When Gifts Become Kickbacks & Lead to Problems for Restaurant Owners

In the restaurant industry it’s fairly common for suppliers to give away “gifts” to their customers, often individuals who make purchasing decisions on their products.

At the low end of the gift spectrum are things like concert and sports tickets or a ham or turkey around the holidays. However, there are also situations where chefs and managers receive items of much higher value like exotic vacations, high-end merchandise and even cash in return for their continued patronage .

As a result of these “gifts”, the restaurant owner ends up paying higher prices on the supplier’s products.

Every restaurant 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 few free hockey tickets are no big deal but here’s Wal-Mart’s policy: Wal-Mart employees 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 if any suspected supplier’s prices are excessive. Have someone outside of purchasing, like a bookkeeper, 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.
(Source: Restaurantowner.com; October 2011)