Let Me Call You Sweetheart – To the Tune of $80 Billion
Tags: customer satisfaction, Florida State, loyalty, Michigan State, sweethearting
Most of us have been in a situation at a bar or restaurant where our server comps a drink or a dessert. We appreciate the gesture and likely tip a bit more than we would have without the freebie.
Seems like an innocent exchange.
Well, apparently it’s not. It falls under the category of employee theft. And it even has a name: sweethearting.
According to a recent study by Clay Vorhees (Michigan State University) and Michael Brady and Michael Brusco (Florida State University), 40 percent of the $200 billion in U.S. employee theft costs stems from sweethearting, costing retailers $80 billion annually.
Sweethearting is defined as “unauthorized discounts to customers, thus not embraced by management.” The survey of 800 customers and employees –– in restaurants, hotels, car washes, cable TV, installation and repair companies, tanning salons and other retailers and service providers –– showed that 67% have participated in sweethearting within the past two months, some for the prospect of receiving better tips.
However, it’s not all bad. According to the study, sweethearting is also key to building customer satisfaction and loyalty.
Vorhees, Brady and Brusco urge employers to conduct more in-depth screening and training to limit “the potential damaging effects of deviant acts such as sweethearting.”
Some may call it deviant. I, for one, call it sweet!