Tell me if you've heard this one before: Gift cards are the most requested gift in America. Sound familiar? Every year for 12 years and counting, research by the National Retail Federation has confirmed that people overwhelmingly want gift cards more than any other gift option. But in case you hadn't heard, people also love receiving gift cards outside of gifting occasions -- and increasingly prefer them as incentives in a variety of settings that extend beyond birthdays and holidays.
To respond to this growing demand, many U.S. businesses now use non-cash rewards like gift cards to recognize employees, motivate sales partners and satisfy consumers. And, gift cards in particular are thriving as ideal rewards, with today's consumers preferring them two-to-one over other incentives, according to research from CashStar.
What Are Effective Ways That Businesses Leverage Gift Cards as Incentives?
Ditching Company Mugs and Tchotchkes
Employers that are in tune with their employees know that the right rewards go a long way in driving behavior and increasing engagement -- whether you're encouraging employees to achieve work-related goals or participate in wellness programs. Employee reward programs can be morale boosters or busters, and companies should consider employees' diverse preferences to offer rewards that matter. And guess what most people want? Gift cards.
According to research from Blackhawk Network, 69 percent of employees would like to receive a gift card as a reward from an employer. Gift cards can be tailored at an individual level that resonates; for example, employers can offer the choice of physical or digital cards and a plethora of retailer redemption options. Many rewards catalogs offer a stale selection of company swag that employees don't value or want (who really wants another useless tchotchke laying around collecting dust?). But gift cards can keep employees happy and engaged, and help encourage specific behaviors that please employers.
Satiating the Hunger for Sales Rewards
Across sales channels, there's a common underlying premise. If you accomplish "A," you will receive "B" -- with "B" being an attractive reward that hopefully makes sales folks work harder. The Incentive Research Foundation reports that 90 percent of the top performing companies it evaluated in a recent benchmarking study use non-cash rewards and recognition programs to incentivize sales employees and/or channel partners.
Why? Because they work. Gift cards are flexible non-cash rewards that motivate sales teams or partners to boost their sales because they suit a variety of different recipients and situations. At the 2018 RGCA Forum, gift-card industry experts shared research from Mercator Advisory Group that found businesses spent $13 billion in 2016 alone on retail-specific gift cards to use for employee and partner rewards. Whether you're trying to motivate an in-house sales person to meet a certain quota or a third-party partner to sell your product over your competitor's, gift cards are a go-to incentive option that speak to both -- and can be doled out across a spectrum of denominations for both big and small rewards.
Maximizing Promotions and Loyalty
American shoppers love being rewarded-and have come to expect to be rewarded for certain shopping behaviors and their loyalty. Blackhawk research found that 82 percent of consumers would prefer to receive a gift card or prepaid card over other incentive options like discounts, checks or merchandise. Merchants designing marketing promotions can incorporate gift cards as incentives to catch shoppers' attention, successfully drive sales, acquire customers and keep existing customers happy.
Gift cards also are versatile rewards for loyalty. Mordor Intelligence reports that more than 80 percent of U.S. consumers have enrolled in at least one loyalty program in the retail, travel or hospitality sectors. But just because people enroll in a loyalty program doesn't mean they're active in it or that their membership is actually building loyalty and staving off interest in what your competitors are selling. By offering gift cards in loyalty programs, merchants can better engage members by using rewards people actually want -- especially by offering more frequent redemption opportunities to create regular touchpoints. First Data research reveals that 61 percent of customers say they prefer to receive a gift card over a coupon or bonus as a reward for loyalty.
Gift cards as incentive tools have people saying an emphatic "yes, please" across the board. When received as rewards, consumers have an opportunity to use gift cards to treat themselves and will positively associate your brand or company with the experience. According to First Data, 64 percent of consumers buy gift cards just to spend on themselves, so imagine how happy they'll be receiving gift cards as rewards from their employers, sales partners and favorite retailers.
Are you looking to learn more about how your company can better leverage gift cards as incentives? Join top gift-card industry experts at the 2019 Retail Gift Card Association Forum Sept. 30 to Oct. 2 in Phoenix. During the conference, attendees will learn how businesses are integrating gift cards as incentives to achieve their objectives. This valuable information can then be applied within their own company.
Kim Sobasky is communications chair of Retail Gift Card Association, a nonprofit trade organization representing the closed-loop gift-card industry; it works to protect, promote and enhance the use of gift cards.