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Business Gift Giving Etiquette Failures

Our company has made just about every mistake possible with business gift giving. We’ve given liquor to recovering alcoholics, we’ve given men’s cologne to ladies (hey, it was already wrapped), we’ve been subtly criticized for client bribery, we’ve been not-so-subtly criticized for the skimpiness of the gift (personally, I would appreciate a $25 gift card), we’ve harmed company morale by giving a pallet of gifts through our warehouse to clients and nothing to employees and we’ve spammed clients with impersonal printed greeting cards to show just exactly how much we care.

In other words, we’ve repeatedly run the 3000 meter gift giving steeplechase and collided with every barrier, fallen in every water hazard and been clotheslined over and over again.

Now, like so many losers before us in other endeavors, we’re considering throwing in the towel on gift giving entirely.

This is at least partly because our numerous failures are so glaring and the positive effects are subtle and subjective or at least that’s the case that Sales makes…. assuming there were some positive effects.

What do you think? Is it worth it? Is there a fool-proof way to do this? I should add that our company is like a hyper-critical dysfunctional family - the kind you don’t want to spend Christmas with.


Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

A good option is.....Charitable giving in their name. Send them a Christmas/Holiday card with the details. Tell them that instead of gifts (to them), you have decided to make a donation in their name. But even then, be mindful of the charity/ies. Maybe you can choose three or four and have them tick one off and have a return envelope or email.

The good thing about this is that it requires an engagement on their part (choosing the charity and sending the reply envelope or email) and it is paying it forward.

I know that you will be pressed for time but this option can be done in a day or two. Buy the cards, print out the accompanying note, decide on the charities and get their tax info. send it out by tomorrow with a response date of say the 15th so you can forward the donation by the 176th to 20th in time for Christmas.

OR.... you can just tell them (still with the card) that the whole Xmas gift budget will go to YOUR choice of charity/ies.....end and done!

Ern Miller
Title: Co-CEO
Company: Miller Small Business Solutions
(Co-CEO, Miller Small Business Solutions) |

UGH! I got that once. I HATED it! I resented the company for doing it. This is because, I got nothing out of the deal. First, physically, I got nothing. Second, the company got the praise from the charity, and the tax write-off from the government for the donation. And third, the charity was offering a free travel bag, or something for the donation level that was supposedly made in my name. Yet, when I called to inquire, they said it was sent to the company that made the donation for me.

On top of that, as one of the points you made expresses, the gift was made to some organization that I was politically the polar opposite.

Any company that makes a donation in my name will lose my business because I would rather, if nothing else, they send me a discount for $X instead of donating to something I would never donate to.

Ern Miller
Title: Co-CEO
Company: Miller Small Business Solutions
(Co-CEO, Miller Small Business Solutions) |

Just to throw a twist in this discussion, but not off topic.

One year, I mentioned in conversation to my boss what my favorite Christmas toy was...a Hot Wheels track. He then commented that he always wanted a slot car track but never got one. I made note of it. On another occasion he commented he always wanted to learn to juggle, which is something I had learned a long time ago.

So, Christmas was coming. I happened to find a battery-powered slot car track on sale for $6, and I found a pack of juggler balls with instructions at a Dollar Store.

It has been 10 years since then, and every year he sends me an email thanking me again for the gifts.

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

I would take Emerson's suggestion one step further. 1) Make donations to a group of charities (i.e. Local Food Bank, Humane Society, Children's Health, etc) and notify your partners/clients that your company made donations to these charities in honor of them in your holiday card. 2) Organize a group outing to the food bank or local center in need of help and include a photo of the team doing this work as your annual holiday cheer announcement. It makes it a bit easier than trying to collect information from the clients and then rushing to get funds out the door according to their wish.

We get cards from companies where everyone is holding a rake, or standing in a food line smiling. The message is always that 'our team is serving others' and wishes to share the same goodwill with our partners.

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

The charity idea is great.

Something to keep in mind too, there is no way to make everyone happy. That seems to be the case in your example too.

The saying that "It's the thought that counts" doesn't resonate with ungrateful people.

