A kickback is an illegal commission paid to someone in exchange for preferential treatment. A kickback favors the individual receiving the commission, usually at the expense of the person's employer. For example, a buyer receives kickbacks from a supplier in exchange for being issued a purchase order in preference over other suppliers whose goods or services may be of lower price or higher quality. In this case, the employer of the buyer suffers from the kickback arrangement, since it must then pay more for purchases or deal with lower-quality goods or services.
Kickbacks are especially common in locations where staff are poorly paid, and especially where the culture has a permissive attitude towards corruption. Kickbacks may also be solicited within governments, especially where pay levels are low and a government has significant amounts of funds that it can allocate out to suppliers on various contracts. In these countries, it is difficult for a supplier to do business at all without offering kickbacks to the employees of customers.
Kickbacks are difficult to detect, because assets or favors are being transferred to an employee, and so never appear on the books of the affected business.
The Foreign Corrupt Practices Act makes it illegal for an American company to bribe foreign officials.