The popularity of gift cards has changed the world in a huge variety of ways – some of which you probably wouldn’t expect, especially in the business world.
For example, did you know that gift cards are one of the most popular methods by which executives reward staff members? An Incentive Federation study found that both merchandise and travel rewards were far more popular among staff than cash incentives, and gift cards led the “merchandise” category by a country mile.
In addition, nearly 75% of all respondents to the survey agreed that they could craft a more “compelling” rewards program out of gift cards than they would be able to out of cash-based reward incentives.
Finally, 80% of survey respondents indicated a belief that merchandise and gift card rewards would be remembered longer than cash bonuses – providing a bigger boost to employee morale.
In this article, we’ll take a look at 10 compelling reasons why this is the case – and why employers are opting for gift cards over cash to recognize performance, as sales incentives, and for use as business gifts.
1. Trophy Value
When you’re trying to connect a behavior with a reward, the reward must be tangible. You want the recipient of the reward to enjoy their reward, and to remember how (and why!) they received it.
Gift cards have a trophy value. If an employee is rewarded with a gift card for his or her performance and uses it to purchase an expensive pair of shoes that they otherwise would not have purchased, that’s a tangible reminder of both their performance and their reward for doing well in the company.
Compare this to cash – while extra cash is certainly helpful to employees, it’s almost never used to do something “selfish”. A survey from research firm Wirthlin Worldwide revealed that 29% of all recipients of cash rewards used the money for bills – and a full 18% of all recipients don’t even remember what they used their reward for.
Cash is just cash – it’s not memorable. But a smartly implemented gift card program allows employees to have two trophies – the gift card itself, and whatever products they purchase with it.
2. Employee Purchases Can Go “Viral”
It’s easy – and natural – for employees to get involved in discussions about how they spent their reward. If an employee got a $500 gift card to Best Buy for hitting sales targets and bought a new 4K TV, you bet your bottom dollar that they’re going to talk about it in the breakroom.
It’s fun and interesting to hear about how other people spend their gift card rewards, and knowing that an employee received a gift card drives curiosity in other employees.
A great gift card incentive provides other employees with a healthy way to live vicariously through others – and can motivate them to perform better, in hopes of gaining a gift card of their own.
3. Gift Cards Aren’t Taboo – Unlike Compensation Talk
Talking about compensation is always uncomfortable – no matter who you are. Nobody likes to be seen as under (or over!) valued, and most people are reticent to speak about cash rewards and their overall compensation. It just seems… weird to most people.
One reason could be that compensation is usually invisible. When you receive your biweekly paycheck, it’s delivered straight to your bank account, or as a check to your mailbox. It’s not visible to others – so it may be strange to discuss it. The same idea applies to cash incentives.
Gift cards, on the other hand, are highly socially visible. The amount and value of a gift card is usually clear, and it’s not seen as taboo to discuss it. This ties into our next point.
4. Gift Cards Are Seen As “True Gifts”
Cash incentives, as mentioned previously, are likely to be used for boring, everyday purposes like paying down bills and buying daily essentials. And while that’s perfectly adequate and necessary, it’s not exactly motivating to most people. “Work extra hard! You could pay off an extra $500 on your student debt!” isn’t exactly the message that management wants to send to employees.
Gift cards can only really be used on, well, gifts! They are perceived by workers as “true gifts” – windfalls that are not part of their standard compensation packages.
Cash incentives also run the risk of being seen as part of compensation packages – and if an employee gets a cash incentive one year and fails to do so in the next, they may be unhappy.
Contrast this to the receipt of a gift card – which is seen as a true reward that is above and beyond regular compensation.
5. Flexibility By Combining Merchandise Value With Cash Value
Gift cards combine the best of both worlds – merchandise value and cash value. There is a clear monetary value associated with a gift card, yet it can be spent at will at a specific retailer.
The fact that people can pick their own tangible reward makes a gift card a great choice over simply purchasing merchandise for rewards, and the clear monetary value of the gift card blends the flexibility of cash with the tangibility of merchandise-based rewards.
Tangibility is the final benefit in this category – an employee can even have a custom-tailored gift card made for them, enhancing their feelings of appreciation and goodwill with a specialized card made just for them.
6. Guilt-Free Spending
If you’re a typical “responsible” person, you’re not going to blow 500 bucks at once in a big-box store just because you got it as a cash incentive. You’re probably going to use it to pay down some bills and other important debts – and perhaps reserve a small amount to spend on yourself.
While this is certainly a good mindset, it also doesn’t promote the sort of luxury, gift-based incentive that most companies are looking for. Gift cards mitigate this problem entirely. They can’t be spent on “everyday” things – employees will feel no guilt about treating themselves.
