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When Gifts Become Kickbacks and Lead to Problems for Restaurant Owners

It's fairly common practice for suppliers in this industry to give away "gifts" to their restaurant owner and manager customers, particularly if those folks make purchasing decisions on their products.

At the low end of the gift spectrum are things like concert and sports tickets, however, I've seen situations where chefs and managers have received items of much higher value like exotic vacations, high-end merchandise and even cash.

I recall my first seminar in New York City several years ago when a gentleman raised his hand and asked what he should do with the cash his meat vendor gives him? Well, I suppose if he's the owner, he can do what he pleases, but be aware that employees doing your purchasing can be offered these same "sweet" deals in return for their continued patronage, of course. Over time and even right away, the restaurant or owner will end up paying for these so-called "gifts" in the form of higher prices on the supplier's products.

Every restaurant should have a straightforward and well- communicated policy regarding what's appropriate and not appropriate 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, its grounds for immediate termination.

Another smart thing to do is 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.


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