Are your prices so cheap that your goods are being cherry-picked by staffers with their discount who plan to resell them?
Kirsten Block, co-founder of Buffalo Exchange with her late husband Spencer, and co-owner with her daughter Rebecca, of more than 40 stores, shared her solution to this vexing problem with her audience at NARTS Conference 2011. The chain of buy-outright stores was finding that, when staffers had a percentage discount for all purchases, that they bought armloads,
not for personal use but for resale
since the chain keeps prices very low. Kirsten says
We now give employee vouchers, store money, to use as they like, but they pay full price on anything over their earned vouchers.
If your shop has a similar situation, try awarding vouchers and ditching the unlimited discounts. The amount of store money given could be based on hours worked, position, length of service, and could be awarded weekly, monthly, or whatever you choose. Vouchers are also a great reward for meeting store goals, getting praise from clients, even as “extra pay” for working on holidays.
And finally, something Kirsten didn’t mention, but I must:
Auntie Kate The Resale Expert 
We offer 20% employee discount on items that have been on the floor for a minimum of one week. If they really want the item immediately, then they have to pay full price. We do give employees a higher percentage for consigning their own items and at the holidays or birthdays, they have store bucks deposited into their personal accounts.
This is a fascinating topic and timely for me as well, since I have noticed that there can be a conflict of interest when an employee prices and item and then buys that same item a moment later. I can see how a percentage off after 5 days would help with both the pricing and the buying issue.
We only have one emplyee and she is a friend so making “rules” seems strange for us because they would only apply to her but we are getting ready to hire another part-time helper so it is a natural time to re0think things.
Thanks for the great discussion!
Jenni, that’s anOTHER fascinating topic: requiring merchandise to be on the sales floor for some length of time before an employee can use her/his discount. In fact, it’s so fascinating… I am going to add it to the blog today, Sept. 6… see ya over there!
You also raise another staff discussion: when, where, and how to start putting together an employee handbook. Let’s discuss that tomorrow, Sept 7.
Thanks for bringing these to the table, so to speak!
We don’t have employee discounts, but the owner of our store gives us
100% of the items we sell, clothing or jewelry. That’s a big plus when
someone can’t afford to pay high hourly wages!!!
Kirsten’s policy is certainly a great one. As a former employee of the company I was always so exceeded to receive my voucher. Oddly enough it felt better than a more traditionally structured discount even though I was limited by the still generous amount given.
Thanks Liz for adding your viewpoint as a member of the store team. I imagine a voucher feels more like a gift than a discount does. Just like, to a customer, a straight $-off coupon feels more gift-like than a %-off coupon that’s only valuable if you BUY!
I think this is a great alternative. I use a combination of both practices at the moment, we give a 25% off regular prices discount, but also award “Baja Bucks” for going above and beyond…each is worth $5.00 store dollars. The girls love it.
Just want you to know that I miss sharing, a lot!
Your Baja Bucks sound like a nice way to reward staffers… thanks for Sharing. But Kerstin’s voucher system solves several problems associated with giving employees an across-the-board discount, which is what I think is so BRILLIANT of her!