Is Giving a Gift Card Just Being Lazy?

 

A very interesting result comes from research conducted by the Journal of Experimental Social Psychology on the relationship between gift pricing and appreciate.  When researchers asked people to recall a gift they gave and then to rate how much they thought recipients liked it, higher prices went with higher ratings. But when people made the same ratings for a gift they had received, price was completely unrelated to enjoyment. 

It seems that function counts. Gifts that are actually usable are far more appreciated than those that aren’t.   Gift givers tend to focus on how pleasurable it would be to use the gift but overlook how easily or often the gift will be used.  Givers might favor the beautiful and dramatic because they think about gifts in the abstract.  Recipients, in contrast, imagine themselves using it, and so focus more on utility. 

Delayed gratification is also okay. Recipients don’t mind waiting, especially for a gift that would be more satisfying in the long term. 

 Don’t be afraid to give people what they ask for. Gift givers think that unexpectedness adds value because it shows thoughtfulness; however, recipients actually think it’s more thoughtful to give a gift that they requested. They see it as showing that the giver attended to and honored their wishes.

 Give experiences, not things. Because people are willing to wait, givers should consider research over the last decade showing that experiences lead to more long-lasting satisfaction than new possessions. A family vacation is a better bet than that diamond necklace. But givers are leery of experiences because they worry it’s more likely they’ll pick something the recipient doesn’t want. The answer is simple, give them a choice. 

When giving gifts it’s always best to set aside your own desires and try your best to anticipate what the recipient wants. Using a vast choice of gift cards is an easy way to avoid all of the above.  They truly give the recipient what they want when they want it.

 

Corporate Gifts Remain Popular Rewards

 

For the balance of 2021 and probably into 2022 as well, Incentive Magazine’s Gift Survey reveals that reward planners will continue to offer merchandise in lieu of group travel to motivate performance. According to the Incentive Research Foundation, the use of gifts as a motivational reward skyrocketed by 68 percent in 2020, and that trend is expected to continue. 

There is a lingering uncertainty about the pandemic's effect on travel and some incentive travel programs are still being booked, but many companies have preferred to use gifts instead.

 What are the most common problems when using merchandise gifts?

• merchandise was not always available when needed according to more than 75 percent of respondents 
• more than half of those polled cited frustrating reward delivery delays to recipients.

 These problems can be expected to continue, as manufacturing delays remain a global issue.

 Which gifts are most commonly given?

• 61% of respondents favored using apparel, the vast majority of which was shirts with company identified logos.  Past surveys have indicated that while employees enjoy logoed apparel items, many would prefer a choice of awards
• 59% utilize gift cards or gift card systems that allow the winner to order any of the most popular gift cards in the country, and thus use them to get what they really want, not what someone thinks they want.
• 51% use electronics and food-and-beverage items were used by 44 %.
• Luggage and leather items, sporting goods, outdoor equipment and watches were among other prizes preferred by more than 20 percent of respondents.

 How are rewards being used?

• More than two-thirds of incentive professionals use rewards to recognize employees.
• 55% give awards to thank employees for their performance
• 50% use rewards to thank loyal customers
• 50% use them to build morale and increase job satisfaction
• 43% use them as award to motivate increased sales.

 It is always difficult to pick just the right award, and some would suggest that it can’t be done.  There are too many variables and too much diversity of recipients to get it right.  Many planners voiced frustration about the dearth of new gift ideas.  When you offer a gift each year, it's hard to come up with something new!

 One planner summed up why gifts make great rewards. "Choosing the right gift leaves long-lasting positive impressions and memories — and it generates great PR buzz long after it's given!"

While that is as true as true can be, no one can really tell you how to choose that right gift that leaves all those long-lasting memories.  There is a lot of justification to have a system where the recipients can choose for themselves.

Gift Cards Can be Used to Achieve Various Corporate Objectives.

 

Gift cards are used to attain many corporate objectives According to ongoing research done by the Incentive Research Foundation, following is a list of the main reasons given by companies using gift cards

 

Primary Objectives for Using Gift Cards	Ave. % of Responses
Recognize individual or team performance	75.5%
Boost morale	57.9%
Increase or maintain sales	46.4%
Build employee loyalty/trust	35.7%
Build customer loyalty/trust	32.9%
Improve customer service	31.4%
Foster teamwork	25.7%
Improve safety/reduce accidents	25.4%
Start/maintain business relationships	15.7%
Improve employee health/reduce insurance costs	14.5%
Create new markets	11.4%
Other	3.6%

 

 

If you want a truly successful recognition or incentive program, be award neutral in your decision of what awards to use in your program.  When you provide the awards that your people want, they work harder to achieve your objectives in order to attain them.

Are Gift Cards Used in Recognition Programs More Effective than Traditional Merchandise Awards?

