Using Gift Cards asEmployee Incentives

Gift cards increasingly are becoming more convenient and personalized. The fifth annual National Retail Federation (NRF) Gift Card Survey, conducted by BIGresearch, found that to no one's surprise, people love gift cards. Gift card sales totaled in the $26.3 billion range in the 2007 holiday season, compared to $24.8 billion in 2006.

This bodes well for the Incentive Gift Card Council (IGCC), a strategic industry group within the Incentive Marketing Association. IGCC educates the incentive marketplace and the corporate community on the benefits of gift cards, including choice, value and service. Generally, what is popular for the average consumer is popular with employees, who appreciate the flexibility provided by gift cards that are distributed as part of an incentive or recognition program.

“It is no secret why gift cards are the most popular item on consumers' shopping lists,” said NRF President and CEO Tracy Mullin. Tight financial times often cause employees to pull back on personal discretionary spending, but they “are hoping to receive a gift card so they can purchase something they may have had their eye on for months.”

Top Ten Tips

Shoppers, or, in this case, employers, need to be smart when buying and giving gift cards.

Here are some tips and important facts about gift cards:

Be aware of individual retailers' policies regarding expiration dates before purchasing gift cards.
To ensure that a recipient receives the card's full value, shoppers should only buy gift cards from reputable retailers (not online auction sites). Additionally, consumers should keep their original receipt with the value of the card they purchased in case there are any problems with the card when it is redeemed.
There are big differences between store-issued and bank-issued gift cards. While 92 percent of the leading retailers have no fees associated with gift cards, card issuers such as VISA and MasterCard are more likely to add on additional fees for activation, maintenance, inactivity and transactions.
Retailers do not count a gift card as a sale when it is purchased. Instead, they wait until the gift card is redeemed and merchandise is exchanged.
Encourage spending gift cards before the government takes the money away! While the rules may not kick in for a couple of years, many states have laws which allow the state to collect “abandoned property,” which means that if personal property goes unclaimed for a certain period of time, the state has the right to take it into the state treasury. Gift cards that go unused or unredeemed for more than a few years often are treated as “abandoned” property by states.
Due to improved technology, some retailers are able to reissue a lost gift card if consumers have kept the original purchase receipt. Some retailers also encourage gift card recipients to register their card through the store's Web site, which enables them to check their balance online and receive a new card if they lose or misplace the original card.
Many retailers are allowing consumers to design their own gift cards, adding personal messages and photos.
Many stores can carry gift cards at their check-out counters because today's gift cards are not active until scanned. Also, retailers like grocery stores and drug stores carry a variety of different gift cards at their registers – for movie theaters, coffee shops and clothing stores.
Most of today's gift cards differ from traditional gift certificates because they are “stored value” cards. When a consumer spends $25 from a $50 gift card, the card automatically updates the balance.
Save yourself the guesswork and buy gift cards. That way, employees can choose their own rewards.

The IGCC Member Directory is a great resource for the leading merchandise, travel, food, accommodations and services gift card suppliers in the incentive market.