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What is an Employee Discount?

Some retail stores offer employee discounts.
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  • Written By: Tricia Ellis-Christensen
  • Edited By: O. Wallace
  • Last Modified Date: 29 March 2014
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An employee discount may be offered as an incentive to work for a company. Usually the employee discount is available to those working for a company selling commercial goods. Sometimes, however, those working in the service industry may receive a discount on services.

Amount of an employee discount is highly variable. Standard discounts can range for 10-30% of regularly priced merchandise or services. Discounts may not apply to sale merchandise, or services at sale prices.

In retail clothing stores, offering an employee discount is often a smart business move for employers. Some stores may require employees to wear clothing purchased at the store, and these store usually offer a generous discount to make this affordable. Others merely rely on the discount to place temptation in front of the employee at all times. Such a discount ensures that some of the money earned will go directly back to the store.

In some cases, one may receive greater discounts if one has a higher-level position. At an average retail store, for example, a sales associate might receive a 10% discount, a supervisor 20%, and a manager 30-40%. Owners in consumer products industries don’t usually require a discount, since they can order products at cost.

Commercial goods industries like auto lots, may offer a significant employee discount to encourage employees to drive newer cars. Recently, companies like General Motors have had sales offering the same discount to regular consumers, since sales of larger cars have been sluggish.

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In a sense, offering the employee discount to the average consumer tends to devalue the discount for employee. It also usually results in lower commissions for employees. However, many find that some commission is better than none if cars won’t sell at regular prices.

Sometimes an employee discount may extend to other family members. It depends very much on the store policy. Some generously extend the discount to even distant family members, while others only offer the discount to the employee and perhaps a spouse, or children.

In some cases, working for one branch of a company can offer one an employee discount at a variety of stores. Many small retail companies are owned by much larger companies. This may result in discounting at any store owned by the company.

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Discuss this Article

anon144465
Post 5

my husband is a wsib employee and we would like to know what companies would offer discounts as a wsib employee. Can anyone help?

surfNturf
Post 4

Cupcake15-I know that many government employees are offered discounts for a variety of places. Dell offers discounts for its purchases from government employees.

In addition, government employees are given a discount on rental rates in some apartment communities as well as preferred interest rates on mortgage loans.

For example, banks offer teachers and police officers discounted rates on home mortgages. This is to encourage police officers and teachers to continue in the field and keep serving the public.

cupcake15
Post 3

Mutsy-Usually the wireless companies also offer employee discounts. For example, both the Nextel employee discount and the Verizon wireless employee discount offer 15% off of the monthly charges.

I remember when my husband worked for UPS; he received the employee discount on so many companies.

For example, he received a General Motors employee discount, but they called it a supplier discount which offered a discount on General Motors vehicles.

Upon buying a car, he just had to present the code that the company gave him. UPS, being such a large company was offered discounts on wireless providers like Verizon wireless, which was 20% discount on the monthly fees, and sometimes they would also provide discounts on the accessories.

If you work for a large company it is important to inquire about potential discounts because most companies offer them, but you will have to ask for it.

mutsy
Post 2

Sunshine31-I know that an airline employee discount is significant too. Working for an airline allows you to fly as a stand-by passenger for free.

This means that as long as there is room on the plane, you will be able to fly for free. There are drawbacks to the discount.

You really don’t know if you will be able to get on the flight. For example, when my mother worked for Pan Am we flew from Newark to Tampa during spring break.

We did not have a problem getting on the flight. However, the return trip was a different story. I missed a few days of school because I was flying as a stand-by passenger and there were no available seats for me.

It was a frustrating experience, but this usually does not happen too often. Still the ability to fly for free is a blessing, regardless of what you have to go through to get there.

Also, airline employee discount hotels are placed on a list for employees to view, as some hotels offer discounts for airline employees.

sunshine31
Post 1

An employee discount is a great benefit that often entices employees to work for a company. Sometimes retailers will offer 20% to 40% off their retail price for their employees.

For example, Macy’s offers its employees a 20% discount for all its employees including its seasonal help. These retailers often require their employees to obtain a store credit card and the employee discount is adjusted on the backend on their credit card statement at the end of the month.

This is often why many people seek seasonal employment with these retailers during the Christmas holidays.

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