The Ethics of Surcharges and Kickbacks

I got a call recently from a wedding planner acting on behalf of a couple who were looking for a photographer. During the course of the call, I was told I wouldn’t be able to contact the couple directly. 

The planner explained that the bride was very busy, that the couple had hired her to provide a “full service” experience, and that everything (client correspondence, contract, fees, and product fulfillment) would be done through her, rather than through the bride.

The planner, I learned, intended to add a surcharge to my fees. Essentially, she was charging a “finders fee” for every vendor the bride and groom hired. Whether the couple knew this or not, it struck me as wrong to allow the planner to mark up my fees.

I subsequently told the planner that I would not do business with her. 

Putting the Client Last

Here are some of the reasons for my decision:

1. I don’t believe the bride should have to pay more for my services because she retained a planner to help her with her wedding.

2. The bride has no way to address any issues about her wedding day photography with me directly.

3. I normally offer a discount to couples who use a qualified planner. It’s an incentive for them, and my discount effectively goes straight into the planner’s pocket.

I work regularly with several planners. None of them add a surcharge to my fee or prevent me from interacting with wedding couples directly. So I called my planner friends to ask about this planner’s approach.

One of my friends explained that while the planner’s business model is common, it is more often associated with event production companies. Event production companies may “produce” the event for a client and add a fee for every subcontractor they hire to produce the event. 

“But in wedding photography?” I asked. 

“Most of us don’t work this way,” she said. “I don’t want to limit myself to one or two vendors. I want to be able to refer people to a number of different vendors based upon the client profile.”

I then asked her if kickbacks are common in the planning business, too.

“All too common,” she said.

Standard Operating Procedure?

Kickbacks are even worse than surcharges, because they are deceptive.

That’s when a photographer charges a fee to the wedding couple, then pays part of that fee to the planner for bringing him the business — generally without the couple knowing about the transaction.

After my experience with the planner on the phone, and after talking at length with my friend, I decided to post a question about surcharges and kickbacks on an online forum for event planners. The responses confirmed my friend’s view that these business practices are all too common.

Interestingly, after I had received several responses, my question was deleted from the forum.

Personally, I think that surcharges and kickbacks are unethical, particularly if the client is unaware of them. It seems to me that the planner and photographer are putting profits above their clients’ best interests.

What do you think?

31 Responses to “The Ethics of Surcharges and Kickbacks”

  1. I prefer not to contract with couples using a wedding planner. My experience in the past working with wedding planners or coordinators has not been good. Mostly they are disruptful to the Photographer and get in the way. One wedding coordinator that the bride and groom hired in the past was a complete control freak and had to be told to back off after interfering. Charging a surcharge to be recommended is bad business. It cost enough to run a Photography studio and then have to pay a wedding planner a finders fee to add to the costs.

  2. Wow that really just sounds so back alley and sleezy. I agree if you about the ethics of this practice and applaud you for not partaking in it.

  3. I work with a few wedding planners, and there have been other in the past that I wouldn't work with. The planners I work with do take a cut, commission, kickback whatever you like to call it. My fee remains the same to the couple, they pay the planner and the planner pays me minus the cut.

    Working with a planned wedding where the co-ordinator is someone I trust to do a great job is a pleasure. Instead of turning to me for suggestions if something goes wrong, the planner just sorts it out. And because the planner is there, it is rare that anything does go wrong.

    In terms of the payment that is a non-issue. Some upmarket venues only allow co-ordinated weddings and having a good relationship with the planner is my key to shooting those places. Plus it doesn't cost me anything in terms of advertising to get the weddings with a planner. If all my weddings were with a planner, I'd never need advertise.

    Paying a commission is just part of business. You want your cookies displayed at the end of the aisle in the supermarket so you sell more cookies? Guess what, you pay the supermarket a commission to get that preferential treatment. The customer still pays the same price.

    You use a headhunter to get you that new executive to work for your company then you'll pay them a commission. The employee still gets paid the same amount.

