I've been at my job about a month now. I'm starting to discover a few things that I don't like. Nothing illegal and nothing mind-blowing, it's just small things that aren't ethical. It's shafting a customer we know won't verify the orders, it's not paying back a customer that overpays our invoices, it's circumventing a shortage to make a few extra bucks. It's certainly changed my perspective on working for this place long-term. I felt pretty stupid being conscious of every penny of company money I'm spending or accounting for if they are treating customers like this (and, to be honest, getting away with it). I heard George Carlin's stand-up routine about business being about fucking the other guy before he fucks you the entire time I was finding this stuff out. Focus: Business ethics. Alt focus: Should I stay at a job where I have ethical issues with decisions the owners make? At this point, I'm going to find out more about industry practices and whether or not this is a widespread thing (the practice, in effect, is like ordering a 1/2 pound of meat and receiving 7.5 ounces instead of 8-just on a much larger scale). If I quit, based on ethical objections, would my next employer be impressed or wary?
Alt focus: Not if you can help it. Start distancing yourself from involvement in any shenanigans right now. I'd be curious to hear how shafting a customer you know won't verify the orders, or not paying back a customer that overpays invoices isn't illegal. Isn't taking money for something you didn't provide, or keeping money that isn't rightfully yours theft, or at least fraud?
Your next employer will be impressed if they share a similar scale of ethics. Otherwise, no. You're asking how long is a piece of string. Some people consider me an ethical business operator. My usual role as one of three directors is to stop the other two doing a bunch of stuff that skirts dangerously close to being shady. If you ask consumer advocates, I not only have horns but was present and presiding at every great calamity since the BC turned AD. I believe in honest dealing, paying your bills without fucking around, not short changing people and keeping your word. In a lot of respects, my experience is that those things are dying out. I do, however, have a very strong belief in caveat emptor. This puts me at odds with the regulatory environment here (and causes the questioning of my ethical character). Fuck them. I don't cater to morons, idiots and lazy dickheads who can't fend for themselves. If you make a mistake because you're too dumb, then you should wear it. ALT FOCUS: Figure out why you're there in the first place. Determine whether or not you're going to wear any liability. Ask yourself if you can live with what they're doing. Answer those questions and you'll have your answer. If it's worrying you enough now, odds are you can't live with it.
At the very least, it's unjust enrichment. It obviously depends on the laws of the jurisdiction, but it's illegal here.
I worked at Best Buy Geek Squad for a very short time. They'd charge a client 69$ for me to insert a USB key, press next four or five times and have the program remove the bloatware pre-installed on their product! That's ~63$ straight into the franchise ledger! It really upset me for some reason, I thought that working in the Geek Squad would be like actual computer repair, not charging a client 300$ so we could ship it to HP, have them repair it for 175$ and us pocket the difference. They charged 20$ for "Air Scrubbing", which is just air dusting the computer or laptop for 25-30 seconds. I started including the air cleaning in every package I sold to customers, and I noticed that it made more customers buy a package when they got a 20$ value for free. My supervisor didn't like having all that dust in the air in the backroom and complained to the managers that I was "stealing" so-to-speak. The managers gave it some thought and said I could keep going but to tack on a service fee of 5-7$ on each "package". Another example is Hollywood Accounting. Producers raise 70M$ and only spend 50M$, they tell their accountants that the movie cost 70M$ and pocket the 20M$ remaining. Fucking over the backend of many, many employees, writers, actors and directors.
If you're exposed to this shit a month in, it's only a matter of time for this company. At least it would be in my industry. The few extra percentage points on their margin should't be worth the risk of losing the customer. I'm surprised the customer doesn't have an auditor.
