A holiday incentive for employees: gift cards

Viewpoints

A holiday incentive for employees: gift cards

Michael Hursta, vice president, Prepaid Solutions, First Data, shares his gift card expertise.

With December fast approaching, companies of all sizes are considering ways in which they can distribute rewards to employees who have particularly excelled throughout the year. As we emerge into a new era of commendation, today’s employees demand fresher alternatives to older incentives.

Having tangible rewards which can be used at the recipient’s discretion is becoming more popular. According to a First Data survey, of more than 2,000 US consumers, gift card popularity is on the rise, with the findings showing they are more valuable than a traditional gift. This is reflected in respondents preferring a $25 gift card compared to a $45 gift. With this in mind, business personnel can leverage prepaid offerings as a means to incentivise good work.

In addition a separate First Data Prepaid Employee Incentive Card study demonstrated that gift cards currently make up 34% of business incentive spending – the highest proportion of spending ownership, with cash and cheques coming in at 27%.  This particular research was designed to examine the spending behaviours of 300 businesses which use prepaid cards as incentives, to learn more about how the corporate gift cards market is currently faring.

The research found that virtually all companies reward employees. The reasons for doing so tend to boil down to employee anniversaries (65%) and sales incentives (67%) for the most part. This is because these initiatives offer up multiple business benefits, including controlling costs and enhancing morale among the workforce via means which allow companies to reward workers with something they want and can use.

Other insights shared from the consumer survey include card preference, with 38% of employees favouring cards from specific retailers while 25% of employees would be happy with multiple retailers according to local accessibility. Often when organisations are unaware of the preferred gift card choice, the best option is to provide the recipient with a general-purpose Network Branded gift card, simply as it offers a lot more flexibility since it can be used virtually anywhere.

While companies have reduced overall employee incentive spending, expenditure on incentives like recognition plaques and merchandise has increased. The holiday season is an ideal opportunity for businesses to explore further incentive schemes – with gift cards hitting the top of employees’ choice reward lists due to their perceived worth. This satisfies both the objective to commend high-value staff in tandem with achieving additional cost savings; all through the higher-value perception of gift card programmes when compared to traditional gift giving.

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