    As long as the photographer is paying the commission and the couple are not paying a premium, I have no problem with it and it is common practice across all business sectors.

  4. Thank you for taking a strong stance on this issue in favor of the bride and groom's best interests. As a wedding consultant, I completely agree with you and will not recommend any vendors interested in kickbacks or 'finders fees.' It frustrates me that there are others in the industry who operate any differently. When a couple hires me, they are getting someone who will look out for their best interests. My taking money from other vendors is not in the best interests of my clients, and I make sure that they know that.

  5. Hi David,

    Thanks for your explanation. It seems it's a standard way to do business in your area. However, in the US, it's not something that is deemed appropriate or even ethical.

    I'm curious to know whether the couples who commission you to shoot their wedding understand there is a fee by the planner and that you're paying the planner as part of doing business?

    Here in the US, it's often done under the table, without the client's knowledge. And that's known as a kickback.

    A quick check in Merriam-Webster found this definition:"a return of a part of a sum received often because of confidential agreement or coercion"

    Do you think it's fair for a group of professionals to work together in this way?

    Or, how about working in a marketplace where there are two sets of rules; the first set involves payments under the table and the second set is more transparent?

    Thanks again for your contribution!

  6. As an Accredited Bridal Consultant and active member of the Association of Bridal Consultants, I can tell you that all ABC members are required to "disclose to clients any payments received from suppliers" by the association's Code of Ethics. My company does not accept referral fees, kick backs, or any other type of incentive - we simply refer the best vendors for the client, and leave it to the client to make the final decision and contract with each vendor. If vendors do offer us any type of incentive, we request that they offer an upgrade to the client - an extra hour on the wedding day, a free engagement session, etc.

  7. I know there are Wedding Planners out there from coast to coast using the business models described in the article. That's unfortunate.
    I feel a better model for wedding planners is the one used by interior decorators. Many decorators charge their clients a percentage fee based on the final cost of the event say 20% for the purposes of demonstration. However these decorators guarantee to save the client at least 10%-15% on all contracted services and on most hard goods so they make their fee by having a great book filled with well cultivated contacts who offer them a modest discount on their services. This model removes the ethical dilemma from the equation. The decorator solicits a general discount based on bringing the work to the contractor. The contractor works at the direction of the decorator on behalf of the client and everyone is aware of what the situation is. I work with several wedding planners who are experiencing tremendous growth after switching to this model. Their reputations are on the rise and everyone feels good about being involved.

    On a side note I caution us all not to paint whole service industries with one broad brush. Bad wedding planners are out there. Unethical practices do exist but I am reticent to assume that the profession as a whole is intrusive, or unethical.

  8. I'm sorry, but I don't see the big issue here. This is capitalism at work. You are paying a finder's fee to an agent who found you some business. If you feel there is an ethical issue here, then you must have an ethical issue with real estate agents, or agents of any kind. Consider this; If you were to partially subcontract your contracted work for a client to another photographer, would you then pass the entire payment from the client to your subcontractor? If you answer yes, then what actaully makes this photographer a subcontractor if you are not being paid as a finding or supervising agent? You are being paid as an agent because YOU are assuming a level of responsibilty for your subcontractors performance. That is what you are paying for. If you messed up the wedding photos, the bride will go after the planner, not you.
    Agents are supposed to be paid for finding your a method of earning money. And that is what their business is all about. I have no problem at all working with an agent and rewarding them for finding a contract for me.

  9. Hi Sean,

    "It seems it's a standard way to do business in your area. However, in the US, it's not something that is deemed appropriate or even ethical."

    Really? Since when? Mark summed it up perfectly. Add to real estate agents and decorators, people like financial planners and insurance agents. It's the same business model, it is acceptable, commonplace and legal.

    As for ethical that's an individual to decide but bear in mind that a planner would have carefully vetted the photographers they present to a bride to choose from. The bride can rest assured that the photographer they select will do the job expected of them and be an appropriate match for the couple.

    In effect, that's what they are being paid for, not a bribe or kickback from the photographer.

