How to determine fair value of a corporate gift?

We are debating here about the fair value of a corporate gift. Of course, the norms will vary from one country to another and one country to another, which can make it even more difficult to formulate a generic gifting policy. Customize it on basis of a simple principle of reciprocity. It can help you decide a proper level of gifting or hospitality.

What really goes as a ‘lavish’ present can be rather difficult to pinpoint. For instance, a senior person’s duties or work profile may entail attending sponsor events wherein hospitality is quite generous. And what might look insignificant to a high profile executive or top manager, in turn, could be considered more valuable to any junior-level employee.

At times, fair value of a present can be difficult to determine. Plus cross-cultural considerations do come into play. So a gift pegged at Rs 1000 may be treated as high value in an Indian company, but the same could be considered small by its multinational counterpart or vice versa.

Timing is also important. Are you close to forming a major deal with a key customer that if it goes through, would enhance your end of year incentive by a significant amount? Are you likely to receive a gift during or just before a large tender? It’s not merely giving away but also accepting gifts with suspicious intentions that can invite scrutiny in today’s intensely charged corporate environment. So you need to be careful on both counts.

Do take into account its appropriateness and whether it’s reasonably proportional to your status and that of the giver. Apply common sense while giving or receiving gifts so that it’s not seen as an overt facilitation payment so as to arouse suspicions. So if you choose to accept a gift, try to see if you will be able to give in return something equivalent in value?

For instance, in case your supplier presents you tickets to a concert or a gym membership, would you be obliged to reciprocate and would you be bound to ‘return the favor’ in some way? You have to find an honest answer on your own, and then only accept or decline a gift which might seem ‘too expensive’ or ‘too lavish’.

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