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Research: Gift Cards Better Than Cash for Employee Wellness

Study out of Brigham Young University supports the value of non-cash incentives.

When it comes to promoting healthy behaviors in workers, managers should keep their cash and reach for gift cards. That was the finding of a new paper from a team of researchers at Brigham Young University, who found that gift cards were far more likely to inspire participants in a workplace wellness program to successfully complete their challenges. 

Published online at Management Accounting Research, the study was conducted by BYU researchers Bill Heninger, Steve Smith and David Wood. It tracked an institution that rewarded workers who completed a six-week wellness challenge, giving participants a choice between a cash bonus on their paycheck, a gift card or a material reward of the same value. Approximately 60 percent of participants selected cash, 30 percent chose gift cards and 10 percent selected the tangible reward.

While cash was the most popular choice, the most effective choice turned out to be gift cards. According to the findings, those who selected gift cards were approximately 25 percent more likely to complete the challenge than the participants selecting other rewards, taking into account all other factors.

"You would presume that when people pick the reward type that is the most appealing to them, it would have the most motivational power," Smith said in a statement. "But that wasn't the case. Employees choosing to be rewarded with gift cards actually reaped the greatest health benefits. So the way you are choosing to incentivize yourself may not hold the strongest motivational power."

The findings adds more evidence to the assertions long held by leaders of the incentive industry that gift cards are a more effective incentive than cash. The authors suggest that the gift cards might have proved more effective because they strike a balance between flexible and specific when it comes to entertainment or fun. 

"People keep mental accounts," Wood explained. "If you work and make $10, that's your work money. If you find 10 bucks on the ground, then that's free money. You might go out to lunch with the free money, when you normally wouldn't with your work money."