Ethical Issues That Impact the Personal Selling Process

Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

Many people enjoy working in sales because of the autonomy to make decisions, leverage deals, and satisfy customers. However, with freedom comes the responsibility to act in ethical ways.

Ethics and the Salesperson

When John Jacobsen started his job at Cosgmere Consulting, Inc., he was handed a list of clients and a company credit card. That very afternoon, Jacobsen wrangled up his friends and celebrated at a local watering hole. When the check came, Jacobsen considered paying with the company credit card, but it occurred to him that it would not be ethical to use Cogsmere's credit card for personal expenses. Jacobsen decided to do the right thing, and paid with his own money. Jacobson's ethical behavior will pay off. That means doing what's morally right and just.

This brings us to some of the common ethical issues that salespeople face in their professional lives, which can include:

  • Misuse of company credit cards or expense accounts
  • Reporting inaccurate work hours
  • Inflating sales data, number of contact calls made, or sales history
  • Accepting kickbacks
  • Giving lavish gifts in exchange for business
  • Engaging in high pressure or predatory sales

Let's discuss each of these.

Corporate Credit Cards, Hours Worked, and Sales Data Issues

Some salespeople aren't as wise as Mr. Jacobsen. Misusing a company credit card or expense account means using the company's funds to go out to dinner, see a show, or stay at a hotel. It could even mean bringing a spouse or friend on a business trip without permission. When an employee completes an expense report, he is essentially attesting to the validity of the purchases he made throughout the period. If a dishonest salesperson slips a non-qualifying receipt past the bookkeeper, the company loses money.

The same goes for reporting inaccurate work hours. For many salespeople, the job leaves plenty of time away from direct supervision. Salespeople may be assigned a territory that crosses state lines or even takes them out of the country. With all of that freedom, it may be tempting to take a few hours to oneself to explore and enjoy a new city, but this would be theft of time. The company expects that you will continue to work your regular schedule even though you are not in your usual location. Taking the time to discover the best café or the tallest building takes the salesperson away from the purpose of the trip, which is to sell!

The salesman who cuts out early to grab a sightseeing bus will have to account for his time somehow. He may inflate hours worked on his time card. Who would know? Probably nobody, but the employee would be telling a lie. Even if nobody ever found out about the afternoon jaunt to the national park, the salesperson would have to report back to the boss about his day. He may be able to explain the hours away, but how can he explain the limited amount of contacts he made? He probably couldn't, which may lead the salesperson to inflate the number of contact calls. Since nobody was watching, the salesperson can exaggerate the number of calls he made so that he looks busier than he was. But if he does that, he is not tapping into the customer base that he should, and the company may lose business to a competitor.

Kickback and Gift Issues

A desperate salesman may be tempted to accept a kickback for striking the right deal. A kickback is when a salesperson offers a good deal in exchange for something of value, like a vacation or a gift certificate to a fancy restaurant. What makes this wrong, you ask? Well, by giving one customer a better deal than another in exchange for a kickback, he is not treating every client fairly.

Giving a gift in exchange for business is just as unethical. If you've ever worked in an office, you know that it is common for salespeople to arrive with fruit baskets, candy, or other gifts as a way of saying thanks for the business. There's nothing wrong with that, but it becomes unethical when the salesperson gives the gift in exchange for a business deal. Just like accepting a kickback, giving certain clients a personal incentive to buy from the company creates an unfair competitive edge for the customer on the take.

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