It seems to me that your efforts and intentions are genuinely good-natured. If you gave people a $50 gift card to somewhere, I would almost bet the same people would be dissatisfied because it wasn't to where they really like to shop, or it still isn't enough in their opinion.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Interesting Chris.

I obtained AMEX gift cards using our corporate AMEX rewards points in $100 denomination one year to provide to each and every employee as a holiday gift. We didn't gross up their pay for tax purposes either because the work in recognizing the rewards in the first place and then expensing through payroll was too much for an immaterial matter and, we aren't a taxable entity anyway. This was strictly an off book transaction.

And, you know what? I later heard from our HR person that some employees had complained that we chose AMEX gift cards - they are universal compared to specific store gift cards - because they didn't "shop where the rich executives shop and the couldn't use AMEX there".

What the heck?

Needless to say, it left a bad taste in my mouth.


Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

We give out $25 food or turkey certificates. You can use them in any grocery store for any food products. Everyone needs to eat!

Paula Purdy, CPA
Title: Director of Finance & Accounting
Company: Protestant Episcopal Cathedral Foundatio..
(Director of Finance & Accounting, Protestant Episcopal Cathedral Foundation) |

I am afraid I am going to have to disagree on the making donations to charities. To me this smacks of the Seinfeld episode in which George made contributions on behalf of the staff to a fake charity. I think giving to a charity is just another epic fail because it is incredibly impersonal, has no benefit to the employee and it feels like the company still does not get it. I don't know your industry but at one company that I worked at we had a lot of employees that worked at minimum wage or slightly higher. We gave out gift cards to the local mall that they could use at any store. They were very grateful because this truly allowed them to get something that they could use that they wouldn't normally be able to buy. Because we bought in bulk from the mall we were able to receive a discount. We did the same thing at a local grocery store and they gave us a discount for buying in bulk. Plus the employees loved it. We threw a small Christmas party where we had cake and a few other nibbles and we had an employee dressed up as Santa. We handed out the gift cards to everyone. The party lasted for two hours in the afternoon. We took pictures of the employees with Santa. Everyone had a great time and it didn't cost a lot of money.

Chris Facq
Title: Senior Consultant
Company: Revelwood
(Senior Consultant, Revelwood) |

With regard to employee recongnition through gift cards, I've observed the case where the value of the card was taxable, and for a relatively low paid employee the required withholding created a cash-flow problem the card didn't offset. A grocery store card might not create this problem, but a mall card could. The party certainly sounds nice.

(Vice President of Finance and CFO) |

I like charitable donations as a way to honor clients or even key vendors. I agree with Sarah that you should pick the charity or charities so that you can validate them and to ensure it's one that fits with your corporate mission. Charitable donations in lieu of gifts to employees is entirely different. That could be received very negatively. However, how many companies still give employee gifts, other than maybe a turkey for Thanksgiving? Most employees would rather see the money funneled to raises and bonuses.

(CFO) |

"Most employees would rather see the money funneled to raises and bonuses."

True but, I've often heard from other managers and staff in regards to the after hours activities ("holiday" parties) that most attend solely out of a sense of obligation that they'd prefer time off to spend with their families.

That makes sense to me and fits better with the corporate mantra of enjoying the holidays and appreciating one's family and private life. We spend the majority of our waking hours with our coworkers. Why on earth would we want to spend even more while cutting into our personal lives to do so?

This is made even more poignant by the great diversity of today's workforce. Although I admit bias because I live in the SF Bay Area where diversity, ethnic, religious and otherwise, is a given in the labor pool. (Our CEO once handed out Christmas hams to staff, including those who identified themselves as being Jewish!)

Holiday parties and corporate gifts are probably one of the best examples of "group think" I know of. The majority aren't really very supportive of them but are individually afraid to express their opinion for fear of being the first person to say something that others might construe as negative or not team like.

(Fiscal Services Manager) |

The past three years, department management has hosted a catered luncheon for the staff each December. While this plan lacks a tangible item given to each employee, it keeps matters simple and saves time and headaches.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Yes. Keep it simple and focused on the employees. That is truly a "gift" and shows appreciation as compared to a self aggrandizing promotion.

