In a business environment, one of the most difficult challenges facing an employer is keeping a solid employee base. No matter how well your business is doing financially, if you have a high employee turnover rate, you might need to find ways to keep your employees motivated. In addition to bonuses and insurance perks, a solid way to keep your employees happy is to establish an employee discount program. In fact, according to John Fiske, president of human resources at Abercrombie and Fitch, the 40% employee discount is what initially attracted many of his best supervisors and managers to seek employment with the company.

Setting up Employee Discounts

Step 1.

Determine the way that you want to set up your employee discount program. One option is to simply give all employees the same discount level – for example, 40% off the retail price for both full-time and part-time employees.

Step 2.

If you choose not to go with an across-the-board employee discount, consider offering full-time employees a higher discount rate than part-time employees. If an employee finds out that the discount rate will increase by going full-time, they might be willing to stay with your company. According to Richard Morgan of Morgan Publishing, an online publisher, by offering a fifty percent employee discount to all full-time employees, he was able to convince two part-time workers to commit to full-time employment.

Step 3.

Before announcing your employee discount, determine whether or not you wish the employee discount to apply to items that are on sale. By offering an employee discount on a sale item, you might wind up losing money on the item.

Step 4.

Decide whether or not you wish to offer the employee benefit to immediate family members. Again, depending upon the kind of business that you’re operating, this might increase employee retention. If your business sells clothing, an employee discount might keep a salesperson with three children from seeking employment elsewhere.

Step 5.

When you have decided on the kind of discount you wish to implement, make sure that you put it in writing and give a copy of the company policy to each employee. It would help to have them sign a form stating that they have been informed of the policy.


When bringing new personnel into your business, emphasize the employee discount as a perk. Include employee discount bonus cards as gifts or rewards. These might consist of an additional 10% over the normal employee discount.

Keep in mind that offering an employee discount is a terrific way of rewarding your employees, while at the same time helping your business bottom line. The more money that employees spend in your store using their employee discount, the better it is for the business.

Consider working with other merchants to offer “employee discount swaps.” For example, your company might offer 10% employee discounts to employees from a neighboring store, while that store would do the same for your workers.