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Tuesday, 29 November 2016 21:39

Should Companies Hand Out Christmas Presents To Clients?

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Now for Christmas presents for suppliers. Where’s last year’s list?

Actually these Christmas gifts, although classed as company-to-company, are usually company to individual, and that individual probably is someone who places orders or contracts. But how lawful, ethical and effective are the gifts?

Looking at the last of those three questions: if they are not effective and achieve nothing, what is the point of them? Are they really just a token of thanks or more likely a “please” for more business? If they are signalling “please” rather than “thank you”, then they are obviously a bribe and as such are likely to be judged a breach of the Bribery Act 2012.

Bribes are not only unlawful but also unethical. Really the only way that a gift between companies can be neither unlawful nor unethical is, if it is “given by a company to a supplier as a token of appreciation for services rendered.” You are unlikely to ask a supplier for more business.

A further unfairness can show in the receipt of a present. Bungo Components supplies United Widgets with components. Orders are placed by the buyer of United Widgets, Mr Byers; the products are assembled by Mr Maykhem; they are sold by Miss Sayle; the goods are invoiced and the money received by Mr Cash; and the chief executive is Mrs Boss. Who then should get the bottle of whisky? It usually goes to the buyer, but is that fair? And what if Mr Byers is head of the purchasing department but told a member of his staff, Miss Clarke, to source the cheapest supply of components while he dealt with strategic matters – who then gets the whisky?

These questions put the issue of company-to-company Christmas gifts under the spotlight. A present from a supplier to a body on which it relies for business is bound to be viewed by a bystander as a bribe unless it is a means of advertising such as a displayed calendar. So giving such presents could bring the donor into legal difficulties. The recipient therefore would be well advised to say that presents are unacceptable and must be returned.

Nevertheless, a fair way to deal with Christmas presents would be, to give them to charity or put them on display to all employees, place a piece of paper alongside each, and have employees write bids on the paper, the highest bidder taking the present and the proceeds going to charity. This would be a useful way of raising money for charity, be seen by everyone to be fair, and would remove the taint of bribery.

Confused? Well, that’s Christmas shopping for you! If you want to make life simple and safe, forget about inter-company presents and just send a letter of thanks to your customers and suppliers or tell them this year you are donating to a charity. They probably would put it on a notice board, many of their employees would see it and appreciate it, and it thus would do far more good than a present.

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