When do gifts become kickbacks?

A friend of mine has a job in purchasing for a medium sized office. I actually work for the same company but don’t deal with vendors directly. He’s very new to the job and it is his first ‘real world’ job so he doesn’t have a whole lot of experiene. His position is pretty low in the department actually, he doesn’t make a whole lot of decisions and pretty much just processes orders at other people’s direction.

However, occasionally he does have some say in chosing a vendor. One area he does have a bit of flexibility as far as vendors is office supplies. He’s got a handful of regular vendors he can choose from pretty much at his discresion.

He gets a lot of catalogs and advertisements from the vendors all the time. Sometimes the ads have deals offering him gifts in exchange for orders. Basically, they offer his choise of a few items for making an order of $x. The gifts offered are usually pretty cheap, like $20-$50 range (boom boxes, clocks, etc.), and are definitely intended as personal gifts for the person ordering them (these aren’t buy 3 printers get 1 free or anything like that).

Now, on the surface this seems to me to be blatantly unethical. I would assume any bonuses the vendors throw in with orders would be the property of the company, not gifts for the employee placing the order. I also see this as a conflict of interest, as the employee would be chosing a vendor based on personal gains, not necessarily in the best interest of his employer.

But, its obvious the purchasing department gets a lot of other perks from vendors, such as lots of free lunches and sporting events. So, maybe this is just another perk for the department? Maybe deals like this are common and/or even expected?

I guess to sum up my real question, I’m just wondering if an employee could or should accept (fairly small) gifts or bonuses from vendors in exchange for placing orders. My guess would be no, but I honestly could see it both ways.

If he accepts a gift in exchange for an order that he could get elsewhere for less money and no gift, then I would call it a problem.

Thanks for the quick reply. This is one point I forgot to ask about. As far as I know, the vendors prices are probably competetive with or without the gifts. So, for all I know he wouldn’t necessarily be getting a worse deal for the company by buying from the vendor with the gifts.

How would this affect the situation? If he would have chosen the vendor offering the gifts even if they didn’t offer them, would he still be out of line accepting them?

depends on the government & corporate policy. iirc, over $50 is a bribe accordibg to the US government (check sarbannes-oxley).

intel & ge have global corporate gift acceptance limits of $20. i’ve had trouble giving away 128k memory sticks.

there are probably meal limits. certainly a general no-no for the vendor to reimburse a customer meal when the vendor wasn’t there.

your friend should ask both his manager and hr for the company policy.

oldest trick in the book is for a canny manager to catch you cheating on expenses or vendor ‘gifts.’ they can ‘discover’ the violation in the future and you pay the price.