  10. As a planner, I am appalled that someone would take money from a vendor for referring them to a couple! That is your job. The couple is paying you to help them find reputable vendors that fit their needs, not to make more money off of them. I would never take money from any vendor. In fact, if someone wants to pay me for referring them, I have to say to myself " why can't they get business without a hook?". It is shooting myself in the foot to take kickbacks. When the brides find out you do it, they run the other way. When I refer a vendor, my conscience is clear. I refer those I feel confident in, not those who are putting money in my pocket. I must take issue with Mr Giannamore. I NEVER get in a photographer's way- or a catering manager, or anyone. My job is to stay in the background and make sure the day goes the way the bride wants it to go. If I am getting in your way- you are not doing your job! Not all planners are created equal.

  11. Mark,

    Thanks for your note. There definitely seems to be a lot of disagreement here.

    You commented that "If you messed up the wedding photos, the bride will go after the planner, not you."

    I take an issue with the idea that I'm not responsible for my work and that I'm off the hook. If we are real estate agents. Then the house I sold you is the one I also built. I'm responsible and there's no way around it.

    I don't think a bride would buy your reasoning either.

    Then you said "Agents are supposed to be paid for finding you a method of earning money." I agree that an agent is different that an independent business person helping a couple to plan their event.

    Agents in photography are a time-honored tradition.

    But a planner is not an agent; unless I signed on with a planner as contract photographer (read work-for-hire), then my business is my own and I must depend on my own marketing efforts to find work. And that might include a great relationship with a wedding planner!

    But I'm still having a hard time with this. We want to split hairs and make the argument that says "this is how the world works." When in fact, this isn't the way it should work and it's better known as cheating.

    The worst part of course is when the customer loses. If you knew after the fact of payments under the table (wink, wink, nudge, nudge) and you were perhaps pressured by the planner to go with a photographer you didn't click with, wouldn't you have a right to be upset?

  12. In response to Wendy Harrington about a Photographer not doing his job if the wedding planner gets in the way. I take my job seriously and I do not tolerate anyone interferring while I am taking photo's. It would be irrespnsible if I let a wedding planner take complete control of my Photography. If I let that happen then you would be correct in saying that a Photographer is not doing their job. Again, my experience has not been positive with wedding planners. The wedding planner that I referered to should have been run out of the business. Finally I have learned in 19 years in business that if you don't correct a problem you will have to answer to the Bride & Groom irregardless of who caused the problem. A Photographer who is doing their job is expected to have enough experience to solve any problem that is thrown their way.

  13. We're all appalled at Rod Blagojevich and the pay-to-play scheme in Illinois. So, why is that any different from a wedding coordinator who will only recommend vendors who agree to pay a kickback?

    Early in my career I was approached by a planner who offered to help me get weddings if I would agree to pay her finder's fees. I said "no, because I think you are serving your client's best when you recommend vendors because they do an awesome job. Recommending folks because they've agreed to pay you a kickback is not in your client's best interest and I don't want to work that way."

    But, I see two problems in your scenario, and the second is just as bad--the idea that you can't communicate directly with your own client. That would be a deal breaker for me. I had one wedding where the planner, who was hired after I was hired, told me I couldn't communicate directly with the bride anymore. I usually talk for an hour or so a few weeks before the wedding with the bride and that conversation lays the groundwork for our relationship on the wedding day. The planner told me I couldn't do that, and when I arrived on the scene I had no relationship whatsoever with the couple. It was by far the most miserable wedding I have ever shot. I would not willingly go into a situation like that.

    People who want to work on a kickback system don't understand that the door swings both ways. I have never and will never recommend that planner who wanted kickbacks. I recommend other planners all the time, because they do a good job, are a pleasure to work with, and don't get in the way of my doing a good job.

  14. The inherent problem here is that the bridal couple contracts with the planner creating a weird contractural relationships.

