Yesterday, we talked about how to structure that most common of employee benefits in the consignment and resale industry, employee discounts.
One commenter brought up another aspect of this issue:
I have noticed that there can be a conflict of interest when an employee prices an 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.
Yes, indeed. Even the most well-intended staffer has a hard time seeing an incoming item with dispassionate eyes… if she’s passionate about it! Heck, even a sole prop, like myself, must be aware that if she is probably going to buy that item, she’d better put a price on it that’s at the high end, for the sake of the business’ reputation.
One solution to the problem of really wanting that dresser or dress and pricing it fairly is to ask another staffer or even the boss to price it.
But that has interpersonal ramifications…
Dana likes it, asks Lee to price it… but Lee has loyalties to Dana and wants to see Dana get a good deal, so Lee can’t be totally subjective, either. And it’s a burden on Lee: what if the price he sets is more than Dana wants to pay… and Dana “gets him back” when the tables are turned? A true tit-for-tat exchange is being cultivated.
One of the easiest and fairest and least prone to misunderstandings solutions is
time-lapse discounts.
Simply, an item must be on the sales floor, available for purchase by anyone, for a certain time before the staffer can utilize her/his discount.
Not a fool-proof method to be sure that pricing and desire are separately at arm’s length… but a good technique for educating staffers on how important this issue is.
What think you? How has your business structured discounts around this issue?
Tomorrow, we’ll talk about how, and more importantly, WHEN, to structure your written policies and procedures for staffers, casual help, and volunteers.
Photo used with CC license from http://www.flickr.com/photos/gpwarlow/
Auntie Kate The Resale Expert 
What do you offer your employees for a discount. I will be a family clothing store.
Hi Tasha,
Many shops range in the 20% area…. but there’s a LOT more to consider than the %age. For example: term of service, purchases covered, and more. There’s also profitable ways to offer a perk without cutting into your profit.
See these ideas, as well as the “8 Guidelines for Employee Discounts” and a nifty way to make discounts MORE of an employee benefit in Team Work: Staffing your Store at http://tgtbt.com/shop.htm#19
eliminate employee discount altogether-problem solved. i certainlty don’t see this as unfair. i’ve never encountered any problems or complaints…why is this such a “must?”
How would you do this without affecting employee morale? Especially in a situation where the business has established employees that have been enjoying their discount for years? I would appreciate suggestions. Thanks!
We have time-lapse… and Have not had a problem at all
Well, of course the very first sentence in any employee guidebook should be
YOU MUST BE HONEST, UPRIGHT, AND MORAL IN ALL YOUR DEALINGS.
Second sentence?
You are hired to work to better this business. if you ever sacrifice anything that would do so for your personal benefit you will be fired.
And “reiterating” is good… putting it down in writing is better, and having all staffers sign that they have read and understood it, even better-better
I’ve had issues with this with my first real employee… we have a time lapse employee discount, items must be out for a week before the discount can be applied… unfortunately I’ve noticed a few items she stashed under the counter when she priced them and then would ring herself out the following week when she was working, using her employee discount. I’m training a new employee now and the former employee may not be working much longer, so I’ll be reiterating the PROPER procedure for this…