Did lululemon make a mistake giving away free clothes?

How much leeway do you give your employees to be generous with your products or services?

Brad Bonner was in a panic that June morning in Victoria. His luggage had been lost and he had an important meeting in a few hours. Getting up early, he walked the downtown streets looking to see which store would be open the earliest where he could buy some suitable clothing.

He discovered that lululemon opened at 9 while most other stores opened at 10 a.m. Going into lululemon, he searched for clothes that would be suitable for his meeting. He found a pair of pants, a shirt, underwear and socks.

The pants needed to be hemmed, so he asked the sales associate if they could be done by 10 a.m. “For sure Mr. Bonner, go get a coffee and come back in a half hour and we will have it all ready for you. You can pay for it all then.”

As Brad told me the story, I rolled my eyes imagining this six-foot-one, 200-pound guy showing up in tight-fitting lycra to an important business meeting. Sensing my dismay, Brad, quickly added, “Dave, you would like the pants, they’re loose fitting, stylish and suitable for business with the label sewn up where people wouldn’t notice.”

The pants were hemmed when Brad returned, the package ready for him to take back to the hotel so he could shower and change for his meeting. As he put his credit card on the counter to pay, the sales associate said, “No Mr. Bonner, the clothes are on us.  You’ve been put out because you’ve lost your luggage and we want to take care of you!”

Brad said he was dumbfounded. Never in a thousand years would he have expected a store like lululemon to give him what amounted to nearly $200 in product for free. But it was happening. Brad was truly grateful.

Did lululemon make a mistake in giving away free clothes? Was this sales associate acting independently or is that a store policy?

Sure they had “clothed the naked” and helped a stranded traveller, but what about their stakeholders? What would happen to the bottom line if all of a sudden people heard Brad’s story and started rushing to their local lululemon store with a sob story about losing their clothes, too? Would share prices drop because they gave away inventory or would they rise because of the goodwill?

In business, we sometimes need to make decisions on the fly and hopefully we empower our staff to make similar decisions. This lululemon sales associate made a decision to help Brad with free product. They had no idea if Brad was a frequent shopper at lululemon. There was no expectation that Brad would come back and buy more clothing, although he did that afternoon.

Usually decisions like the one this associate made go unnoticed in the media and unrecognized by anyone other than the recipient and their friends. It’s usually the head offices of corporations like lululemon that give away free product in the calculated attempt to gain goodwill and free publicity.

But perhaps small business could learn from this lululemon associate’s act of generosity. How much leeway do you give your employees to be generous with your products or services? Do you have a policy for gifting, for charity? How could you ensure that you’re donating to the right causes and what limits do you need to set?

Every day in communities around North America, small businesses are bombarded with requests for money, product, advertising and donations, from charities, sports teams and individuals. Thanks to their generosity, small business is the backbone of the fundraising efforts of most charitable and non-profit organizations in your community.

However, without concrete policies on what’s suitable for your organization, you could have your staff giving away free product, goods, services and even money for causes you don’t support.

lululemon was indeed generous toward Brad that morning in Victoria. But did they get it right or did they make a mistake? You be the judge!

Dave Fuller, MBA, is an award winning business coach and a partner in the firm Pivotleader Inc. Comments on business at this time? Email dave@pivotleader.com

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