computer, the company owned it.

Some of this “theft” is acceptable, naturally. A few minutes here and there on Facebook, grabbing a few pens or a notebook for use outside the office — these things aren’t going to sink the company and can help morale.

What follows is the bigger question about stealing: the anger at being told the company owned this piece of work he and his friends had spent a lot of personal time on immediately seeped into Dan’s day to day feelings on the job (he had suggested a similar idea months before and his boss had rejected it out of hand). Instead of congratulating him on his success, his boss attempted to take advantage of it. That instantly created an unfriendly work environment where Dan was in fear of his job if he didn’t turn over the files to the game. Even worse, it inspired Dan and a co-worker to copy every file they could onto their own hard drives to make sure they had access to whatever they needed if they found themselves out of jobs.

This is where the “everyone will steal from you” scenario becomes scary.

People sign NDAs all the time, but they can’t unlearn things they’ve learned. You can try to block them, stifle them, etc, but when it comes down to it, as an employer, you’ve (hopefully) taught your team members a lot.

They’re not stealing knowledge, but in a world where The Cloud is a real thing, just as someone could steal a secret recipe from a kitchen, they can steal your whatever documentation, research, contracts, on and on right from under you.

We don’t say this to be paranoid. In fact, just the opposite. Trusting your employees, treating them with respect, encouraging independent work and thought are what inspire loyalty, hard work, respect and a long-term relationship — both in your current situation and down the line. Creating unnecessary reasons for someone to want to steal, or at the very least turning their days in a bored purgatory, does no-one any good.

STOP THE BLEEDING

Stealing — or should we say “stealing” — very simply finds its roots in team satisfaction.

Keeping employees happy is not a hard thing. Most of the time the unhappiness comes from a lack of respect: respect of that person’s time, knowledge, experience, or just them as a person.

Many bar — and let’s face it business — owners come at leadership from a place of ego instead of humility or collaboration. The hard truth is that as a business owner, you are only as good as your team.

Bartenders are no exception: whether they’re experts in cocktails, beer or musical theatre, you can leverage their talents to have a positive impact on the business (that doesn’t necessarily mean you need an amature rendition of Hamilton performed behind the bar, but perhaps the energy, rhythm and character of a good actor can help customers stay excited).

From the bar world, here’s one of Dan’s favorite examples of an employee preventing stealing. One afternoon, a porter at Destination named Oscar was cleaning the basement when a random guy off the street snuck into the basement, ducked into the liquor room and snatched a couple bottles of Jack Daniels. As he fled, Oscar (the porter) chased him down several blocks on Avenue A, tackled him, reclaimed the bottles and waited for the police to arrive. All for $80 worth of whiskey. You cannot ask for a more dedicated team member than that.

In the world of business, keeping your employees happy should come from the same place. We’ve seen agencies that were sweatshops, keeping people for 14–18 hours a day, pulling all-nighters and paid pennies without the opportunity to find a way out. Not shockingly, motivation wanes after a few short months and the turnover rate at those places is insane.

At Destination, Dan and his partners employed the tactics he used at his agency when managing staff. It was a place of respect, of open conversation, of shared ideas. Where free drinks were encouraged but where ringing higher than expected was rewarded with bonuses. At both Hard Candy Shell and Charming Robot, a bonus structure for every employee exists — why not give over-performing bartenders and waitstaff the same incentive? It’s a low-cost, simple solution that benefits everyone.

And don’t forget, making employees work extra without paying them is “stealing,” too — and may even be stealing, without the quotes, depending on applicable labor laws. Set expectations for a standard workday (we all have to work late sometimes), encourage people to take vacation, listen to their ideas thoughtfully and honestly, give constructive feedback, compliment people’s good work.

Go to bat for your team. Customers in every business are not always right. That adage that they are is a fallacy.

When a customer is wrong or abusive to your team in anyway, come to your team’s defense and don’t be afraid to ask that customer to leave — literally if it’s a bar and metaphorically if it’s another business. There’s nothing fun about firing or 86’ing clients/customers, but when that relationship becomes a plague on everyone, you have to weigh the revenue they produce against the overall health of the company. There’s no excuse ever for a client/customer to mistreat a member of your team. For the most part, the client is fairly embarrassed for being called out and is overly apologetic. Treating people with respect comes from all sides.

Which comes back to Dan’s friend at the beginning of this post.

“If you have an open relationship with your manager, you’re not going to worry about reporting your buy-backs,” she says. “If I owned a bar, I would just give my bartenders a hundred dollars a day in buy-backs — remember that’s not what it’s actually costing the bar. My bartenders would be responsible with that money because it can go a long way and they aren’t going to give away three $32 shots.”

That’s still “stealing,” but notice the difference — the bar is “in on it.” It’s human nature to want to get away with things here or there — just like it’s human nature to revel in getting something for free every now and then. That will never change. Everyone “steals.” Smart owners just learn how to work with this force of nature, not against it. When it works right, it something worth celebrating with a free drink.

More Barstool MBA:
The Brand as Experience >
The Well-Timed Free Gift >
The Loneliness Business >

ABOUT THE AUTHORS
Dan Maccarone is the co-founder of Charming Robot, a digital product design agency in NYC. He also hosts the podcast Story in a Bottle, chronicling the stories of tech and media professionals. Follow him on Twitter @danmaccarone.

Bob Sullivan is a New York Times bestselling author and a Peabody award winning journalist. His work can be found at BobSullivan.net and you can follow him on Twitter @RedTapeChron.