Gift Card Use Rises in 2020 Incentive Programs, Says IRF Study

The Incentive Research Foundation report on merchandise and gift cards also points to cautious optimism and slightly larger budgets in 2021. 

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Companies expect to expand their use of merchandise and gift cards to reward, motivate and recognize employees and clients in 2021, according to an Incentive Research Foundation study. The report, titled Industry Outlook for 2021: Merchandise and Gift Cards, queried 322 industry professionals including corporate buyers, direct suppliers of gift cards and merchandise, and third parties (incentive companies and consultants). 

"The good news is that the value of incentives has been established within organizations leading to budgets holding steady in many cases," said IRF president Stephanie Harris. "Incentive programs looked very different in 2020, with many organizations using merchandise or gift cards to keep teams motivated while incentive travel is on hold. As we look toward 2021, the effectiveness of merchandise and gift cards as motivators will continue to be a key to the growth and success of many incentive programs."

 Key findings of the merchandise and gift card research includes:

  • Gift card use increased during the pandemic. More than a third (35 percent) of those polled spent more on gift cards in the past year.
  • Total corporate gift and merchandise spend held steady during the pandemic. A third of respondents increased their merchandise spend, 31 percent spent less, and the balance spent about the same.
  • More than a quarter (27 percent) of incentive travel programs shifted money away from trips to gift cards and merchandise during the pandemic.
  • The business outlook for 2021 is cautiously optimistic: Industry stakeholders have positive expectations for 2021, with 64 percent of those polled expecting their companies to have strong financial performance.
  • Budgets will increase slightly in 2021: Program budgets are expected to increase by a modest 7 percent. Technology will take up the largest (26 percent) portion of the budget, followed by 16 percent allotted to both gift cards and program communications, respectively.