 

In the fall of 2009, Incentive Magazine compared the effectiveness of gift cards to traditional merchandise awards in employee recognition programs.  Following are the results of that study. 

 

How Effective Are Gift Cards Compared to Merchandise	% of Responses
More effective than merchandise	64.7%
Equally as effective as merchandise	24.5%
Less effective than merchandise	2.2%
Do not use merchandise awards	8.6%

 

The Incentive Research Foundation has conducted this study every year since 2009, and the results have been very similar.  In fact, the data has been within +/- 5% of the original research.  This is not surprising to those of us who implement gift cards award systems in companies.  Gift cards have grown to be the single largest employee award in the industry.

 And the reasons remain the same: 

• Gift Cards aree easy to administer
• Gift Cards give your employees the award they want not the one you think they want.
• With Gift Cards virtually all of your recognition budget gets into the hand of your employees, where it belongs.

 

 

 

 

Gift cards are more effective than traditional merchandise awards for two simple reasons:  they provide the greatest choice at the greatest value to both the client and the award winner.  Nothing else even comes close.  Read more about why gift cards are the #1 incentive award.

 

 

 

 

The 2021 Incentive Research Foundation Trends Report

 

The recently released 2021 Incentive Research Foundation Trends Report explores how incentive and recognition programs will need to be reimagined to motivate a changing workforce, accelerate recovery, and meet the evolving goals of post-pandemic companies.”

The top trends for incentive, reward, and recognition programs in 2021 include:

Increase in Individual Rewards: In 2020, incentives professionals had a unique opportunity to re-examine the value of individual rewards. Merchandise, points, gift cards, and individual travel rewards proved to be powerful motivators and this trend will continue into 2021.

Large Group Events Deferred – But Still a Priority: Organizations continue to value incentive travel award programs, and many are committed to resuming large group events, despite a series of delays in 2020 and into 2021.

Moving the Middle: Merchandise and gift cards proved to be effective motivators to broader audiences during the pandemic. Looking ahead, smaller reward amounts can be used to “move the middle” 60% of producers and raise the overall performance of the organization.

Personalization & Choice Increase Impact of Reward: Program owners are developing innovative ways to include personalization throughout their programs in order to make a lasting impression on program participants. Increased reward choice, curated selection, and rewards that align with the organization’s culture have maximum impact.

Contracting & Contingency Planning Are More Important Than Ever: The need for planning for disruptions took top priority as a result of the COVID-19 pandemic. Whether designing a large-scale incentive travel program or a local experiential reward, contracts need to be carefully reviewed and contingency plans expanded to anticipate new and evolving disruptions.

Digital Delivery & Virtual Engagement: Many segments of workforce accelerated the move to working virtually during the pandemic, and many people will likely continue to work remotely in 2021 and beyond. Many lessons were learned about the power of virtual engagement and digital delivery of rewards – and their limitations. Incorporating these lessons into communications strategies can help drive program adoption and success.

 

Gift Cards Are Fun Money

 

The 2020 IRF Academic Review offers some interesting peer review research of articles found within the employee engagement industry regarding employee incentives and recognition programs.  Some of the significant points this year that could help inform you on the design and execution of successful programs include: 

• Gift cards have the potential to capture most – and perhaps all – of the well-known benefits of non-cash rewards. Program awardees categorize gift card awards as “fun money.” Many employers find gift cards easy to give and to administer compared to choosing specific tangible gifts or rewards. 
• The greater sense an employee has that a reward they receive is separate from their salary or wages, the greater improvement they showed in their performance. 
• Researchers found that workers classify non-cash, tangible rewards as distinct from monetary compensation, suggesting that delivering non-cash rewards is more likely than cash to result in improved performance.
• Gift cards continue to be widely used as awards, with median gift card amount remaining at $100 
• For many employees, it has become the soft rewards of work such as culture, relationships, trust, and purpose, education and direct management that matter most to them. 
• 94% of executives at top performing firms are strong supporters of incentive programs and consider them a competitive advantage 
• Companies conducting analysis on how programs change behavior increased to 44%, compared to 25% in 2019. 
• While it’s always difficult to establish direct casualty, most organizations measure results based on correlations. Metrics for tangible benefits include decreased staff turnover, increased productivity, sales, revenue, safety, market share, gains in customer satisfaction, and customer acquisition
• Even more difficult to measure, metrics for intangible benefits that include employee satisfaction, collaboration, and impact on company culture 
• Designers are structuring programs with a wider reach, with the goal of each participant receiving recognition or rewards of some kind, rather than exclusively rewarding just top performing program participants.

Why Gift Cards are More Compelling than Cash as Employee Awards

 

Executive responses to a recent Incentive Federation study on employee incentives showed that merchandise and travel are more compelling than cash as employee awards.  And specifically in the merchandise category gift cards were the most popular awards. 

