What Are Steward Sales?

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Steward sales refers to the practice of selling business inventory at cost to employees. Businesses in the hospitality industry, such as hotels and restaurants, are most likely to allow this special form of employee discount and such transactions can benefit both businesses and employees. Bookkeepers or accountants treat steward sales differently from regular sales to customers.

Steward Sales Example

  • Suppose that a case of wine costs $75 at a liquor store, but a nearby restaurant buys large quantities of this wine and gets the identical case for $55. If the restaurant allows steward sales, its employees could buy the case for $55 through their employer.

How Steward Sales Benefit Employees

  • For employees in the hospitality industry, steward sales can drastically reduce the amount they pay for certain goods. According to Andrew Hale Feinstein and John Stefanelli, businesses typically have much more purchasing power than individual workers and save money by buying in bulk. Steward sales let employees pay lower prices than they could negotiate by themselves.

How Steward Sales Benefit Businesses

  • Because hotels and restaurants save by buying in bulk, steward sales can actually reduce the cost of goods to the employer. By filling employee demand through steward sales, companies can benefit from volume discounts and reduce the price per unit their businesses pay.

Accounting for Steward Sales

  • Businesses treat steward sales differently from regular sales to customers. As Paul Dittmer and Gerald G. Griffin explain, "the amounts paid by employees are customarily treated as credits to cost rather than as revenue. In other words, steward sales are similar to reimbursements; they are considered cost reductions rather than revenue increases." In other words, steward sales affect the bottom line by reducing costs rather than by increasing revenue.

References

  • Photo Credit Thinkstock/Comstock/Getty Images
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