Benefits with staying power

Paul Nolan

When it comes to the benefits of using gift cards in employee incentive and recognition or consumer loyalty programs, some things don’t change—and you wouldn’t want them to. This list of reasons why gift cards are more effective rewards than cash, spelled out by the Incentive Gift Card Council, remains as pertinent and important today as it was when it was first published nearly a decade ago.

Trophy value – Gift card purchases create a lasting reminder of achievement. Studies show that staying power is one of the prime reasons non-cash rewards are more effective than cash. It is this staying power that ensures that physical rewards purchased with a gift card motivate individuals far better than a check. There’s the argument that some employees need the cash much more than they need merchandise. But it’s important to remember that a reward, by its very nature, isn’t compensation – rather its purpose is to serve as a lasting thank you.

Viral value – The employer or incentive manager benefits when the recipient’s excitement extends to the lunchroom. Employees will share with their colleagues how they used a gift card, but would not talk about receiving or spending a cash reward (often, because cash rewards are simply used to pay bills).

True gift perception – As research has demonstrated repeatedly, cash rewards don’t motivate extra effort. Why? Because when companies try to motivate their employees and/or their distribution partners using additional cash, the reward is typically thought of as compensation and is spent on necessities.

Guilt-free spending – Many non-cash incentive awards are viewed as luxuries that participants normally cannot justify purchasing for themselves or family members. In the case of a gift card, the recipient can use it guilt free for something personal.

Family involvement – Because the participant’s family is involved in selecting awards — they’re more likely to support the participant’s goals. A supportive home environment is important for success. When people are working toward earning a reward at work, family members quickly get onboard. One of the reasons is the prospect of being able to benefit.

Employee loyalty – Dennis Borst of Patriot Marketing Group tells the story of a single mother who works at the Los Angeles Times who received enough Foot Locker gift cards in a company-sponsored ride share program to purchase her three children high-end basketball shoes for Christmas, something she couldn’t afford herself. How do you think she feels about her company making her a Christmas hero with her children?