Negative Commission

Deadlie

Hello all,

I'm just writing to see if anyone can help me get around negative commission at work.

I work in a large, electrical store and I am on minimum wage and commission. Up until January, the comm was pretty good. It wasn't spectacular, but it was enough to get by. Since then, we are now making 'negative commissions' on certain products.

For example, if I was to sell a printer, I might make 3 Euro commission with all the extras. However if I sell an iPad with warranty and a case, I'd lose 2 Euro. Overall my commission for these two sales would be one Euro. Prior to January it'd be three.

I am sure the company is not losing out when selling Apple or Samsung products, but it's hitting my bottom line and has brought my commission down about 50%

As you'd expect, we avoid selling Apple products quite a bit. But its unavoidable. People want them, and despite our best efforts, we're still losing out on the good work we've done throughout the day.

We've talked with management and "that's just the way it is now", was the take home point from the meeting between staff and managers.

If anyone has any ideas on how to avoid this or if there are any legal implications I'd love to hear!

kippy

Deadlie wrote: »

Hello all,

I'm just writing to see if anyone can help me get around negative commission at work.

I work in a large, electrical store and I am on minimum wage and commission. Up until January, the comm was pretty good. It wasn't spectacular, but it was enough to get by. Since then, we are now making 'negative commissions' on certain products.

For example, if I was to sell a printer, I might make 3 Euro commission with all the extras. However if I sell an iPad with warranty and a case, I'd lose 2 Euro. Overall my commission for these two sales would be one Euro. Prior to January it'd be three.

I am sure the company is not losing out when selling Apple or Samsung products, but it's hitting my bottom line and has brought my commission down about 50%

As you'd expect, we avoid selling Apple products quite a bit. But its unavoidable. People want them, and despite our best efforts, we're still losing out on the good work we've done throughout the day.

We've talked with management and "that's just the way it is now", was the take home point from the meeting between staff and managers.

If anyone has any ideas on how to avoid this or if there are any legal implications I'd love to hear!

I pity you and the job you do. What an absolutely awful way to get treated.
Do Apple and Samsung know that you are incentivesed NOT to sell their products or that this kind of thing goes on I wonder?

Best way out of it, upskill, get into something different.

KeithTS

Sorry, you have an incentive NOT to sell products?
If your employer doesn't want to sell these items, if they're loss making for instance, then why stock them?

From your description it sounds like your employer knows what products sell well and how to avoid paying out on your commission. Utter scam. I've never heard of a sales person being penalised for selling stock. Do you have a best sellers list and do the items that accrue "negative commission" fall into this, if so I'd pull your boss aside and call him/her out on this because it could well be intentional to cut down on payroll costs.

seamus

Well that sounds like a load of crap.

I'm not sure if the company are doing anything wrong here. Commission is at the end of the day not part of your base salary, so provided that the commission rules are applied to everyone equally then there's not a whole lot can be done about it.

Clearly the intention here is to get you guy to put on the hard sell to steer customers away from certain brands to choose others instead.

This practice appears to be legal from the commission standpoint. However if you were to end up overall negative for a given month, your employer is not permitted to make a deduction from your base wages. They can carry it over or write it off, they cannot make a deduction.

I think it would be worth raising a query with these guys: http://www.ccpc.ie/

Even if it's legal as an employment practice, it may not be strictly legal as a business practice because it's giving manufacturers a competitive edge (no doubt in return for some preferential pricing for your employer).

I wonder if you sent an anonymous email to the other manufacturers to let them know this is going on, would it be worth it.

I would love to know who this employer is, so that I could actively ensure that I buy the "negative" products elsewhere.

I don't know how this fits it with employment law, but it's a disgraceful practice. You mus be sick any time anyone asks for one of those products. It's encouraging you not to help customers, which is just madness.

turbot

Write to Apple because - such commission structures incentivise staff to recommend against their brand. This is stupid because Apple products are for the most part, fantastically well designed, well engineered pieces of kit. I can't imagine that Apple would stand for this.

It's also unethical for consumers where, you are likely to give non-impartial advice, which may make it illegal or anti-competitive.