Because of this, gift cards are extremely valuable. Employees will purchase luxury items or other specialty gifts for themselves that they will enjoy for years to come – without the guilt that sometimes comes along with spending “irresponsibly”.
7. Gift Cards Improve Work Performance – Unlike Cash
Since cash is often seen as part of a standard compensation plan, it doesn’t have a strong motivational factor. In fact, the aforementioned Wirthlin Worldwide study indicated that out of the 17% of American employees who received a cash-based year end bonus, 32% admitted that it didn’t make them work harder.
This is not entirely surprising, because cash-based performance incentives often are seen as “built-in” to compensation plans. Employees who receive them generally plan for them and seek to use them to pay off debts – not to buy themselves, gifts.
Because cash-based performance incentives are seen as everyday and expected, they don’t have strong motivational potential – unlike gift cards, which provide a real, tangible way to get a money-based reward that can be used only on merchandise.
8. Better Family Support
A healthy, supportive family environment is crucial to motivating employees – and can often be elusive in today’s hyper-competitive workplace.
This point ties in somewhat to our above point – cash-based rewards are seen as expected if given in the workplace, so family members are going to be less understanding of employees who have to work long hours to earn them.
In addition, the intangibility of the cash-based compensation makes it unclear what, exactly, said employee is working for. Just another paycheck? Was that worth missing Jimmy’s soccer game?
However, a gift card offers a clear path towards a reward that can benefit an entire family – and if the family of an employee understands that, they’re more likely to offer support while that employee earns their way to the reward.
After all, a gift card can often be used for everyone in the family. If an employee with a wife and two kids gets a high-value gift card, they can all go to the mall or the store together, and go on a shopping spree. In this case, not only do they get the experience of shopping together and being rewarded as a family, they receive luxury items that they may not otherwise have purchased.
9. Easier To Please Loved Ones
Even if your employees are totally unselfish, they still love the opportunity to give a gift to somebody else – usually a loved one. And it’s these unselfish employees who often have the hardest time doing so with a cash-based rewards plan, because they’re likely to use the money on daily necessities.
But think about it: isn’t there a difference between an employee missing Jimmy’s soccer game to earn cash, and missing Jimmy’s soccer game so he can buy him a new gaming console for his birthday?
Necessities are necessary – but luxuries are what make our lives fun and exciting. Even if your employees would never dream of spending a gift card on themselves, they’ll likely relish the opportunity to be the “hero”, and buy a loved one something that they really want.
10. Positive Feelings With Organization Reinforced
If we’ve said it once, we’ve said it a million times – cash doesn’t provide any special “warm and fuzzy” feelings toward your organization, because employees expect cash as part of their compensation.
What will make an employee feel better about their position with your company? Thinking about the $300 of their incentive pay that they spent on car repairs, or looking at the new computer that they bought with a gift card?
The fact is that most things we spend cash on in our daily lives are totally intangible – car payments, insurance, student debt, utility bills, and so on.
Gift cards offer companies, a way to move beyond these intangibilities, and to provide a tangible, long-lasting gift that employees will think fondly of for years.
For example – maybe Marcia is an accountant who did an exceptional job last year, and your company gave her a gift card to her favorite store – Bed, Bath, & Beyond. She used it to buy a Kitchenaid stand mixer – a luxury she would never have bought otherwise.
Every time she looks at that mixer (which will likely last for the better part of 2 decades) she’ll think of the gift that was provided to her by her company, and it will make her feel good. This provides lasting motivation in the form of a tangible, physical reward, and can also enhance the feelings of goodwill that employees have to your company.
Got Gift Cards You Don’t Need? Sell Them Now At EJ Gift Cards!
One of the best benefits of gift cards as incentives in the modern world is that, if desired, employees can always sell them if they don’t need them. While that may not be ideal, it’s certainly a benefit – if an employee truly needs cash, they can get it by selling their gift cards online.
If you’re looking to sell some unwanted gift cards online – whether you got them for Christmas or as an incentive reward – check out EJ Gift Cards today.
We’re a leader in the world of online direct gift card buying services, and we accept hundreds of gift cards from entertainment centers, restaurants, retailers, and more. Our step-by-step process makes it incredibly simple to sell your gift card. Simply enter the gift card information, get a (reversible!) quote, and if you like your offer, accept it and enter your payment details.
As soon as we process the validity of your card, we’ll issue payment over PayPal. No muss, no fuss, no waiting for a check in the mail. We make things easy for you so that you can sell unwanted gift cards, get paid, and move on with your life.
And if you ever have any issues with our service, our customer service support crew can help you out. So don’t trust just anyone with your gift cards – trust EJ Gift Cards to provide you with an all-in-one gift card buying solution that pays fast, is easy to use, and is 100% reliable.