As companies grapple with their roles in contributing to racial equality and inequality, diversity and inclusion programs have taken on more importance in the corporate world.
But in retail, one well-regarded bicycle brand led by an industry legend is innovating a more direct approach to address racial inequality: reparations in the form of a 45% discount for Black customers.
Rivendell Bicycle Works, based in Walnut Creek, Calif., is offering the discount not because they are “a nice thing to do, but because they’re owed,” Grant Petersen, Rivendell’s president and founder, wrote in a post explaining the new policy.
The company had been informally “dabbling” with this policy since July 2018 for walk-in customers and has sold three bikes and a few accessories at the discount. But amid this year’s racial justice movement and COVID-19 limiting walk-in customers — Rivendell is sold across the country but also maintains a brick-and-mortar presence at its HQ— the company moved to make it official and will kick off the program Oct. 12.
The company is allocating 10% of its bikes for the discount and will not raise prices on other bikes to pay for the program.
The move is meant to acknowledge that significant amounts of wealth in the country has come at the expense of the labor of Black people, a group that specifically has been disadvantaged more than others from slavery, Jim Crow laws, mortgage discrimination, and other forms of financial discrimination.
Bracing for controversy
Petersen said he hadn’t seen any other businesses do something like this previously — nor has Tom Meyvis, a professor of marketing at NYU Stern School of Business who studies marketing and consumer behavior.
Meyvis said exclusivity of discounts often makes customers cry “unfair,” though consumers often find it acceptable to provide discounts to certain groups “who have an obvious need or limited resources (e.g., lower income, kids, elderly) or who they may feel earned the discount through their sacrifice (e.g., military or nurses during a pandemic).”
“Whether ethnicity-based discounts framed as reparations fall into this category is unclear to me,” Meyvis said.
Petersen and Rivendell anticipate blowback and have taken great pains to explain their position.
“Your non-Black tycoon great-grampa may have been born poor, may have been a sharp and clever go-getter at the top of his class, may have overcome his buck teeth and bad breath, but he wasn’t born Black,” Petersen wrote in the company’s post.
Reparations have taken place in various forms around the world throughout history and they have recently become a growing part of the conversation about race in America, even being considered by states like California and even being approved by the city of Asheville, N.C.
Rivendell said it was urged to include others who have faced discrimination and to base the program on income, but in the interests of simplicity is choosing to keep it based on race. The challenge, of course, is identifying those who qualify.
“This is the most challenging and awkward part of [black reparations pricing],” Petersen wrote. “Within two days of launch, we had a disturbing number of questionable inquiries.”
Petersen told Yahoo Finance that there has been “huge” interest so far — not all of it good.