I worked for a place that was the shoddiest place in terms of business ethics and general management. Everyone had a separate pay day. It was all under the table, and you know why everyone had a different payday? Because at the end of your payday, your hours would be counted, and then a refund entered into the credit card machine, and then put onto your card. We would constantly fake receipts for warranty repair scams. There were about 100 empty boxes for high end camera equipment in a storage space. Why keep the empty boxes? Well, if we ever had a robbery they would be scattered all over and counted on the insurance. General screwing people over? Check. We had stuff on consignment, and if it sold, we would not call the person who had it on consignment, we would just wait until they came in and asked before giving them the money. We also sold things for higher than the person who brought it in knew, and pocketed the extra money. It was also the best place I have ever worked.
You see all kinds of crooked shit in the auto repair industry; it really gives the profession a bad name. In the franchise auto repair shop I used to work at, we would charge a 100% markup on any parts we sold. And they weren't even the best parts either. Our labor rates were exorbitant, and my boss would always make us charge labor for things that no one else charged for (ex: windshield wipers. After charging $10 for a $5 set of windhield wipers, he insisted that we charge ANOTHER $5 for labor. "The part doesn't just magically jump on by itself!" he would cry. If we didn't charge the labor for that bullshit, guess who paid for it: the technician.) Then he would get mad if we didn't charge enough labor. Ex: When I started working there, our labor rate for an axle gear oil change was $25 labor, $5 a pint for gear oil, and the obligatory 100% markup for the gasket, which usually came out to about $15. Well, when business started getting bad, the boss decided to charge $50 labor instead (way too much), and didn't tell me. He completely shit a brick and chewed me out for "stealing money from him." I probably wouldn't have minded so much if I actually SAW some of the money I was making for this guy. But no, the mechanics only made $5.15 an hour, no matter how much money we made for the shop. That guy was always bitching about how down and out broke he was, but was able to buy a brand new truck for himself and a new van for his wife, and his kids were always dressed in expensive name brands. Fuck you Jaime Arredondo, you cheap fuck. I laughed when your business finally went under and you ran back to Mexico with your tail between your legs. Then there was the truck dealer I used to work for. Dealerships want you to believe that they are the best, most trustworthy repair shops around, but you will actually see some of the most underhanded shit going on there. Overcharging, outright lying about work they did, you name it. Once again, I probably wouldn't have had such a problem with it if I actually got a cut of all the money they were extorting out of the customers. I remember this one time I had to replace a steel heater line on this one truck, and it was a helacious job that took about 8 hours. When paycheck time came around, THE FUCKWADS ONLY PAID ME FOR AN HOUR AND A HALF OF LABOR, WHICH WAS $13.50. I asked the service writer to see the final bill for the job, and they charged the customer over 5 hours of labor for it, which amounted to several hundred dollars. Where the fuck was the money going you assholes? I complained to the service manager about it, and he gave me some bullshit excuse. There were other jobs like that, and I complained more. The service manager had enough of my complaints and ended up firing me, claiming that there were some "customer complaints about my work." When I asked to know what the complaints were, he said that he couldn't tell me because they were confidential. Fuck you Richard Estevanez, you fat fuck. I laughed when you got fired for stealing from the company.
Not only is it smart economics, being unemployed makes you a lot less attractive to potential employers, even if you chose to be unemployed. Agreed, there's not many things worse than badmouthing your current employer in an interview, especially when you are young and naive, they'll probably assume you're not seeing the big picture and they aren't actually doing anything illegal (though outright theft is pretty damming). Like Scotch noted above, most businesses that pull shady shit fail, so it's far easier to assume you're the problem, not the company. "The no long term growth" and "want to go in a different direction" cliches are usually good in this type of situation.
