Do You Need a Corporate Gift-Giving Policy?
Regulating the giving of gifts within and related to your small business may seem like a move worthy of Scrooge, but adding a touch of Ebenezer to your processes could be worth more than a "Bah, humbug." Corporate gift giving can easily cross commercial and social lines, potentially landing your business or employees in uncomfortable situations or legal trouble.
Consider these two scenarios:
Scenario 1: Gift Giving to the Extreme
Lavish gifts can be seen as bribery, even if no illegal activity is involved. Banning the option to give opulent gifts, cash rewards and vendor-sponsored vacations helps protect your company's image. It's not only outsiders who suspect bribery at the sight of lavish gifts; according to a survey conducted by UHY Advisors, almost a third of respondents said a gift might influence their decisions. A corporate gift-giving policy takes this concern off the table for your employees.
Scenario 2: Elaborate Gifts from Vendors or Customers
Setting a policy about what employees can accept from vendors or customers helps keep relationships professional. Employees won't feel like they're being put on the spot or beholden to others after receiving extravagant gifts, and they won't feel bad about declining such gifts if they can blame it on a corporate policy. Appreciative vendors or customers may still offer you or your employees token gifts, but make sure they comply with regulations for your industry. You may want to set a dollar value limit on gifts, such as a maximum of $25 per gift.
Why Should You Be Worried?
Industry-Specific Concerns: A policy on gifts is especially important if your business is in a regulated industry, such as healthcare or finance. You should never allow the appearance of receiving a kickback that influences regulated decisions. For example, a doctor must not accept large gifts from a pharmaceutical company, because it might appear as though the company was bribing the doctor to prescribe certain medication. When in doubt, it's best to create a no-gift or minimal gift policy. In many clinics, healthcare staff cannot even accept pens or small gift items from vendors. The penalties for kickbacks are extremely heavy, and these businesses don't risk even the appearance of inappropriate gifts.
Gifts Between Employees: There's a fine line between managing employee relations and getting involved in your team members’ personal lives. You can't regulate what work friends give each other on personal time, but you can set guidelines for work-related gift-giving events. Consider creating a policy for gift exchanges. Allow employees to organize such events, but provide rules for dollar value limits and ensure that participation is genuinely optional. If gift giving is done in the office, make sure everyone understands that all items should be work appropriate.
Corporate gift giving is a way to recognize business relationships, valued customers and employees. By creating a gift-giving policy that governs the permitted value of any gifts received by your employees, you can protect your company's reputation. A clear policy also takes the burden of protection off your employees and allows them to decline inappropriate gifts without risking customer, vendor or team relationships.