(CFO/Board Advisor) |

Great blog, and great show of honesty. Finally, someone wrote what we all know.

As for gifts, for Employees, nothing says happy holidays better than good old fashion CASH. You know, the paper kind - not plastic or gift cards or checks - CASH. You hand an Employee an envelope with a C-note, or two or three, and they are thrilled. Now, that says: "Thank you!". Yes, I know it's a hassle to go to the bank and get $30,000 - $100,000 to pass out. Then you have to stuff an envelope. Maybe even a note that says, "Thank you!" But, it works. It is what they really and in many cases need.

And for all the technicians out there, yes it is supposed to go into their W-2, but I've been handing out cash for 30 years, never once have I put it in a W-2, and never once has the IRS questioned this. Just do it. It works. And, it feels good. Trust me.

For Customers, do nothing unless it impacts the business.

Carla Gordon
Title: Accountant
Company: Govt
(Accountant, Govt) |

I agree with Paula. Giving a gift to a charity is not a gift to the employee at all.

(Director) |

I agree with Paula. People on lower levels need the $, and people on higher levels just view giving to a charity as a way of getting a tax deduction!

(President) |

We are a small firm (12 employees total). We host a Christmas party at the President's home each year (catered or food provided by the owners, depending on the year). We have gifts valued at about $25 for each employee and partner, which we do a fun gift exchange game. We try to purchase about 1/3 of the gifts as "male" gifts, 1/3 of the gifts as "female" gifts and 1/3 as gender neutral. We also have a white elephant exchange that everyone participates in.

Gifts range from small electronic items to tool sets, etc. Staff has a lot of fun trading and stealing from each other, everyone has a good time, and it works well.

When we are profitable, we also give a cash bonus to employees. Can't do that every year (especially since the recession), but are looking forward to doing it this year!

(Agent) |

I too worked at a company that gave out cash at the holidays (and other times). Just because the IRS is apparently 'fill-in-the-blank' (short handed, untrained, lazy, stupid) to find unreported cash giveaways doesn't mean you'll want to risk it. Only takes one disenchanted ex-employee to blow the whistle. You can't win with gifts. It will either be the wrong thing, not enough, some other reason.

(Chief Financial Officer) |

Our firm holds an opulent Christmas party that costs about $30,000+ and about 150-200 employees and guests attend (out of an employee base of 240.)

Every employee gets an extra week of salary as a Christmas bonus. We also get $25 gift cards with our pay stubs for Thanksgiving and Christmas.

We spend an extra ~ $20,000 at the Christmas party for employee length-of-service bonuses. We used to give out gift cards but I pointed out that when they are thousands of dollars apiece they are taxable whether they are gift cards or cash so we now give cash through payroll.

I gave my staff $100 apiece with personalized Christmas cards last year but I was told to not repeat it because other managers were not in a position to pass out that much.

I have received a few modest gifts from suppliers or people who want our business.

Vicki Lambert
Title: President and Academic Director
Company: The Payroll Advisor
(President and Academic Director, The Payroll Advisor) |

I understand that some of the posters are saying that the IRS may not find out about the cash gifts but it is never going to be fool-proof on that one. All these items whether mall gift cards to to grocery stores are taxable. And yes, I have employees complain every year that they get a $25 gift card and have to pay $15 extra in taxes. If you actually give a turkey or a ham or similar item of nominal value you can keep it as nontaxable. So canned hams to those at Christmas (meant to use the term) and other similar items to those who either do not celebrate Christmas or a ham would be incorrect. That way no tax is assessed. Usually cheaper too since you buy in bulk.

(CFO/Board Advisor) |

Seriously everyone? If you are concerned about the taxes, then pay those too for the employee. Gross-up the gift and pay the withholding taxes. Its a "gift" not a "bonus". Europe doesn't have this problem. They have the 13th month paycheck. So, if its a "bonus" call it one. People will have different expectations. But to call a "bonus" a "gift" - "a rose by any other name....."

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