    The planner may make incorrect promises about you. The contract that the planner has may be significantly different than yours. It may not have cancellation fees that are different than yours. If there is argument about the work you have NO CONTRACT WITH THE COUPLE. Worse yet any problems the planner may throw the problem back on you....needless to say this can be messy

  15. I don't do weddings or events, so file under FWIW:

    Marking up is normal business. Kickbacks, if presented as a 'bribe' in advance, in order to get an opportunity to book a client, are a different beast in my book.

    If a client hires a planner or producer, it's the client responisbility to know, ask, or assume if said products & services are being supplied at cost or are being marked up. If the client doesn't or have an understanding with the producer, or if they are clueless as to how basic business works, well - that's not my battle.

    HOWEVER, my preferred mode of doing business, even if it means earning a wee bit less, is that if I have a public price list posted on my web site for certain products or services, I prefer the client always gets billed what I would have charged directly.

    I'm willing to build in a small discount for the designer or peoducer if they're handling all the billing and contratcing on behalf of the client. However, I set my discount rate based on the scope of the job that I'm willing to extend, rather than them setting or telling me any implied kickback requirements.

    This way, the client will never see that their final cost is any different from my published price list. This also eliminates any slight chance that a client will (mistakenly) assume that I was involved with ripping them off, becuase they got charged something higher than my standard published prices.(i.e. vs. a padded invoice from a producer) This way, I know the door that always remains open to a direct relationship with that client in the future won't be tarnished by the one impression guaranteed to slam that door shut on me forever.

    Finally, if a designer or producer doesn't want me to have any direct interaction or pre-spoot planning with the end client, then the contracting producer will be required to indemnify me from any claims from the third party, provided I deliver apporpriate contratced images to the contacting producer / designer.

    Submitted repectfully,

  16. BTW - apologies for the misspellings in the above post. I'm currently recovering from a 40' fall from a cliff, and the combination of wrist cast and meds make typing a PITA.

  17. ... Of course, if a couple hires a planner to handle their wedding the planner should be paid for his/her services. Whether that means through a combination of fees/kickbacks/ and directly out of the bride's checkbook is all up for negotiation. Maybe a planner can charge less for quality work, maybe it's not all fat off the hog, just a creative way of getting from A to B. We all like flexibility and convenience -- both cost more money compared to basic service.
    For a vendor to declare legal, mutually-agreed upon terms between consenting adults as unethical or sleazy is pretty far out there. If the couple does not want to be bothered by even thinking about vendor issues than they will pay for that service and place a great deal of trust on the planner's shoulders. To delegate the duty is a carefully considered course of action. We all know if you want a job done right you have to ... anything else is taking a chance you will be let down by something out of your control. So even if the planner takes 50 percent of the photography fee, if the photos aren't what's expected, or better, it's on the planner and the couple. So the planner better make sure the photos are right, regardless of the money deal, or they won't work as wedding planners for very long. For a vendor to refuse to work with a planner strictly because it's fee/kickback job that is unethical is ... well, dumb, and might be construed a business decision lacking common sense. leaving good money on the table. And to say you won't do a job because you can't directly communicate with the couple is absolutely arrogant. Have you ever thought they do not want to talk to you? That they know you will make great photos and they will love them. 'Just don't drag us down with those kinds of responsibilities on our wedding day, or before, or after.' The couple probably does not think twice the relationship between planner and vendor. That is the way they like it.

  18. Hi Robert,

    Thanks for your note. I understand where you're coming from.

    Regarding the example I wrote about, please don't misconstrue. I could share the gory details and how it played out?

    But I think the point still holds. Are we in the business of creating a business that stands on its own or not?

  19. Seems to me that if your are a reputable planner you would have several Photographers the Bride and Groom could choose from. If the B&G wants the planner to handle EVERYTHING then it would seem like a client vendor relationship between the photographer and Planner. The planner would be responsible for billing and payment to the photographer as they would with any vendor. Which The B&G would be fully aware of in the contract they signed. If the B&G want to handle their own Photography, the planner should offer direct contact to her most trusted Photographers not expecting any thing except the same from the photographer, when a B&G ask if he knows of any Planners. This is good business. Now my question would be. Would the photographer only charge for the services and not the prints? This would seem logical because that is where he would make his real money anyway.

