Shop Talk: Practical answers for tough business questions
Question: How do you handle employee discounts? I only have two part-time employees, but one thinks she should be able to order anything at cost. Is this the norm for retail stores?
Answer: Employee discounts are an attractive “perk” employers can offer, but it is totally up to you and not required, by any means. The percentages retailers offer their employees vary widely, so you have to decide what works and feels right to you. Many stores offer a 20% discount, or even up to 40%. Some require the employee to complete their trial period before they are eligible; others allow discounts to begin on the date of hire.
You also can customize your employee discount plan. At our store, for instance, employees receive 20% off all gifts that have been on the sales floor at least two weeks (so customers have the chance to buy at full price before new items disappear!) and 40% off on books. This is because we want to encourage our employees to read. At Christmas, we often let employees pick two or three vendors they love, and we allow them to place orders from those vendors at cost.
So, there is no hard and fast rule. You get to create the policy any way you want. You might start by explaining that this is a benefit, not an entitlement, as your employee seems to believe. He or she may be assuming what is considered “normal” in the retail industry from limited past experience.
First published in Vol. 25 No. 2 of Retailing Insight. © 2011 Continuity Publishing Inc. All rights reserved.