Make the most of your gift card program

(Excerpted in part with permission from National Gift Card Corp.’s white paper “Getting the Most Out of Your Gift Card Program,” www.ngc-group.com/blog/industry-news/getting-the-most-out-of-your-gift-card-program)

When gift cards are referred to as “the reward of choice,” the description comes with solid research. A study by the Incentive Research Foundation (IRF) and the Incentive Gift Card Council (IGCC) found that U.S. businesses spent $22.7 billion on cards for employee incentive and customer loyalty programs. While more than 59% of businesses rely on non-cash rewards, a full 87% of those companies are using gift cards. 

Data from the company's perspective includes: 

• 60% of companies using gift cards favor them for ease of administration
• 59% cite broad audience appeal, 52% for redemption and flexibility
• 48% appreciate a gift card’s perceived value over cash rewards
• More than 75% of gift card program owners believe they “are among the most effective of all rewards – especially in driving loyalty and engagement.” 

Data from the recipient's perspective includes: 

• The largest share of respondents – 44% – say gift cards, not cash, are their favorite award type
• They appreciate the redemption flexibility gift cards offer: the ability to redeem them in a brick-and-mortar store, at an online retail site, or via a phone order.
• Recipients find gift cards have greater and longer-lasting impact than cash rewards
• More than 79% of the study said they remembered what they purchased with their card
• More than 79% linked that positive memory of the gift back to the people or company that awarded it.

Electronic gift cards are increasingly popular. Through codes delivered via e-mail and mobile devices, they allow for immediate rewards, offer a variety of redemption choices for issuers as well as recipients, and are an environmentally friendly way to deliver awards.

Purchasing gift cards

Sending employees to purchase gift cards at retail locations or “card malls,” while appearing on the surface to be an easy purchase decision, can actually cost a company more than it may realize.  In addition to travel time while it takes only a minute or two to activate a single gift card at a retailer’s point of sale (POS) terminal, the task multiplicity of activating and verifying a large quantity of cards (not to mention dealing with various denominations within the purchase) takes much longer, and could be prone to error.

The grossed up average hourly wage of the above, amortized over the volume of the cards purchased can be substantial.  It can easily amount to over 10% of the purchase.  Other cost considerations would be lost time productivity, actual travel costs, and in particular safety and security concerns.  

Consider using a third party B2B gift card provider to do your gift card sourcing. According to Sales and Marketing Management Magazine (July, 2013), “you get client support, fulfillment services, budget control, cardholder support, and more.” By using an outside source

Most card providers perform this service for fees added to the face amount of the cards purchased.  Ultimate Choice provides this service without fees.  

Choosing a card or cards

You can find almost any gift card imaginable.  So what gift cards should you use?  Do you want to offer just one or two cards, or more?  How many different cards should you offer?  Many companies avoid the entire issue by using an open looped bank card that can be used to make purchases anywhere the card is accepted.  But these cards will have fees as high as 10% of the value especially for lower denominations, and are very difficult to use when combining them with other forms of payment…an occurrence that happens more often than expected. 

In our experience the best motivation for your employees will come when you offer them any card that they want.  If you want them to perform, let them have what they want, instead of what you want them to have.  Using a B2B card provider will do just that.  There are many to choose from.  In your selection process, please include Ultimate Choice, we think we offer the best solution at the absolute best price. 

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net