  20. Actually its no far different whether its US, Canada or even Asia. Vendors, from photographers to hotel stay for honeymooners, usually gave planner a simple 10% commission for referring to clients. However, as a planner myself, we need to be smart in our way of doing business.

    If I decide to work with a vendor who wishes to give the commission, firstly I will tell him that I am selling his services to my client less the 10% since the client has already paid for my planning services. I will also inform the client that they will get a discount of 10% off the publish rate, as I pass this commission as discount to my client. That way I am both transparent to my client and photographer. Client and vendor can contact each other anytime if they wish to, and I do not have to feel guilty of whatsoever about business dealings.

    For destination vendors, I usually will take the vendor commission and in turn return it by giving back to client in a form of bridal bouquet, or even use part of the money to pay transfer fees from bank. That way neither client or the planner has to be pay bank transfer fees to the vendor who is based overseas. This information will also be shared with the client so that they understand that that there is no hidden costs when dealing with the planner and the vendor.

  21. This is a sticky subject indeed! I am a wedding planner/event producer, and a member of ABC (Association of Bridal Consultants). ABC harshly frowns on planners accepting "kickbacks". Part of our job is to save the couple money, which means any discount or "kickback" we get should be passed on to them.

    I do receive discounts from many vendors, in turn for recommending them to my clients - but I pass that discount on to the couple, it doesn't go into my pocket. For example, a DJ I work with regularly charges $795 for his basic package, but if I call him my price is $595. I don't pocket the $200, my couple just gets a better deal than the couple who isn't using a planner.

    My personal practice is that I charge a flat package fee to my clients (brides & grooms) for my services. I do have vendors that I regularly recommend, and that is for several reasons...the two main reasons being (1) that I've worked with them and know they do good work, (2) they offer discounts for my clients because I have a good working relationship with them and refer them regular business. Don't get me wrong...I won't recommend a mediocre photographer because he offers a $50 discount. I take all aspects into consideration.

    I noticed someone earlier said that they refuse to work with brides & grooms who have planners because planners are control freaks who want to run the whole event. If you've worked with planners this way, then you're not working with the cream of the crop.

    Personally, I only take the reins on the details the bride & groom specifically ask me (pay me) to. If they're nervous that their photographer is not going to perform the way they should, then my main focus of the day is the photographer. If they're nervous about the correct music being played at the correct times, then my main focus is the musicians/DJ. We're hired to make sure every details is impeccable -- which might be why we come across as "control freaks". It's our job.

  22. Here's the model we use when representing talent; we quote the client the act's published retail price and we negotiate a wholesale price with the talent.
    This way, the client is not being overcharged and the artist is paying for his or her marketing.
    We also do the same with other event service providers - we ask them to bid on the job with a net pay figure. We let the vendors know they are in a competitive bid - they can pass or place a bid that includes our finder's fee.
    We fully disclose our pricing with the vendor and the client.

  23. I think there are several issues here, the first and foremost being transparency.

    I have worked with MANY wedding planners (I run an online magazine for destination weddings in Europe) and this is an issue that comes up time and again.

    The way I see it, wedding planners have two choices:

    1 - charge the couple a fee for their services.
    2 - charge the vendors a fee to be used at weddings they plan.

    I amn't a fan of the kickback model as it doesn't allow couples to select their own vendors, or even commmunicate directly with them.

    Plus, perhaps I am an idealist, but I believe there is a lot to be said for honest referrals, recommendations and networking. If a wedding planner has some great contacts who she works well with, they surely she is worth her fee to the couple?

    Just my two cents. Luckily I don't have to get directly involved. 🙂

  24. I congratulate you Sean for your ethics and your story. I could not agree more with your article. I am totally against the kick backs or the surcharge you have discussed. I am a full time DJ/Entertainer who provides his services for weddings. I have not come across this situation in our market yet, but have heard about this going on in other larger cities in Wisconsin.
    Vendors, banquet halls and hotels, in our area are very happy to provide my name free of charge because they know I will help provide an awesome experience for their wedding clients. They don't make me pay them to say that either.
    Thanks for bringing up this subject for discussion.