As a commercial litigator, I get a laugh out of people complaining about the ethics of lawyers. Believe it or not, there are codified rules of ethics that lawyers have to follow. If they don't follow them, they can get disbarred. If they don't report some other attorney's violation of the code of ethics, they can get disbarred. There's a particularly mind-blowing case out there called Qualcomm v. Broadcomm where a first year associate reviewed some documents, brought them to the attention of his supervising attorney, but the documents ultimately should have been turned over. Everyone who had a hand in looking at these documents got sanctioned, got fired, and ultimately, were not disbarred, but only after two years of disciplinary proceedings. How'd you like that to be your first two years of practicing law? Think about it-- you're poring through thousands of documents. You find the "hot" documents and bring it to your boss' attention. He tells you they aren't responsive. You listen to him and go back to work. You've just breached the Rules of Ethics and are subject to discipline. Businesses, on the flip side, have no enforceable code of ethics (and if they did, they'd be twisted by the trial bar anyway, so as a defense lawyer, I'm not in saying they are needed). The stories I hear from my clients make my head spin.
I used to work at a hockey shop that was owned and operated by a guy named Steve who was a scam artist and had the worst business sense I have ever seen. He no longer used his go to scam when I worked there due to a change in manufacturer policy but I was told about his favorite scam while I worked there. When a customer would break a stick under warranty they would come in to the shop to have Steve send in the proof of purchase and warranty claim and order the replacement stick. Steve would tell the customer they would recieve a new one in the mail from the manufacturer. He would then send the proof of purchase to the manufacturer and tell them that the customer wanted to pick it up the replacement in store. Then he sold the replacement stick even though the replacements are clearly marked on the shaft "not covered by warranty". He would then tell the customer that the manufacturer said the warranty was void and made up some bullshit excuse. Sometimes he even sold customers their own replacements. It's because of shit like this that manufacturers no longer accept any warranty claims on sticks from retailers. The customer now has to send it in themselves and can't have it shipped to a retailer for in store pick up. He ended up owing vendors so much money that we could no longer place orders with any major manufacturors other than Graf. We were selling equipment that was two to four years old. The shop went under about 6 months after I quit. Rot in hell Steve.
What's unethical about building a profit margin and offsetting overhead costs? Did you ever eat in an Italian restaurant? Do you really think a plate of pasta comes close to the $18 menu price? This isn't an ethical issue. Alt focus: Some other ethical considerations of your situation: If the company's practices are in violation of your code of ethics, wouldn't that same code require you to take action other than terminating your employment in silent protest? By not taking action, are you not equally guilty for allowing those practices to continue unabated? Just some shit to think about.
The product (Laptops) they sell comes with software that is unwanted, not easy to remove and degrades system performance, also known as bloatware. They sell a service that removes all this and "cleans up" your system for 69$ a pop + anything extra they might drop on you. You tell me, is that ethical? Really? How about charging 20$+tx to air scrub your dingy old laptop for literally 15 to 30 seconds. Not even open it up and actually do an alcohol wipe down, just a superficial 'blowjob'. That's just thievery in my opinion.
There's a huge difference between charging for something deemed overpriced (Best Buy example) and actually overcharging by cutting product (first post). If I ordered an "air scrub", would the standard employee lie to my face and tell me it involved some high tech process? Or would they say they sprayed it down for half a minute? Then again, if you're dumb enough to order an "air scrub" you probably deserve 30 seconds of compressed air for $20.
That isn't a technical example of Hollywood accounting but I have heard that Clint Eastwood gets offered 90-100 million budget per film uses 60 to film it and pockets the rest. Usually most of the "employees" are paid for from the budget with a set amount and no profit sharing deal. What I think you are referring to are gross and net points off of profits as far as "Hollywood accounting." While the megastar director/actor might get a gross deal, they tend to give writers and low level creators the net deal. The best example I can think of was Forrest Gump, the books author was paid up front for the movie rights (a couple hundred thousand) plus "net" points. Then through the very shady accounting practices a film that grossed hundreds of millions in sales world wide had a negative return on investment wiping out the need to pay net points to anyone. I think they claim outrageous marketing and distribution cost to artificially put the movie in the red.
