Personal selling, by its very nature, promotes close working relationships. Customers often turn to salespeople for advice. They disclose confidential information freely to someone they trust. It is important that salespeople preserve the confidentiality of the information they receive.

It is not unusual for a customer to disclose information that may be of great value to a competitor. This might include the development of new products, plans to expand into new markets, or anticipated changes in personnel. A salesperson may be tempted to share confidential information with a representative of a competing firm. This breach of confidence might be seen as a means of gaining favor. In most cases, this action backfires and can violate contractual or legal obligations. The person who receives the confidential information quickly loses respect for the salesperson. A gossipy salesperson seldom develops a trusting relationship with a customer.

Reciprocity is a mutual exchange of benefits, as when a firm buys products from its own customers. Some business firms actually maintain a policy of reciprocity. For example, the manufacturer of commercial sheets and blankets may purchase hotel services from firms that use its products.

Is there anything wrong with the “you scratch my back and I’ll scratch yours” approach to doing business? The answer is sometimes yes. In some cases, the use of reciprocity borders on commercial blackmail. Salespeople have been known to approach firms that supply their company and encourage them to buy out of obligation. Reciprocity agreements are illegal when one company pressures another company to join in the agreement.

A business relationship based on reciprocity has other drawbacks. There is the ever-present temptation to take such customers for granted. A customer who buys out of obligation may take a backseat to customers who were won in the open market.

The book Arrogance and Accords: The Inside Story of the Honda Scandal describes one of the largest commercial corruption cases in U.S. history. Over a 15-year period, Honda officials received more than $50 million in cash and gifts from dealers eager to obtain fast-selling Honda cars and profitable franchises. Eighteen former Honda executives were convicted of obtaining kickbacks; most went to prison.15

In most cases, a bribe is wrong from a legal standpoint. In almost all cases, the bribe is wrong from an ethical point of view. However, bribery does exist, and a salesperson must be prepared to cope with it. It helps to have a well-established company policy to use as a reference point for what is not acceptable.16

Salespeople who sell products in foreign markets need to know that giving bribes is viewed as an acceptable business practice in some cultures. However, bribes or payoffs may violate the U.S. Foreign Corrupt Practices Act (FCPA) and other antibribery laws. Lucent Technologies Incorporated dismissed two high-ranking executives in China after it found potential violations of the FCPA.17

Gift giving is a common practice in America. However, some companies do maintain a “no gift” policy. Many companies report that their policy is either no gifts or nothing of real value. Some gifts, such as advertising novelties, planning calendars, or a meal, are of limited value and cannot be construed as a bribe or payoff.

There are some gray areas that separate a gift from a bribe. Most people agree that a token of insignificant price, such as a pen imprinted with a company logo or a desk calendar, is appropriate. These types of gifts are meant to foster goodwill. A bribe, on the other hand, is an attempt to influence the person receiving the gift.

Are there right and wrong ways to handle gift giving? The answer is yes. The following guidelines are helpful to any salesperson who is considering giving gifts to customers:

1. Do not give gifts before doing business with a customer. Do not use the gift as a substitute for effective selling methods.

2. Never convey the impression you are “buying” the customer’s business with gifts. When this happens, the gift becomes nothing more than a bribe.

3. When gift giving is done correctly, the customer clearly views it as symbolic of your appreciation—a “no strings attached” goodwill gesture.

4. Be sure the gift is not a violation of the policies of your firm or of your customer’s firm. Some firms do not allow employees to accept gifts at all. Other firms place a dollar limit on a gift’s value.

In summary, if you have second thoughts about giving a gift, do not do it. When you are sure some token is appropriate, keep it simple and thoughtful.

Entertainment is a widespread practice in the field of selling and may be viewed as a bribe by some people. The line dividing gifts, bribes, and entertainment is often quite arbitrary.

Salespeople must frequently decide how to handle entertaining. A few industries see entertainment as part of the approach used to obtain new accounts. This is especially true when competing products are nearly identical. A good example is the cardboard box industry. These products vary little in price and quality. Winning an account may involve knowing who to entertain and how to entertain.

Entertainment is a highly individualized process. One prospect might enjoy a professional football game, while another would be impressed most by a quiet meal at a good restaurant. The key is to get to know your prospect’s preferences. How does the person spend leisure time? How much time can the person spare for entertainment? You need to answer these and other questions before you invest time and money in entertainment.

Salespeople frequently compare their product’s qualities and characteristics with those of a competitor during the sales presentation. If such comparisons are inaccurate, misleading, or slander a company’s business reputation, such conduct is illegal. Competitors have sued hundreds of companies and manufacturers’ representatives for making slanderous statements while selling.

What constitutes business defamation? Steven M. Sack, coauthor of The Salesperson’s Legal Guide, provides the following examples:

1. Business slander. This arises when an unfair and untrue oral statement is made about a competitor. The statement becomes actionable when it is communicated to a third party and can be interpreted as damaging the competitor’s business reputation or the personal reputation of an individual in that business.

2. Business libel. This may be incurred when an unfair and untrue statement is made about a competitor in writing. The statement becomes actionable when it is communicated to a third party and can be interpreted as damaging the company.

3. Product disparagement. This occurs when false or deceptive comparisons or distorted claims are made concerning a competitor’s product, services, or property.18

Use of the Internet offers salespeople many advantages, but it can also create a number of ethical dilemmas. For example, e-mail abuse has become a modern-day problem because some employees forget that their employer owns the e-mail system. E-mail messages that contain inflammatory or abusive content, inappropriate jokes, embarrassing gossip, or breaches of confidentiality can lead to legal liabilities. A growing number of companies are developing policies that define permissible uses of their e-mail system.19

Some resourceful salespeople have created their own websites to alert, attract, or support clients. The rise of these “extranets” has created some problems because they often function outside of the company’s jurisdiction. What should top management do if a top salesperson encourages her customers to participate in a special Web auction for a backlogged product? What if the salesperson makes exaggerated claims about a new product? Every marketing firm needs to carefully monitor the development and use of extranets.20

The effectiveness of company policies as a deterrent to unethical behavior depends on two factors. The first is the firm’s attitude toward employees who violate these policies. If violations are routinely ignored, the policy’s effect soon erodes. Second, policies that influence personal selling need the support of the entire sales staff. Salespeople should have some voice in policy decisions; they are more apt to support policies they have helped develop.