Tag Archives: gifts and hospitality

How to Manage Unwanted Supplier Gifts

In days gone by, Christmas gifts from suppliers were the norm. Now it’s no longer the case. But how do you turn them down without offending anyone?

unwanted gifts
Photo by Porapak Apichodilok from Pexels

Way back, towards the end of the last century, year-end gifts from suppliers were not only abundant but also expected. It was common practice for suppliers to spend serious money on lavish trips, dining out and sports tickets for their procurement friends.

Sometimes they would send you a fridge or a TV to your home address. In return, it was expected that they would receive preferential treatment.  Gift policies, if they existed, were generally ignored.

Fast Forward to Today 

Most companies have a gift policy or at least a code of conduct which provides guidance on the acceptance of gifts from suppliers. Amazingly, these vary widely from zero tolerance to those which are too loose and therefore left open to interpretation. 

Some companies allow staff to accept nothing, not even pens and calendars.  Some are more realistic where luxury food items, flowers and low-value branded gifts are acceptable, usually up to a fixed value.

Julian Friedland, a US ethics professor and philosopher, believes that ethical businesses tend to succeed better over the long term. He says, “If you don’t have one [a gift policy], then you open yourself up to a credibility, liability problem. Whatever product you happen to be selling, whether it’s a service or actual object of any kind, can be compromised by the appearance of some conflict of interest.”

“A good policy will preclude employees from accepting anything that increases their self-worth—such as cash, stocks and shares, or expensive presents.”

Communicate the Gift Policy

Ideally, every organisation should clearly communicate its gift policy to any external party that could influence procurement behaviour. This includes not only current suppliers but aspiring suppliers, potential employees, consultants, business advisors and other associates.

A firm communication should have the effect of at least limiting the problem. However, it may be too late for the upcoming silly season.      

Managing Unacceptable Gifts

Despite the above, unacceptable gifts will arrive.  There are quite a few options here, each has its problems:

  • Return the gift to the supplier

Emphasise that, regretfully,  your policy precludes you from accepting this wonderful gift. (Did they know about the policy?). This action may run the risk of souring the future relationship a little, but too bad.

  • Share the spoils between members of the procurement team

This should have the effect of ensuring that no-one is influenced to act in favour of the supplier. The risk here is that end-users and any subject matter experts (SME) could be aggrieved and upset at being excluded. It becomes even more complicated when the procurement team is decentralised.  

  • Raffle the gifts internally and donate the proceeds to a chosen charity

Ideally, the charity or NGO should be one that is already supported by the organisation.  It is best not to choose the CEO’s favourite animal shelter or any unregistered charity or one with only minority support.

  • Donate the actual goods to a charity that would directly benefit and advise the supplier of your actions

This may conflict with your corporate social responsibility policy so check first.  This action could even have some upside for the supplier who could claim this as a form of sideways philanthropy.      

Review your Gifts Policy

It may be too late for this round but let’s do it. The gift policy should state whether employees are allowed to accept gifts both within and outside of the work premises.

If a gift is allowed, the policy should define the acceptable top value and type of gift permissible. It should also note any exceptions that need the approval of a more senior-level employee. 

“A good policy will preclude employees from accepting anything that increases their self-worth – such as cash, stocks and shares, or expensive presents.”

Top Tip: Keep a centralised record with details of all gifts accepted and make it open for reference. This keeps everyone honest. 

5 Ways to Thank a Supplier this Holiday Season

Gifts are fairly common this time of year. But are you doing anything to recognise and thank your suppliers for their hard work this year?

thank you
Photo from Gratisography on Pexels

Let the gift basket parade begin!

It is the holiday season. The cheese trays, cards, fruit towers, yeti coffee cups pour in from suppliers at this time of year. Savvy sales teams and account managers might even take the time to hand write a card thanking you for the business relationship and surprise you with a very thoughtful gift. 

Of course, these gifts are then shared, according to the policies and practices of ethical receipt of gifts, around the office, increasing the festive mood for everyone. 

As in any great, or even good, relationship, the gifts are exchanged – both ways.  Therefore, I am perplexed by the one-way exchange of gifts between suppliers and their customers.  Maybe that is because traditionally the gift from the customer was their business? 

However, what if we changed that this year and offered the gift of recognition and appreciation to our high performing and high potential suppliers?  Just like anyone else, a simple gift of appreciation motivates, builds trust, and breaks down barriers in the relationship. 

Here are 5 simple ways to do just that.

1. Write a thank you note

What if each year in October you performed a quick review of suppliers, noting the ones who performed exceptionally well this year?  Then, the category teams would acquire some thank you cards and write notes of gratitude to those suppliers. 

This simple act would be something that the suppliers would find as extraordinary. And therefore, would be motivated to give their best to you in the new year. 

2. Ask them how you could help them and then do it

Great suppliers love to help you. Often sharing expertise, insights into the marketplace, and solutions to complex business problems. 

At the same time, suppliers could also benefit from the same from their clients.  What if we asked our high performing and high potential suppliers how we can help them?  First of all, the supplier will not be accustomed to this. 

Once they realise the sincerity of the question and the help is received, there will be a bond formed with that supplier, open lines of honest communication are achieved, and more innovative solutions offered. 

3. Pay on time

Seems simple enough, right? (This made me laugh.) 

After working on these processes for most of my career within Procurement, this is a constant struggle for most. Then, you layer in some of the cash flow practices around the end of the year that some do, and the late payments escalate. 

How impressive would it be if, for your best suppliers, there was a proactive review of the accounts every autumn to ensure the accounts were paid up current by the end of the year. Wow! 

Not only would that make the suppliers extremely happy, but it would get Procurement and Accounts Payable resources out of the woods on those accounts for a while heading into the new year.

4. Facilitate an introduction

Suppliers always want to meet people who you know. These people could be within your company, or external within your networks.  Facilitating the introduction would be a great way to recognise a job well done. 

It shows you trust the supplier to perform well and that you are willing to share the success with others.

5. Give them a social media shout out

Of course, you will have to check on your internal policies on this one, but there is a large trend on social media platforms like LinkedIn to recognise suppliers for outstanding performance. 

This trend creates a perfect win-win scenario – often showing off some project that the buy side organisation is implementing, the supplier who helped them achieve success, and how they partnered together to get it done.  Sometimes these are large achievements, and sometimes they are small day to day ones like providing outstanding safety to employees. 

Suppliers love this type of shout out, as it gives them instant access to your network of contacts and a vote of confidence from you at the same time.

As Procurement organisations are looking to add value well beyond cost, your ability to create trusted, value adding, innovative relationships with your suppliers takes centre stage. Often big changes like the shift Procurement is going through, start with simple steps forward. 

So, this holiday season, let’s be grateful to those suppliers who achieved excellence this year by saying thank you.