When Does Paying Referral Commissions Raise Ethics Qeustions?

At LinkedIn, a great discussion on <a href="http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=54066&discussionID=2031924&commentID=2462364#commentID_2462364">when it is or isn't OK to pay referral fees</a>. I don't believe you have to be a member to see the conversation though you do if you want to make a comment (might have to join the group first, I don't know).

Here's my take.

When colleagues refer new business to me, I offer them a choice: commissions or "karma points" (good vibes and my thanks). As a copywriter, I get referrals from designers, complementary service providers, etc. I am comfortable with whichever they choose and see no ethical problem in my industry with paying a referral fee, any more than I do in paying a commission when someone sells a physical product.

However, there are industries where cash payments could easily be problematic if not disclosed, not just because of regulations but also because of ethics. The financial services field strikes me as a place to be particularly upfront, as with any companies providing services to elders, disabled people, or others in a position of vulnerability. And the issue of someone within a company referring to another part of the company is another place to be very upfront.

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