Do Employee Merchandise Awards Cost So Much More than Gift Cards?

 

Actually that’s sort of a trick question; the actual cost of a merchandise item doesn’t cost more than the actual cost of a gift card.  If you spend $50 on one item and $50 on a gift card, you’ve spent the same amount.  Your budget hasn’t changed.  What is definitely true is that the value of a gift card can change appreciably depending on when and where you use it and be worth more than what you paid for it.  In fact, most of the gift cards given over the Holiday season are used to purchase merchandise items on sale after the holiday season…often when the value can be double or even triple depending on the item.

From a recognition planner’s viewpoint, gift cards will have the effect of increasing your budget, where merchandise can actually decrease it.  Merchandise award companies need to start to develop their list or catalogs of merchandise awards long before clients will ever be buying or redeeming for them.  They will maintain pricing for a certain period, but after that period they have been known to raise them to cover increased costs, and thus increasing budgets.  As merchandise awards are also burdened with shipping and handling to the individual, their pricing is already higher by between 10-15%.

Take advantage of natural market downward price pressure during several times of the year.  When you use gift cards it will have the effect of increasing your budget by 50% or more, without increasing your cost.