Cycle to Work Scheme is a government salary sacrifice initiative to encourage people to cycle to work.
This is an excellent way for a customer to purchase a bike as you get to pay for your purchase over 12 months or longer and save National Insurance and Income Tax on the payments, saving you 20-50%+ of the price. It's not great for the cycle shop but great for the consumer.
Your employer can do this directly with the store, but many choose to sign up with a scheme provider to do the admin. These voucher providers make their money by charging the retailer a commission, which can be anything from 3% to 15% or more!
Some of these providers claim to genuinely try to help the environment and encourage people to cycle with the added benefits of improved mental health, reduced traffic, and reduced pollution. Most appear to use it to make bucket loads of money from cycle retailers and the UK government and send the massive profits back to their owners in the USA. Some claim to be Social Enterprises and Not For Profit schemes when in fact, they are sending all the proceeds to another company that makes a bucket load of money, but hey ho, that's the natural way to make money these days, not like us eejits in retail!
If you want to know more about the flaws in the scheme, read this and this. I would say that many scheme providers have made like bandits for a long time whilst cycle retailers have struggled to make even a tiny profit; if lucky, we have seen a massive reduction in the number of independent cycle retailers. Over the twenty or so years the scheme has run, the cycle usage statistics don't show any real improvement in cycle commuting either, so possibly not the best value for the UK taxpayer.
Sale Bikes & Promotional Prices - Due to the commission charges these schemes charge us as the retailer, we can only accept the vouchers against most discounted prices if we charge an administration fee to offset the commission fees. This is to prevent us from selling items below the cost price. We have bills to pay, and it's hard enough to survive in the bike industry whilst paying a modest salary to our staff as it is without having to make a loss to provide our customers with a massive discount on their tax bill and making scheme providers huge profits. We are sure customers want a quality product and advice supplied by knowledgeable and honest staff with good aftersales service, and this can only be provided at a cost.
We currently accept vouchers from the following Schemes:
Green Commute Initiative (GCI) - These are super friendly and helpful, and you can phone them and speak to a human being who knows what they are doing. There is no upper limit, as there are with some schemes. This means you can get a higher-quality bike or even an electric one. The bonus is that they charge retailers a very reasonable commission of 5%.
Cyclescheme - Along with Halfords' Cycle2Work, the market leader in a fair way. Their charges are 10%, but they have recently imposed new terms and conditions on retailers that are unbearable for us, so we are stopping accepting them from December 22nd 2023. It is a very profitable business paying its US owner a massive margin from independent cycle retailers and the UK government.
MyBenefitsWorld - A relatively new one to the market with the lowest commission to us but a limit of £1000.
Cycle Solutions - The highest commission scheme we accept and have form for trying to lure customers away after being quoted as they try and supply directly and steal the retailer's customer. Very naughty. Still, they stopped doing it to us after we told them it was illegal.
Bike2Work - Second highest charge to the retailer, but otherwise, OK
Enjoy Benefits - I have not used them a lot but they seem ok. Commission to us is usually 10%, so fairly high.
Vivup/SMEHCI - Appears to be the NHS preferred supplier, so we use it a fair bit. The commission to us is relatively high, but they pay promptly, and we've had no issues with them.
Schemes we do not accept:
CycleScheme - Along with Halfords' Cycle2Work, the market leader by quite a margin. Their charges are 10%, but they have recently imposed new terms and conditions on retailers that are unbearable for us, so we are stopping accepting them from December 22nd 2023. It is a very profitable business paying its US owner a massive margin from independent cycle retailers and the UK government.
Cycle2Work - This is Halfords' scheme, so it's a good choice if you want to source a bike from them. Halfords own Tredz, who do a lot of brands, so you have a fair bit of choice. Halfords charge up to a whopping 15%, so most retailers cannot/will not accept their vouchers, so you can end up being excluded from buying a quality bike from a local independent. Halfords are often not looking at adding more retailers to the scheme as they want to maximise their profit by supplying you with a bike themselves, which is understandable. Because of this, many retailers can't accept the vouchers even if they want to, as Halfords don't often feel the need to sign up another competitor.