  25. I agree in that:
    1) I do not want a wedding planner to get between me and the couple as he/she cannot effectively articulate the vision they have about the wedding and what is to be captured and then later displayed.
    2) Charging fees and kickbacks for no real value-add to the transaction is just wrong.

  26. Sean,

    You are absolutely right... and any kickback/ commission/ referral fee/ markup arrangement with any vendor (especially a planner, and ESPECIALLY if the client doesn't know they're being charged more) is totally and unequivocally corrupt and immoral. Thank you for bringing this topic up, I wish more people were like you and had the "stones" to take a stand against this practice.

  27. I have the same experience with guest service organizations in Orlando which forced me to create a page outlining my "referral program"

    I am often asked by "management" companies if I have a referral program, and now hotels are outsourcing the concierge or doing away with a concierge all together. Even parking garages are no longer "managed" by a lot of the hotels.

  28. I was googling "are kickbacks ethical" and came across your blogs. You think you have a problem with kickbacks and surcharges in your industry, it is rampant in the entertainment industry. After reading all your comments to date, I think the ethics to kickbacks and surcharges boils down to, does the end user of the services know that these payments are involved? If not, then it is simply not ethical....if so then it is because they knowingly agreed to the arrangement. However, if all hands were on the table, I think we would all know that a bride and groom would have a hard time with the kickback and surcharge arrangements and would ask a few more how much?

    Personally, I believe that kickbacks really hurt the bride and groom (whether they know about it or not) because they end up gettting an inferior service for what they are paying for. I state this for the following reasons. If a photographer, dj, band, florist gets business by providing a kickback to a wedding planner, then the basis of selecting the service provider is no longer who provides the best service for the client, but who can buy the business. Well, as we all know, in order to compete and influence the wedding planner to decide to go with a different company, there comes along somebody else who gives a bigger kickback and does so because they cannot compete based on their service alone. Before you know it what has happend is that the bride and groom are paying a premium price for what is bound to be inferior services. This is where you are not only doing a disservice to the bride and groom, but to your own industry as well.

  29. I agree completely with Sean's point of view about kickbacks being unethical. In India we dont have wedding planners, etc. But I found this post relevant to doctors in India. Among doctors, there is now an unhealthy trend of family Physicians taking a commission from specialist doctors for referring patients. This is commonly called 'cut-practice'. I think this is completely unethical and unacceptable for the same reasons that Sean has mentioned in his post. Doctors can read and learn.

  30. Isn't there a value to getting work? If these people didn't hire a planner to find you - you might never be found. The way I see it, you should be lucky whenever anyone passes you work and expect to give them something for it in return...

  31. As a Wedding Planner who just received 2 invoices from a vendor for a wedding, one the "real amount due" and one "the one to give the clients" (the second one being 15% more), I'm shocked that people can find this acceptable and ethically OK. The bottom line should be that as long as you make decisions based on your clients’ best interest, not yours, you’re in the clear on the ethics. Wedding Planners usually charge their clients a fee (as opposed to Real Estate Agents, for example, who work on commission, and there are problems with that model too) and a big part of the job is to get the best price for their clients, so they can get the most out of their budget. If you are charging your fee based on a percentage of the total budget, and you are artificially increasing the budget by taking kickbacks, then you are stealing from the client twice, taking 10% more kickback in essence.

    I am often offered an 'industry discount' from vendors, and I equate that with a loyalty program offered by airlines or retailers. They understand that if they provide an excellent product for a competitive price, I will bring more business their way, and they will end up making more money in the long run. I am pleased to pass along the savings to my clients, but cost overall is only one factor in which companies I recommend, discounted or not.

    If a Wedding Planner, Financial Planner, Interior Designer or other contractor misleads the client as to how much the product costs, and pockets the difference, that is embezzlement.

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