Study: freebies cost companies big money

By Lauren Gibbons and Kelsie Thompson | Originally Published: 02/13/12 11:12pm |

As many people throughout the nation prepare to purchase gifts and fancy dinners for their sweethearts this Valentine’s Day, a different kind of sweetheart might be giving away those gifts for free.

Sweethearting is a term used to describe the act of a company employee giving food products, retail items or other services to friends and family at a reduced cost or at no charge.

Clay Voorhees, an assistant professor of marketing at MSU, said the practice costs companies in the U.S. billions of dollars each year and continues to be a problem throughout the country.

Voorhees released a study in early February that he and his colleagues conducted in the Florida State University area, asking 171 employees of companies and about 610 of their customers served if they partook in sweethearting practices.

About 67 percent of the respondents reported participating in sweethearting during the past two months.

Voorhees said the problem is more well known as an issue in food and dining services, but also can be found in retail and service situations.

“I was shocked to see how common it was, even in retailing,” Voorhees said. “A lot of people felt there was truly no harm done.”

Although sweethearting hasn’t been an issue for Buffalo Wild Wings, 360 Albert Ave. — since most transactions are monitored by the restaurant’s managerial staff — it is a major problem in the food industry overall, said Nate Mesyn, the restaurant’s manager.

“The restaurant industry is all about budgeting,” he said. “If (employees) are giving away free products, it’s basically stealing from the company — our margin of error is really limited to keep prices and cost down.”

Depending on the situation, any employee caught giving away free products or merchandise would face a warning, or in some instances, termination, Mesyn said.

Although the study was conducted hundreds of miles away from East Lansing, Voorhees said the problem is happening everywhere — and businesses near college campuses could be especially susceptible because of a population with smaller budgets and temporary jobs.

“College campuses are a natural breeding ground for this to occur,” he said.

Chris Bryner, a barista at Espresso Royale, 527 E. Grand River Ave., said he knows for a fact sweethearting is happening because he was once an offender himself.

“I’ve watched it happen — I used to be that guy,” Bryner said. “There’s a lot that goes on without anyone knowing, so it’s probably more of a problem than we think.”