The reasons most incentive planners feel why gift cards are more effective were listed as:

1. Trophy value: Gift card purchases are more memorable – they create a lasting reminder of achievement.

2. Viral value: Employees tell each other how they redeemed gift cards.

3. More discrete: It’s polite to mention non-cash awards.

4. True gift perception: Gift cards are not viewed as part of compensation.

5. Universal benefits: Gift cards combine the benefits of merchandise with the benefits of cash.

6. Guilt-free spending: Recipients don’t feel guilty treating themselves.

7. More likely to improve work performance: Studies show that cash doesn’t improve work performance – gift cards do.

8. Family support: Because the participant’s family is involved in selecting awards – they’re more likely to support the participant’s goals.

9. Pleasing loved ones: There is a strong motivation to earn an award for one’s significant other

10. Long-term positive feelings toward organization: Gift cards reinforce positive associations with sponsoring organizations.

To review the entire research click here.

Digital Gift Card Usage Rises During the Pandemic

 

With the pandemic disrupting how incentives are delivered to recipients, there has been a significant uptick in companies using digital gift cards as rewards, according to new findings from prepaid technology company NGC. 

In its annual survey of gift card usage in B2B incentive programs, they reported that they were already seeing a heavier shift to digital gift cards in Q2 of 2020 as many brick-and-mortar retailers and restaurants are closed or operating under limited hours. Digital card offerings are out-pacing physical card distribution. At Ultimate Choice we have seen over 80% of our redemption for electronic cards.  It just makes sense for companies to use digital as it the easiest, most cost effective way to recognize performance on the spot.  Awards are often given to a worthy employee who receives it and spends it all within just minutes.  It is the truest definition of immediate reinforcement for positive performance.  It helps to turn those performances in habits that the employees will repeat. 

This has continued a trend that NGC noted last year where digital card redemptions rose from 30% of the total cards redeemed by B2B customers in 2018 to 45% in 2019. It was found that big box retailers (Walmart, Target etc., and the large discount chains of Costco and Sam’s) were the top categories of redemption with 31% of total redemption volume.

Many clients are taking advantage of this trend by using electronic mail merge to issue gift card rewards to home office employees which makes the process very easy with little effort for the client, quick turnaround and instant reward and tremendous choice for the employees.

Having Total Choice is Bad in Reward Selection

Having been in the incentive industry for over forty years, we were always under the belief that if you wanted motivate someone with awards, you needed to give them a wide choice of options to choose from.  The greater the choice, the more successful the program, or so it went. 

Now it appears that a study by Ashley Williams, assistant Professor of Negotiations, Organizations & Markets at Harvard Business School may have a different answer to the question of choice.  She says that the answer to a simple question of…”What would you choose between time and money to determine the best way to design a reward program?”...says a lot about what will motivate you. 

She feels the answer is critical to understanding in general how to engage anyone in business or life…as well as how to select rewards.  She recently completed her dissertation for a Doctorate degree in Social Psychology entitled “Exchanging Cents for Seconds: The Happiness Benefits of Choosing Time Over Money.” Her research focuses on “understanding how people invest their time and money to promote health, well-being and happiness.” The choice between time and money, she asserts, helps predict how people will spend money to maximize their own sense of well-being and in this spectrum helps determine the right types of awards to use for incentive programs.

After studies with thousands of thousands of people representing almost all demographic groups, her takeaways are that…

“People who have a general orientation in their lives focusing on time over money generally experience greater happiness, greater social connections and greater meaning in life.”

Knowing whether people value time or money will help determine how they respond to your organization’s offers to them in terms of incentives, recognition, rewards, and promotions or, for employees, scheduling changes, career advancement or more.”

According to Whillans companies should limit choice of awards because people will make suboptimal choices, and the program will not have the impact for which it was designed. While we can certainly understand why you would want to know if an employee valued time over money we look forward to more conclusive evidence that less choice within the two main alternatives has the negative impact mentioned. 

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

Holiday Shopping and Recognition Awards

What does holiday shopping have to do with recognition awards?  It is the best time of the year to prove to recognition specialists that giving your employees a choice of any award they want it is a key to the success of your program. 

This holiday season sales are expected to be in excess of $655 billion.  Online Black Friday sales alone exceeded $3 billion!  So what did they buy and where did they buy it? You name it, anywhere and everywhere.  Certainly the national bricks and mortar retailers and their websites got the lion share of the sales, but many regional retailers had millions in sales as well.  In addition the online-only companies achieved huge sales as well, the foremost being Amazon.

Our point, when you plan an incentive program, it is virtually impossible to pick the handful of retailers or merchandise items that will appeal to your entire workforce, so why try.

