Trading Labor for Store Credit?

Gideon, a new subscriber to my free monthly e-newsletter recently wrote to ask about an opportunity he has that presents something of a delima.

"A large electronics store is offering me $XXX in-store credit to twist balloons for four hours during a large sale. They have hired me before for more money, and really liked my balloons. I really want the job for better connection with them and great advertisement for the tens of thousands of people attending the sale, however I don't want the cheap reputation, especially with such a large and wealthy cooperation. I have thought about using the "honorarium" system you talked about in "Viral Marketing" with the endorsed mailing, but would it work for competitive businesses (they only have one location)? What do you think I should do?"

There is nothing wrong with accepting gift certificate or store credit in exchange for your work as long as you will use the store credit. However, you should remember that most retail establishments get their inventory at a mark-up of AT LEAST 100%. That means, that for every $100 in store credit you get, it only costs the retailer $50 out of pocket. A dollar is still a dollar from YOUR side of the deal, but it's only 50 cents for them.

For this reason, if you are going to accept store credit, you can almost always negotiate a higher fee, at least 25% higher and usually up to 50-75% higher than your original fee.

So if you quoted tan original fee of $500 [a randomly selected number, NOT the original quote that Gideon made] and they came back with "We'll pay that in store credit" then you counter with "If' I'm getting store credit and I can only spend it here, I'll need $725" (note the use of the word "need" not "want").

They may counter with something less than that, but more than your original fee, or they may offer partial payment in cash and part in store credit.

Ultimately, it comes down to this: if you feel good about the deal, then it is a good deal. I wouldn't worry about getting a reputation of being someone cheap. I would expect that you would more likely get a reputation as someone savvy who wants to work and is easy to work with. That's not a bad thing.

--Julian Franklin

P.S. If you want to subscribe to the same free e-newsletter that Gideon subscribes to, that goes out each month, visit www.JulianSpeaks.com and sign up. You can cancel your subscription at any time and your information will be kept confidential at all times.

P.P.S. Gideon, this is such a great question and it came up today in a conversation I had with an old, trusted friend of mine as we discussed pricing. I'll tell you about our conversation in my next blog entry. Come back later this week.