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When Buying Incentives Lead to Problems for Hospitality Owners
11/27/2014
By Peter Nelson
In the hospitality industry it’s fairly common for suppliers to offer incentives to their customers, these are generally offered to the person who is making purchasing decisions on their products.
At the low end of the gift spectrum are things like a free bottle of product, a tee shirt etc. However, there are also situations where chefs and managers receive items of much higher value like coffee makers or other high-end merchandise and even cash in return for their continued patronage.
As a result of these “gifts”, the venue owner ends up paying higher prices on the supplier’s products.
Every venue owner should have a straightforward and well-communicated policy regarding what’s appropriate and not appropriate for employees to receive from suppliers in the form of gifts.
You may think that a free tee shirt or jacket is no big deal but here’s the policy of one major chain who discovered just how much it was costing them: No employee cannot accept anything from a supplier, not even a free cup of coffee. If they do, and the company finds out, it’s grounds for immediate termination. They don’t want anything to get in the way of employees doing what’s in the best interest of the company.
It’s also good to rotate people out of the purchasing function occasionally. Don’t have the same people control your purchasing decisions year after year. The longer they deal with the same suppliers, the warmer and cozier the relationships (and potential for abuse) can become.
If you suspect someone on your staff is receiving kickbacks, check to see the supplier’s prices and how they compare. Have someone outside of purchasing, like your office administrator do some competitive bidding on a few of your key products with those suppliers. If you’re paying premium prices, it should be fairly evident.