Nody

turbot wrote: »

It's also unethical for consumers where, you are likely to give non-impartial advice, which may make it illegal or anti-competitive.

If you ever trust a seller in a store you're being taken for a ride to whatever gives them the most money...

Deadlie

Thanks everyone. Kind of guessed as much about the legality of it.

For those interested, it's Apple (iPad loses us €3 on average), Samsung (Tablets lose us €7 on average) and Sony (tablets lose about €0.50)

I've already upskilled, but am seriously struggling for other work, so expect to do another course in the year while I'm here before I get out!

Thanks all

blackbird98

This is the most ridiculous commission system that I've ever heard of. Why not recommend to the potential customer that the product in question (negative comm products) can be purchased at a better price somewhere else?

Is your commission structure outlined in your employment contract at all?

TheBody

What class of an idiot came up with such a system.

Customer: "Hi. I'd like to buy an ipad."

Sales rep: "How about a lovely printer instead?"

Customer: "Eh, no thanks, I think I'll just go elsewhere."

KeithTS

Deadlie wrote: »

Thanks everyone. Kind of guessed as much about the legality of it.

For those interested, it's Apple (iPad loses us €3 on average), Samsung (Tablets lose us €7 on average) and Sony (tablets lose about €0.50)

I've already upskilled, but am seriously struggling for other work, so expect to do another course in the year while I'm here before I get out!

Thanks all

So you lose money anytime you sell any of the major brands?
That's ridiculous and is just callous behavior from the employer. Is it a major retailer (I doubt it) or a small store? If there are other branches, contact the other stores, do their managers have this policy?

You'd be amazed, I ran a store years ago and in one our branches the management weren't giving the staff the correct commissions, overtime pay etc. A member of staff came to work for me for a week to cover holidays and was amazed at the going rate for a Sunday, brought it up with me and the other manager was removed within the month. If you are a chain it's definitely worth a look.

Creamy Goodness

Really would love to know the retailer, I'd make it my duty to tell all my family and friends never to buy from them again. What a horrible way to treat your staff!

seamus

KeithTS wrote: »

You'd be amazed, I ran a store years ago and in one our branches the management weren't giving the staff the correct commissions, overtime pay etc. A member of staff came to work for me for a week to cover holidays and was amazed at the going rate for a Sunday, brought it up with me and the other manager was removed within the month. If you are a chain it's definitely worth a look.

That's not a bad idea. OP, go into another branch on your day off with your work badge/ID and ask one of the sales guys there if the policy is the same in that shop.

If management themselves earn bonusses or commission based on the volume of high-margin products sold, then I could see an idiotic manager coming up with this kind of scheme in order to make his shop look like a great performer.

hardCopy

Just leave, even if you have to go to a competitor and do the same job. That's a crazy system to have.

Creamy Goodness

hardCopy wrote: »

Just leave, even if you have to go to a competitor and do the same job. That's a crazy system to have.

easier said than done. you can't just jack in a job in retail and walk into another one like you can do in some industries (*cough* I.T. *cough*).

SpaceTime

No you can see why Apple & Samsung are so keen to either sell directly online or via their own branded stores!

davo10

Are you an "expert" at your job by any chance?

Mrs OBumble

What would happen if whenever someone asked for a whats-it-on-the-negative-list, the salesperson's answer was always "Sorry, we're out of stock. We expect to have some more next week. Would you consider a what-is-alternative-on-positive-list instead"?

Only worth trying if you won't get fired for lying to customers.

nikkibikki

Can you get a manager to complete a sale for any of these negative commission things?

mikom

davo10 wrote: »

Are you an "expert" at your job by any chance?

DID you just slip something into your post there?

AlanG

If you let Apple know this was going on they would soon put a stop to it. Retailers are desperate to stock Apple products.

