Frequently Asked Questions
Q: What are the advantages of using gift cards?
A: There are many advantages to using gift cards. They are easy to acquire and easy to use. What better way to reward recipients than with a gift card from a retailer they shop at regularly? Gift cards are non-restrictive, allowing recipients to purchase any of the items that are on sale in-store. This extends the value of this reward.
Q: What makes gift cards different than cash?
A: People who receive cash tend to spend it indiscriminately. They can't remember why, where or how they've spent it. This defeats the motivational impact you're trying to create and reinforce. Cash clouds the difference between compensation and recognition. Employees feel they were entitled to the cash in the first place. So entitlement issues arise because the money is expected. Gift cards are non-monetary and are not a regular method of payment. A company can alter the program objectives and award values at their discretion and, as such, non-cash awards are neither expected nor entitlements. This clearly separates them from cash.
Q: How do gift cards provide trophy value to the recipient?
A: The critical element of the gift cards isn't just its paper or plastic appearance. What it does is open the door to quality products and services employees want to acquire, this lends the reward its trophy value. Another nice advantage of gift cards is that if you want to purchase that big-screen television, you can use your $50 gift card to augment your own money. What you did is earn the opportunity to defray the cost of the luxury item you've always wanted. The company gets recognized for helping you get the television.
Q: Are gift cards impersonal?
A: No, Just like any award, it's all in the way they're presented by the corporation. If you give a traditional point book or any other prize, it can be seen as impersonal unless it's presented properly. The point of any program for the employee is: Is my company paying attention to me? Are they recognizing my effort? Are they rewarding me? The gift card can satisfy all of these points. They have a high perceived value and the card itself can be personalized with the company and recipient's name.
Q: Are there any unusual tax issues involved with gift cards?
A: No. Companies can use whatever tax structures are currently in place for other incentive awards.
Q: What are the current trends involving gift cards?
A: Because of its cost-effective nature, gift cards are being used more and more as a reward for non-sales areas like recognition, safety and suggestion programs. Another quality that makes gift cards attractive is the wider range of retailers now offering gift cards.