What is an employee purchasing program?
An employee purchasing program gives employees a convenient way to purchase products and services using payroll deduction or at a discount directly from the manufacturer or a third-party provider.
Types of employee discount and purchasing programs
There are three different types of programs available to help employees obtain items and services, including:
- Merchant discounts: Manufacturers often offer discounts for employees who work in large organizations or are members of an association. To access the benefits of these programs, employees only need to identify their employer at the point of purchase and receive a discount for that company. These benefits are often available for computers and electronics, cell phone service providers, home and car insurance companies and hotels.
- Employee discount programs: Some organizations offer a discount program to give their employees access to discounted products and services. To provide this, the employer can either work with the vendor directly to get discounts for products and services or they can use an online platform. Many companies offer online platforms, where discounts have already been negotiated. Employees only need to log into the portal to access products and services from a wide variety of companies.
- Employee purchase programs: With this program, employees can purchase products and services on an interest-free basis through payroll deduction. This type of purchasing program gives employees access to thousands of products, vacation packages and services. Some of the common purchases that employees make through an employee purchase program include computers, furniture, appliances, sporting equipment, automotive services, travel, kids products and educational services, including college courses and test-prep services.
Why do employees use these programs?
Employees use discount and employee purchasing programs because it allows them to:
- Get discounts on products that they will purchase anyway
- Purchase conveniently on an interest-free basis through payroll deduction
- Shop online without having to go to a specific location
- Buy items through a payment program
Best practices for employee purchasing programs
Here are a few best practices you should keep in mind for an employee purchasing program:
Promote the program
If a purchasing program is a new benefit that you’re offering, be intentional about promoting it throughout your office, in your company newsletter or on the company web portal. Let employees know the many types of products and services that are available through the program so they understand how the program can help them save money on products they are likely already buying.
Train employees well
In order to ensure your employees are getting the most out of their benefits, train them on how the program works. If there is an online portal they need to log into or a process they need to follow, ensure that each employee knows the steps to take to make purchases through the program. You may want to consider periodically re-training employees to remind them that the program is available and encourage its use.
If you’re using an employee purchase program where employees can make purchases through payroll deductions, create limits for the amount of monthly spending they can do. Have a clear policy in place and communicate it to your employees so everyone fully understands how the program works.
Be watchful for transactions that take place during odd hours or have an unexpected shipping address. If you notice anything out of the ordinary, contact the employee immediately.
Benefits of an employee purchasing program
There are a number of reasons why an employee purchasing program is beneficial for employers. These programs help businesses to:
Attract top candidates
Businesses need to stand out during recruiting to attract the most talented candidates. Unique benefits, like an employee purchasing program, can appeal to candidates. They can also be especially beneficial for candidates who are moving into an area, for whom the idea of discounted local services is appealing.
Offer a low-cost, unique benefit
Employee purchasing programs are typically very inexpensive or even available at no cost to employers. These programs typically cost little to implement and administer.
Improve workplace morale
Offering an employee purchasing program helps employees get access to products and services that they may already be buying, but at a lower cost. Vacation planning is often easier through purchasing programs that offer discounts on hotels and theme parks.
Boost brand awareness and public perception
An employee purchasing program can help an employer’s marketing efforts as well, as the way your organization takes care of its employees through a unique benefits program becomes more widely known.
Frequently asked questions about employee purchasing programs
Here are some of the most frequently asked questions about employee purchasing programs.
What is an employee vehicle purchase program?
This is a program offered by some car dealerships that allow employees or family members to buy or lease a vehicle at a price lower than the manufacturer suggested retail price (MSRP)
How much do employee purchasing programs cost?
Pricing options for employee discount and purchasing programs can vary significantly depending on the type of purchasing program, whether you work with a vendor or negotiate discounts with companies directly.
Which types of purchasing programs are most popular with employees?
Research shows that a large percentage of employees use all three programs — merchant discounts programs, organizational discounts and payroll deduction — but that the employees were most likely to use an employee discount program where they log into an online portal.