““Corruption will find a dozen alibis for its evil deeds.”” – American proverbOn Friday, we discussed when and how to do – and accept – favors in a business context. Today, let’s extend that discussion to include whether we should accept gifts from vendors.At AG Publishing, there has been a longtime argument on the subject. The yea-sayers see it as a natural and positive business relationship. It gives vendors a chance to say “thank you,” some argue. “It’s a perk you don’t have to pay for,” say others. “And what’s the harm in a free lunch?”

In this debate, I take the curmudgeon’s side. Employees, it seems to me, should accept no gifts whatsoever. Not even free lunches.

The vendor/client relationship is based on an equal exchange. A specific quantity of goods or services in return for an exact sum of money. The parties involved are the businesses and it is the businesses that should give and receive value. Nothing else should come into the picture.

I am not opposed to your having a relaxed, friendly relationship with someone who sells you services, but that is not the goal of the relationship. As a representative of a business that is buying a product/service, your job is to make sure your company gets full value for its money. And that means you must be prepared to be tough with your competitor. You cannot be his friend.

Free Lunches: – Is It Bribery?

It’s not only a question of fairness. Gift taking can result in bad judgement — even compromise. But don’t say that to anyone who believes in free lunches. You will face a storm of indignation.

I don’t believe marijuana leads to dope, but I do think a free lunch can reduce profits. It starts with a very innocent movement. The hand slides across the table. “I’ll take that,” he says. Next step? Damnation.

I have examples to back me up. One of my favorites was the discovery of a print buyer who had his entire personal credit card balance paid off by a letter shop.

This morning, talking with YE, an affable Israeli housepainter who has taken care of my home and rental properties in Florida for many years, this subject came up.

YE was talking about a big contract he was working on. He said he was making a lot of money – which I found curious. Normally, paint contractors don’t do well on large jobs. The bidding is too competitive. The margins are small.

“How’d you pull that off?” I wondered.

He smiled. “The guy who hired me. I’m painting his house.”

“For free?”

He smiled again.

“How does something like that happen?” I wanted to know. “How did you bring it up? Or did he? Weren’t both of you afraid that broaching the subject would get you in trouble?”

“We went to lunch,” YE explained. The bill came. I reached for it. He did nothing. I knew then I had him.”

Those were YE’s words. I didn’t make them up. I offer them merely as evidence.

If/when you have employees, encourage cordial relations with vendors – but remind them that their job is to represent you. Give them an expense account so they can pay for their own drinks/lunches/tickets/etc. And do the same thing yourself. Next time someone who wants your business offers to take care of something for you, insist on paying your own way – or pay for him too. The psychological weight of gratitude will stay where you want it . . . on your side of the scale.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]

Mark Morgan Ford

Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Wealth Builders Club. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.

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