Where I last worked we did a lot of Pharmaceutical Campus Upgrades. Being a business and research environment, the demands they placed on the construction contractors were very rigid, ever changing, and often downright weird. We knew it was very difficult to work for us and to satisfy each project's needs. We didn't over pay because of it, but we paid quickly. In most standard construction contracts, the invoices were collected at the end of the month and sent in to the owner. The Owner then has roughly 30 days to approve this, and send out the check for the full (or adjusted amount). Then you factor in any subcontractors employing roughly the same system, and it could be up to 3-4 months before everyone was paid for the work they did. And most companies, when the economy turns sour will delay their paying of bills (within contractual obligations) to improve cash flow. The company I worked at tried to turn around work performed to bills paid as fast as possible. 30 days at the most IF there was a dispute about an invoice. It was probably the only reason why contractors were happy to work with us. That is the ability to turn work into revenue very quickly.
When I referred to caveat emptor above, this is what I was partially meaning. In almost any retail situation, 100% markup on cost is not only standard but it can also be the bottom end. Some industries routinely mark up 300-400% on cost, depending on what is necessary to run the place. Unless you've run a business and can say for certain exactly what its running costs are, you really don't have any business discussing its charging structure. That aside, if someone wants to pay $20 for a ten second compressed air job, well they're just fucking stupid. If someone tried to sell me on that sort of thing, the first thing I'd ask is, "What's the involve?". If they tell the truth, I know what I'm in for. If they lie to me, that's fraud. But I've done the reasonable thing. For example, any time someone offers me an extended warranty, I ask who's giving it, what it covers, how it's carried out and what it excludes if I'm in any way interested. Anyone who doesn't is just asking to be stitched up. There's nothing wrong with charging a high price for something unless it's an extenuating circumstance like an abuse of market power for a staple. If that price is too high, go to a competitor. People who don't shop things around deserve to pay the price they're charged.
The restaurant industry is full of bullshit regarding ethics. I could write a book and am actually considering it. More on this later, when I'm not half cut and can explain it properly.
KublaKahn reminded me of an old construction joke. A portion of the Whitehouse Fence was broken, and needed to be replaced. So the groundskeeper of the White House calls up 3 companies to put in a bid to do the work. First a contractor from Maryland shows up. The Maryland contractor looks at it and says, "Ok, this will be $800 to fix." Next a contractor from Virginia takes a look at it. He says, "No Problem! This will cost $700 to fix!" Finally a contractor from New Jersey shows up. He looks at it and says, "This will cost $2,700 to fix." The groundskeeper was astounded by this. The keeper replied, "$2,700!? That is way over what a guy from Virginia quoted me. How'd you get that much?" The contractor from New Jersey says in a hushed voice, "A thousand for you, a thousand for me, and we hire the guy from Virginia." I haven't seen too much unethical practices in my (short) time, because I mostly worked as the Owner's Representative. I did see a couple times some owner's rep's tell a couple contractors after receiving bids to "Sharpen their pencils." Meaning that they should try to cut the price down as much as they can. Being a fresh face out of college, I was shocked at this seeing as how it was specifically mentioned in a Construction Ethics case as being bad (from the viewpoint of the contractor who wasn't told to cut his bid down). While I never did anything like it, this act became insignificant to the other things going on that I've forgotten the details like Companies, or Projects it was for.
Let me go against the grain here. I used to be an auditor in a logistics company importing freight from china to vendors spread across the states. I had to ensure that if we underpaid a vendor we had to recoup the amt; if the vendor overpaid then we'd correct the change in the system to reflect the correct amt paid at that time subject to the applicable shipping rates on file. This had to be done to remain in compliance with customs, which +9/11 is no joke (if found in violation by customs they will shut you down and start dinging you while writing blank checks.) So, if you were a vendor or a steamship line and you had an auditor or manager, etc review the rates and amts paid, found we owed you, then all's you had to do was send an email. Until then, thanks.... I'm just trying to point out a situation where sometimes not giving the money back upon overpayment isn't technically theft.