Squatman

the main thing that you can do immediately to protect yourself is talk thru the items with the customer, and then when it comes time to close the deal say something like "I will hand the sale over to Trevor, as i need to nip to the bathroom" it wont suit poor Trevor, but when everyone gets in on the act, managment may change their policies LOL

paudy1000

I used the have the same issue when I was in retail. We went to the cashier and said put it through as the managers sale. They don't get paid commission - didn't affect them. Then forget it - and focus on not selling that iPad next time

Direct anyone who wants to buy an ipad or the likes to a manager to complete the sale - let them take the commission hit.

You won't be very popular with the managers though...

CatFromHue

Does anyone know why the company would have such a system in place?

AlmightyCushion

CatFromHue wrote: »

Does anyone know why the company would have such a system in place?

Apple stuff is usually very low margin. They're trying to get the staff to push other tablets that make more margin for the company. The best option is to get in contact with one of the reps for Apple, Samsung and Sony and tell them about this new negative commission. They won't be too happy that staff are being put off selling their products. I can't see you getting commission back on them but they might just change it so that there is no commission on their products.

cruizer101

I'd be inclined to tell customers. Think about customer hears you will lose money by them buying the product there, they will likely but it elsewhere for same price as normally price of those items are fairly standard.

SpaceTime

I know if I were the Apple or Samsung distributor I would be absolutely furious about this and probably pull the entire product lines from the store.

Nobody wants a situation where the staff are being incentivised to badmouth your products.

Not a NSA agent

CatFromHue wrote: »

Does anyone know why the company would have such a system in place?

As mentioned, low margins. The shop probably sees very little money for iPad. Taking commission and costs out of that would leave very little.

Then if they are selling well they might not give commission to give an incentive for selling other products. Still makes negative commission complete bull**** though.

Starokan

That's an immensely difficult system to work with, the reasons for its implementation is obvious from the retailers point of view with more profit being made on other products but it is unbelievably unfair on the sales rep.

Its hard enough working for commission but for negative commission , I mean come on.

See can you let the reps for Apple, Samsung etc know whats happening, any electronics retailer must have their products and i'd imagine the companies would come down fairly hard on stores that were making it impossible for sales staff to push their products.

The only other way is to get the sales staff together and try force the issue with management, united front and all that.

SpaceTime

If they don't want to sell the products, why would they bother stocking them?

This makes no sense and would quite likely cause major issues with the distributors if they were to get wind of it.

Whatever about Apple, losing Samsung would mean a lot more than phones and IT products. It's the largest TV maker and also has a huge and increasing chunk of domestic appliances.

Miike

This negative commission is 'hardly normal' I reckon and I'd be willing to put my money where my mouth is.

AlmightyCushion

SpaceTime wrote: »

If they don't want to sell the products, why would they bother stocking them?

This makes no sense and would quite likely cause major issues with the distributors if they were to get wind of it.

Whatever about Apple, losing Samsung would mean a lot more than phones and IT products. It's the largest TV maker and also has a huge and increasing chunk of domestic appliances.

No matter how hard a salesperson will try there will still be people who buy an iPad, Samsung tablet etc. If they didn't stock them they'd lose sales and margin (as small as it is, it's still better than nothing) to their competitors. This negative commission thing essentially increases the margin they make on these products. If they only make €1 on every iPad sold, they still only make €1 but they save themselves €3 in commission payments and probably a little bit extra in employer's PRSI. So, either they sell something that makes them more money or they continue to sell iPads and reduce their commission payments. The company see it as a win, win situation for them.

Realistically, the staff will do everything in their power to not sell iPads even if it means the customer leaves the store with nothing so it'll more than likely lose the company sales and reduce profitability overall but more than likely some goon in head office was told to increase margin on tablets and this is what they came up with.

Doolittle51

Could you talk to your colleagues and agree not to handle sales of these products?

If a customer comes in looking for an Ipad, tell them that the manager must complete sales of all Apple products. Bring him to the customer service desk, ask for the manager to be called, then politely tell the manager that the customer needs their help with an Apple purchase. Smile and walk away.
If the customer asks why this is, tell them.

Realistically what can the manager do? Make life hard for you maybe, but you should start looking for a new job anyway. I can understand them offering 0% commission but enforcing negative commission is a really good way to get your staff to hate you.

