Spiff

A spiff is a temporary bonus awarded to a salesperson for reaching a specific target, such as selling a designated product or securing a certain number of demonstrations. Businesses utilize these incentives to rapidly sell particular inventory, introduce new products, or achieve short-term sales goals. While often given as a cash bonus, spiffs can also be offered in the form of gift cards, merchandise, or travel rewards.

The term 'spiff' originated in 19th-century England, initially referring to a bonus given to retail clerks for selling outdated or less desirable products. This approach assisted shopkeepers in clearing slow-moving stock while incentivizing their sales personnel. By the early 20th century, spiffs became a widespread practice in both wholesale and retail sectors.

The idea has continued to develop, with a prominent modern instance being Apple's implementation of spiffs in the 1980s to enhance computer sales. This tactic significantly increased their market share and established the spiff as a key element in contemporary sales practices. Today, they are widely used as short-term incentives across various industries.

Spiffs are adaptable tools employed to encourage specific sales actions and meet immediate business goals. Companies strategically implement them to direct sales team efforts and expedite outcomes in critical areas, often beyond the traditional compensation framework.

Although both are types of compensation, spiffs and stipends serve distinctly different functions within a business environment.