Almost all incentive studies have shown that gift cards are the most popular and effective options within the safety incentive category. Over 80% of respondents to Incentive Magazine’s “Gift Card IQ” survey are currently using gift cards in their reward programs.

Some gift card suppliers would like YOU to choose which gift cards to offer in your incentive programs and will recommend what gift card brands would be most effective based on the unique composition of your employee base. That may be one way to do it, we however think you should give that option to your employees and let them choose the one they want.

As mentioned, it is virtually impossible to pick the handful of card brands that will appeal to all your employees.  Use a gift card system that will allow them to choose from a much larger list of brands that comprises over 95% of all retail sales.  Then you will have an incentive with far greater motivational appeal.

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

Compare Open & Closed Loop Recognition & Reward Cards

Companies purchasing gift cards for recognition, loyalty, and goal achievement often debate the advantages of purchasing and awarding open loop cards vs. closed loop gift cards.

Open loop payment cards are prepaid cards carrying the MasterCard, American Express, Discover, or Visa logo. These cards may be used like cash wherever credit cards are accepted.

Closed loop payment cards are those limited to a specific vendor and can only be spent at the merchant listed on the card.  Starbucks and Amazon gift cards, for example, are “closed” because they are only accepted at those specific merchants. 

At first glance, it appears that open loop cards are the best solution as they offer the widest range of purchasing options.  But before you make that decision, consider these open loop attributes:

n  Often impose a per card fee above the face value – can be as much as $5.95 per card;

n  Often expire and/or decline in value after 6 or 12 months if full balance is not used;

n  Often impose fees when the card is swiped, when you check your balance via customer service, and other situations included in the “fine print” on the card;

n  Often result in a decline at the merchant location if cardholder does not know the exact balance and the merchant cannot tell the cardholder how much remains on the card;

n  Can be confusing at checkout if the cardholder wants to use an additional method of payment for any outstanding balance on his/her purchase (i.e. a “split tender” transaction).

Closed loop merchant cards, while restricting the cardholder to a speciic merchant, have no declining values and rarely impose expiration dates.  In addition, the merchant can "read" the card and tell the cardholder the exact balance that remains.  The user experience is usually much smoother with closed loop cards than with open loop.

How about a solution that offers the best of both worlds? Award of Choice gives each recipient the open loop flexibility of hundreds of merchants with the ease of closed loop gift card use. One Award of Choice opens the door to over 500 closed loop gift card brands including those that are requested most – WalMart, Target, Amazon, Starbucks, Best Buy, Costco, etc.  With no fees, no expirations, and no minimums, Award of Choice combines the best of closed loop and open loop cards -- offering hundreds of merchant choices, favorable economics, and a great user experience.

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

"Let Me Have the Gift Card I Want!"

In employee interview after employee interview we constantly hear the complaint that their company just doesn’t listen to them and rarely gives them rewards that appeal to their own lifestyle.

Thousands of companies purchase and issue gift cards to their employees but it is exceedingly rare for a company to purchase and inventory a multitude of the most favorable gift cards in order to give their employees a choice.  It’s just not feasible to spend company budgets on dozens of different gift cards that sit a drawer waiting for the employee to choose it.  It doesn’t even make sense.  It’s also expensive and has the risk of loss.

So the company picks one or two gift to keep around and limits the choice and cost.  Unfortunately that doesn’t do much for the employee, especially if they don’t really like or use the cards the company chose. 

There are several gift card systems that allow an employee to pick the card that best suits their needs, the one that they really want.  One company, Ultimate Choice Inc., sells this system without fees so on a one to one basis the systems can cost you less than doing it yourself, and will provide so much more. 

If they cost the same as buying the gift cards on your own, wouldn’t it just make sense to give the employees the choice?

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

Is Your Reward Salesperson Award Neutral?

It’s become common practice in the incentive industry for award and recognition companies to say that they are award neutral.  This should mean of course that they have no bias toward what award you use in your incentive and recognition programs.  Unfortunately for most of them that is completely untrue!  It’s like the politicians telling us anything they want us to hear; they always spin the story to their bias….always!  Do any of them ever tell you the whole truth?

Anyone selling awards has a bias toward what award they are trying to sell...and it will be the one that provides them with the most income.

When you are trying to determine what recognition award to use, the best position you can be in is finding out what awards your employees really want, not what you think they want, or what an award company tells you they want, or frankly what you want them to have.

The success of award programs is often in direct proportion to the motivation appeal of the award that the participants can earn.  When it’s not what they want, they won’t do much to attain it.

So take the time to choose the right combination of awards.  The success of your program will depend on it. 

Just for the record, we are BIASED…have always been.  We believe that when you give your recipient the choice of which gift card they want, instead of the one you want them to have, you will have a more successful program.

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