Commissions, Kickbacks and Referral Fees

We had an interesting discussion at The Wedding Party office today. A planning company called one of our vendors and actually asked her to raise her prices by 20% so that she can get that amount as a commission!  Several of our wedding pros have been approached by this company and asked to pay a commission in exchange for a referral, although not always quite so blatantly.

There can be a blurry line between commissions, kick backs and referrals.  Our company policy strictly prohibits the acceptance of kick backs or referral fees - we ask that our vendors pass that dollar amount along to our clients as a discount.  But what about a little gift thanking someone for a referral?  Is there a dollar amount that is too extravagant and the gift should be sent back?  It's not always black and white.

The Association of Bridal Consultants (of which we are members, and the above-mentioned company is not) has a Code of Ethics:

Members will...
Represent each client fairly and honestly, providing all agreed-to services in a timely and cost-efficient manner.
Establish reasonable, proper fees for services and provide written estimates to each client.
Use honest factual advertising.
Deal with employees fairly, in an unbiased manner.
Operate an establishment that is a credit to the Association and the community.
Disclose to clients any payment received from suppliers.

Members will...

  • Represent each client fairly and honestly, providing all agreed-to services in a timely and cost-efficient manner.
  • Establish reasonable, proper fees for services and provide written estimates to each client.
  • Use honest factual advertising.
  • Deal with employees fairly, in an unbiased manner.
  • Operate an establishment that is a credit to the Association and the community.
  • Disclose to clients any payment received from suppliers.

My question is whether or not the brides that hire this company know that not only are they paying them, but the vendors are also paying them.  And moreover, is the bride getting the best vendors for her wedding, or anyone that will pay a commission?

Many of the most well-respected professionals in North Florida will refuse to pay these commissions and therefore will not get referred by this other company.  Would you want to lose out on the best photographer or band in town simply because they will not pay your planner a commission?

I'd really love some feedback below, both from wedding pros and brides-to-be...What are your thoughts?