Satriale

I'd be really interested to know the company, I'd hate to think any purchase I made was taking money from an already poorly paid salesperson.

Miike

Do I get banned if I tell you who the company is? I'm not OP!

Wanderer78

jebus lads, we re fupped really. our labour rights and laws have been decimated. no advice op but i wish you the best of luck

Bandana boy

I have seen Zero commission on products that sell themselves but negative is idiotic.
If you have a busy start of the week on Apple Products it could mean that you will not catch up the negative hit on selling good margin products or have to sell alot to do so.
As they cannot pay you less than your basic it would actively discourage selling good margin products some weeks , Lead to Sales people trying to defer sales into following weeks where maybe the apple hit wil be lower. Or know that any other sales will be "working for free" and give up .

Bonkers stuff

I have visions of a sales team hiding around the sales floor from some customer determined to buy an Ipod !

Sparko

That's ridiculous carry on. I'd be telling the customer there's none in stock.

AmberGold

I have 25 years experience in sales and have never seen anything like that. Are you 100% its correct.

It's important they stock the Apple products even though margins are tight. No reason to penalise sales staff though.

I'd just stop selling Apple tbh, then I'd leave when the right job comes along.

Mrs OBumble

Miike wrote: »

Do I get banned if I tell you who the company is? I'm not OP!

Not banned, but please don't. I'll probably have to snip it out, because we don't know if it's nationwide, or just a mad scheme that a local star-manager wanna-be invented.

It anyone really wants to know, they can PM.

P_1

I'd get the managers to handle Apple or Samsung sales or I'd set up a pool log in on the tills to be used solely for these negative commission sales.

Idiotic decision

RainyDay

Wanderer78 wrote: »

jebus lads, we re fupped really. our labour rights and laws have been decimated.

Actually, they haven't - labour laws have been strengthened considerably, including the most recent giving every worker the right to be represented by a union.

OP - Are you in a union? If not, you shout be.

hardCopy

Creamy Goodness wrote: »

easier said than done. you can't just jack in a job in retail and walk into another one like you can do in some industries (*cough* I.T. *cough*).

Of course, I wouldn't recommend leaving with nowhere to go, but I'd start looking today.

Miike

I see a few people got my hint while others are lost

Bandana boy

Miike wrote: »

I see a few people got my hint while others are lost

poconnor16

Is your store an authorised reseller of Apple and Samsung? There are account managers at these companies that would have war if they knew this information.

Victor

Much as they would like to, a manufacturer can't set a sales price (they can recommend one). So if there isn't enough margin, it's because they shop has under-priced the product. A spin when it comes to the telecoms industry is that the phone companies will incentive certain products, e.g. anything that is a data hog, so they the phone company can make money that way.

---

Note that you are still entitled to minimum wage - total pay divided by hours must exceed minimum wage.

How does your contract deal with commission and is negative commission mentioned?

paudy1000 wrote: »

I used the have the same issue when I was in retail. We went to the cashier and said put it through as the managers sale. They don't get paid commission - didn't affect them. Then forget it - and focus on not selling that iPad next time

Problems then arise at the end of the month when the manager has sold 100 iPads and nobody else has - people get fired for lack of performance.

Wanderer78 wrote: »

jebus lads, we re fupped really. our labour rights and laws have been decimated. no advice op but i wish you the best of luck

The, the law has stayed the same. Someone has come up with a **new** way to screw staff.

Wanderer78

RainyDay wrote: »

Actually, they haven't - labour laws have been strengthened considerably, including the most recent giving every worker the right to be represented by a union.

OP - Are you in a union? If not, you shout be.

fair point but theres something really going wrong in the workplace at the moment. all im hearing is the amount of people being badly paid and treated in the workplace at the moment and this is really bothering me

RainyDay

Wanderer78 wrote: »

fair point but theres something really going wrong in the workplace at the moment. all im hearing is the amount of people being badly paid and treated in the workplace at the moment and this is really bothering me

I'm with you, brother - but the first step has to be to organise. Staff have to join a union if they are to have a hope of being able to negotiate their way out of nonsense like this.