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Retool employee discount plan to reap benefits, avoid abuse

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in Human Resources,Leaders & Managers,Office Management

Earlier this month, coffee giant Starbucks Corp. was forced to withdraw an employee discount for a free iced coffee at its shops in the southeastern United States after things got out of hand.

The company said an e-mail offering a free Starbucks iced coffee was sent to a limited group of employees with instructions to forward it to family and friends. The problem? The employees did just that and redistributed the offer far and wide, and, according to the company, “beyond the original intent and beyond Starbucks’ control.” The company quickly rescinded the perk after being overwhelmed with thousands of requests to redeem the freebie.

The snafu at Starbucks illustrates what can happen when well-meaning employee discounts run amok and the rules of a company perk aren’t carefully crafted and maintained.

How can you avoid a similar mistake? Prevent employee abuse of company discounts by following these tips before you hand out the goodies:

-Be specific on eligibility. Decide whether your discounts will apply to full- or part-time employees, or both, and if you want to vary the amount.

Example: White Plains, N.Y.-based Starwood Hotels & Resorts offers full-time employees 25 nights a year at a discounted rate, while part-timers get 10 nights. If you include family members in your discount perks, always specify “immediate family members” if you wish to limit the reach.

-Consider tracking usage. Giving each eligible employee a discount code that must be used and entered with each purchase is one way to track frequency. Some companies issue cards, similar to gift cards, that are pre-loaded and used for a finite number of transactions.

Or, hand out coupons that can’t be duplicated, but must be collected at time of purchase. Example: Each quarter, Dell Inc. offers employees 10 percent and 15 percent off certain products.

-Set parameters. When deciding who gets the discount and how much, most companies look at data from their industry associations to determine the standard. You can check out industry standards for these types of benefits through the National Retail Federation (

-Include a time limit. If your perk applies to full-time employees throughout their employment with you, include that language in your policy.

: St. Louis-based Anheuser-Busch Cos. offers adult employees two free cases of beer a month.

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