Being Charged for Samples

My question involves collection proceedings in the State of: Michigan.

I was hired as a Wine Sales Rep for a new distribution company. I was told to take a sample of all three products to various stores and restaurants, along with business card and price sheet. These were free samples.

So I did.

Yesterday we had a meeting that included the "money guy". He looked at my spreadsheet of where I had distributed samples and said that was $3800 of wine and he wanted me to pay for it.

That's when I said "I quit, have a nice night" and left.

I was working on commission and never made a sale (only been there a week....long enough to pass out samples and do some follow-ups).

I do have my spreadsheet to back me, that I distributed free samples. So should I be worried? I also have my notes taken at the first meeting.

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I should add, under state law, they cannot charge for samples.

and why didn't you make it over to my side of the state with those free samples?


Just to be clear, you were an employee as opposed to an IC, right? I see no problem with charging an IC for the samples IF it is dealt with properly (doesn't sound like it was though). Samples to customers aren't free to make and there is nothing wrong with the manufacturer charging an IC for them providing products to the IC working for them.

Your resignation speech, hopefully, is a bit condensed. Was there any discussion of "whoa right there Earnest. When Julio hired me and provided these samples, there wasn't anything about me buying them from you" and hopefully a bit of response from them of some sort.

You distributed $3800 in free samples in a single week? Without making a single sale? Was this wine $1000 a bottle? If it is $38 a bottle, that would be twenty bottles a day. Were you standing on a street corner handing them out to passersby? I'm not sure there is a spreadsheet in the world that could cover that. I certainly see why they are questioning your story.

I was an IC, on commission.

The samples were 1 of each varietal (Merlot, Cab, Chard). Distributed to 48 potential customers (mostly restaurants, a chain party store - the main store only). $7.00 a bottle times 3 bottles to each place. $21 of wine to 48 customers the math is not even adding up.

I basically told him: I did as instructed, a bottle of each varietal to stores and restaurants. I was pounding the pavement going to different places. I was never told I had to pay for it.....

Only reply was a Text Message: Basically saying sorry for how things ended up; then asking me for my contact list (since I put all the work into that...I don't think so). And also asking if I had any wine left (nope).

I also found this little tidbit in the law: Can a licensee give away alcoholic beve
rages in conjunction with a promotion?
MCL 436.2025, Section 1025 (1) of the Michigan
Liquor Control Code states " A vendor shall not give away any alcoholic liquor of any kind or description at any time in connection with his or her business, except manufacturers for consumption on the premises only."

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I think also...they shot themselves in the foot. The places I did follow-up on did not like the product, finding it watery and did not think it would sell well.

Next: Two people who have never worked the wine industry....they think they are gonna do full-case sales only. Pretty funny when they want Spartan, WalMart, and Kroger as customers. Many of these stores want 6 bottles only, smaller places want 2-3 of a type only. And if the wholesaler drops off a case instead - it can be sent back out the door, or your entire order can be rejected. I've seen that happen.....

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PandorasBox;705885]I was an IC, on commission.

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Deetroit, we have a problem..

hopefully not but I couldn't resist the meme.

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The samples were 1 of each varietal (Merlot, Cab, Chard). Distributed to 48 potential customers (mostly restaurants, a chain party store - the main store only). $7.00 a bottle times 3 bottles to each place. $21 of wine to 48 customers the math is not even adding up.

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Uh..Duh!! How do they translate $1008 into $3800? Cost v. retail maybe (although that is not relevant doesn't mean they wouldn't try)

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I basically told him: I did as instructed, a bottle of each varietal to stores and restaurants. I was pounding the pavement going to different places. I was never told I had to pay for it.....

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then it sounds like there was no contract for you to pay for the vino.

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Only reply was a Text Message: Basically saying sorry for how things ended up; then asking me for my contact list (since I put all the work into that...I don't think so). And also asking if I had any wine left (nope).

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be cautious about the contact list. Clientele lists can be considered work product and proprietary property. It may not be worth the argument to not give it to them.

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I also found this little tidbit in the law: Can a licensee give away alcoholic beve
rages in conjunction with a promotion?
MCL 436.2025, Section 1025 (1) of the Michigan
Liquor Control Code states " A vendor shall not give away any alcoholic liquor of any kind or description at any time in connection with his or her business, except manufacturers for consumption on the premises only.

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not positive but I believe that is speaking to an open sample and a tasting at the manufacturers premises. In other words; go to a winery. The samples they pass out would be under the purview of that law.

Thanks JK

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Quoting PandorasBox

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MCL 436.2025, Section 1025 (1) of the Michigan
Liquor Control Code states " A vendor shall not give away any alcoholic liquor of any kind or description at any time in connection with his or her business, except manufacturers for consumption on the premises only."

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A vendor is "a person licensed by the commission to sell alcoholic liquor". They (and you) would appear to be a wholesaler ("a person who is licensed by the commission and sells beer, wine, or mixed spirit drink only to retailers or other licensees, and who sells sacramental wine as provided in section 301. A wholesaler includes a person who may also act as a master distributor...").

What is it with the Michigan legislature:

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Quoting MCL

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(4) "Vendor of spirits" means a person selling spirits to the commission.

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If Michigan were a state that ran its own liquor stores I could see why it might have a definition like that, but it doesn't, so... how much do those commissioners drink?

Probably a lot, lol.

Years ago, you did have to order Liquor from a state owned liquor store (God, it's been what.....19 years since I worked at Meijer).

I don't know how long ago they changed it to privatized companies.

Which I can see as being a headache. I used to call one number, get all my stuff on Wednesday.

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OK, I fired off an email: Obviously, blocked out names.....
__________________________________________________ ____________

I will send over the list of potential customers I visited.....

Upon receipt of:

A signed and notorized document stating:

(I) will not be charged or billed for any of the wine provided to her and distributed by her to businesses, which includes party stores and restaurants, along with a sample of each for herself as our sales rep.

This document must state (I) was instructed to enter a variety of businesses and offer a sample of the 3 varietals (Merlot, Cabernet Sauvignon, and Chardonnay) to each business, along with a business card and price sheet.

Additionally, it must state that full bottles were given as samples to these stores for Owners and Management to sample and were not to be sold.

It must also state (I) had no unsupervised access to the warehouse, that she had no key for the storage unit. Therefore, a complete inventory of sample cases that were ever in my possession was documented by yourself, (Owner), and the amount cannot and will not be changed, altered, or challenged. {note - this was all hand-written record keeping}

I would also like the MLCC license mailed to me when it arrives.

Upon receipt of this letter, I will send you a copy of the list of potential accounts I visited.

Sincerely,

-(Me)

PS: Any further contact should be in writing or email, no text messages.

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(Sorry,I have panic disorder and this did lead to one nasty long panic attack).

I think this would clear me in court, if it came down to it.

__________________________________________________ _________

When offering a sample, are you asking what their favorite is? Perhaps we can get away with giving 1 bottle if we can. If not, then we leave all 3 with the owner/buyer.
Are you keeping a list ofwho you gave samples to?

_________

Signed by The Company President, company name, his name, title, phone number....

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I will be getting that letter I requested :)

Letter received. And I kept my end of the bargain and sent them the list of businesses I visited.

Of course...I did not send the ideas I had or list of other places I was going to visit next.

I still think....they will not last. I know way too much more about the industry than 2 people retired from other industries. Not to be conceited.

did they drop the demand for payment?

and is the knowledge from the grape end of the business or the glass end?