Gift cards are the “go to” option for employee incentive programs. Research shows that 37 percent of incentive budgets are spent on gift cards. This is a very big shift considering that 25 years ago gift cards comprised just 1 percent of incentive budgets.
But there’s an even bigger trend bubbling up in the gift-cards-as-incentives space and that’s the growth of e-gift cards, also called “virtual” gift cards. While they comprised just 2 percent of gift card share in 2011*, the explosive growth of smartphones and a workforce increasingly at home in a virtual world is certain to drive that number up. In fact, e-gift card volume is predicted to jump to $11 billion by 2014, according to CEB TowerGroup.**
How prevalent is virtual gifting in the real world? Here’s an indicator: Starbucks now lets you buy coffee for a friend on Twitter. And Target launched virtual gift cards in all of its stores more than three years ago.
Employee incentive program managers are certain to be adding e-gift cards to their programs at some point. But before awarding with e-gift cards, incentive program managers need to take a hard look at their program and their workforce. Then answer these five questions:
- What do we mean by “virtual” or e-gift cards? Typically an e-gift card is the same as a merchant’s plastic card only delivered electronically via email. It can be viewed anywhere email can be viewed, even on a mobile device. Note that not all e-gift cards can be redeemed in all merchant locations so check terms and conditions carefully. Some merchants will require the printed e-gift card and others will manually key the gift card number from the email. Less than 5 percent of major retailers can scan mobile bar codes. Regardless of the form the e-gift card takes, most merchants work hard to make redemption of e-gift cards a seamless experience.
- Who are you rewarding? Have you surveyed your employees to see what they prefer? Generally, Millennials are more likely to appreciate virtual gift cards than Boomers, who may favor the “reality” of plastic. Be sure to have a variety of awards in your incentive catalog.
- How much personalization will each type of card (plastic or virtual) allow? Personalization is probably the most effective way to make a reward memorable and create a positive impression of the giver. Put that plastic card in a box and gift wrap it—nicely. Then present it to the recipient in person. E-gift cards allow for a high degree of personalization; add a logo or photo of your choosing and a personal message.
- Do you want the awarding of the gift card to be a public event? By their nature, virtual gift cards are delivered on a personal device. A plastic gift card can be given in the context of an event or ceremony. Context is as important as form when delivering an award. Tip: if your organization has an enterprise social media platform, the awarding of a virtual gift card can be socialized.
- Where do you buy e-gift cards? You can go to the merchant of choice, of course. Or you can find a gift card or incentive company that aggregates many merchant gift cards. They often have a list of various plastic and e-gift cards you can choose from. Some offer discounts off face value for volume purchases. And some have products that allow you to offer a variety of plastic and e-gift cards so your participants can choose what they want. This makes it easy on you.
The good news is, you have a lot of options. The bad news is…you have a lot of options. But thinking carefully before choosing ensures the gift card option you pick will be the right one.
*Burke, Inc. survey for First Data, 2012**Hospitality Upgrade: Digital Gifting is Trending in the Hospitality Industry