Gift Cards: The Perfect Employee Reward For Your Workforce
Employee reward programs are perhaps the quickest and easiest way to achieve higher employee engagement levels in your organization.
People, undoubtedly, love getting appreciated for the work that they do. It builds motivation and cultivates a sense of loyalty towards the organization.
However, appreciation through a monetary reward system can get real expensive, real quick. It might also be why many small businesses and startups shy away from offering any employee incentives.
But is employee recognition only valid when it's cash-based? Or are there any better alternatives?
According to a study done by the Incentive Research Foundation:
44.07% of employees agree that gift cards are the "best rewards to receive," while 27.12% agree that they are "good rewards to receive.
Academic studies continue to show that non-tangible rewards (such as gift cards) are as effective, if not more, as cash-based incentives. It showed similar spike levels in productivity and happiness among the workforces.
Let's look at why gift cards are an employee reward that should be considered more often for any employee rewards and recognition program.
Benefits of Gift Card Incentives
Gift cards are an incredible option for rewarding your employees. Let’s talk about why they’re such a great option.
1. Flexibility to Choose
Do you know what’s the best thing about gift cards? Your employees get to pick how they want to spend them. They can decide for themselves whether they wish to have a nice meal, go for a shopping spree or a day out.
2. Cost-Effective Rewards
Gift cards can be bought in bulk, and often at a discounted rate. It’s a win-win situation for the one watching your employee rewards budget.
It’s a smart, efficient way to give a meaningful reward without breaking the bank.
3. Convenience at Its Best
The days of tracking down gift cards, handling storage and worrying about shipping are over. Digital gift cards have taken that pain away. Now, gift cards can be delivered instantly via email or text.
No more waiting! Just a quick and easy way to say “Thank you” to your employees.
4. Boosting Morale
A study by Globoforce found that employees who received regular small rewards, in the form of money, points, or thanks, are eight times more engaged
Recent studies have shown that non-tangible rewards like gift cards can be just as effective as cash. Yes, that’s right!
A simple gift card can be a huge morale booster, making your employees feel valued and recognized for their hard work. It’s like a reminder that their efforts make a difference.
5. Cutting Down on Turnover
Gift cards can actually help reduce turnover. But it’s not about gift cards, it’s the act of rewarding and recognizing that your employees appreciate. It’s one of those small gestures that really makes a difference.
6. Good for the Planet
Digital gift cards are not just convenient, they’re also a more eco-friendly option. Without the need for physical production or shipping, they cut down on waste and help make your incentive program a bit greener. It’s a small step that contributes to a more sustainable world.
7. Fair and Inclusive Rewards
Gift cards can easily be incorporated into a point-based system. It allows employees to accumulate rewards and choose exactly what they want.
Now, this gives everyone a fair shot at selecting something meaningful, which can feel more inclusive and empowering. It’s about letting employees take the reins when it comes to their rewards.
8. Perfect for a Global Workforce
If your team is spread out across the globe, gift cards are a great equalizer. With platforms like SOLI, you can reward employees in different regions fairly and equitably. It’s an easy way to make sure your rewards program is inclusive. No matter where your team members are located.
9. A Lasting Reminder of Success
Gift cards often carry a “trophy value.” A token of achievement that employees can hold on to. It serves as a tangible reminder of their hard work and success. Something like this can create a real sense of pride and accomplishment, motivating them to keep performing at their best.
10. Team Spirit
Unlike cash incentives, gifts cards are often more unifying. They give everyone a fair shot at something they’ll enjoy. It’s a small gesture that can really help strengthen workplace cohesion and encourage collaboration.
11. Driving Performance
Here’s the kicker: gift cards can actually encourage employees to perform even better than cash incentives. Yes, you read that right. They’re effective motivators, not just for short-term rewards, but for driving longer-term productivity. So, if you're looking to motivate your team, gift cards might just be the way to go.
Types of Gift Cards
Many organizations that want to incorporate gift cards into their employee rewards system don't know where to start. The first thing you'll need to decide on is whether you'll offer employees a closed-loop or open-loop gift card program.
1. Closed Loop
Closed-loop gift cards only work with one particular store or a brand. For example, a specific restaurant's gift cards can only be redeemable for that specific store or other branches of the store.
2. Open Loop
Open looped gift cards are typically branded with a credit card network such as Visa. Such cards can be redeemed across multiple brands unless specifically restricted.
Closed looped cards significantly reduce the freedom of employees to select their own rewards. On the other hand, open looped cards offer employees the flexibility to use the cards and choose what they want.
According to us, an open-loop system is the way to go to make your employees genuinely feel good about being rewarded.
3. E-Gift Cards
E-gift cards are like the modern-day version of a classic reward. It’s instant, hassle-free, and perfect for a digital world. They’re delivered straight to your employee’s email or phone, so there’s no waiting around or worrying about losing a physical card. Plus, they can be used online or in-store (depending on the retailer).
One of the best things about e-gift cards? They’re fast. Your employees can get rewarded in minutes, which makes the recognition feel immediate and meaningful. And since they’re digital, there’s no clutter or risk of misplacing them. Some even let you add a personalized message or company branding, making the experience feel a little more special.
4. Physical Gift Cards
There’s something about holding a gift card in your hand that just feels more real. Physical gift cards make rewards feel more tangible, which is why many employees still love them. They work just like e-gift cards but come in a traditional, plastic format that employees can carry around and use whenever they’re ready.
Sure, they take a little longer to distribute, but they’re great for in-person recognition moments. It adds a personal touch that digital options can’t quite match.
At the end of the day, both e-gift and physical gift cards have their perks. It really comes down to what works best for your team!
Popular Gift Cards by Category
These are some popular gift card options that you can consider.
How to Choose the Right Gift Cards for Your Employees
Picking the perfect gift card for your team is about making your team members feel valued and appreciated. Here are a few things to keep in mind when choosing the right ones:
1. Know What They Like
Not all of your employees have the same interests. You’ve got to take a moment to think about what they’d enjoy. Are they coffee lovers? Foodies? Fitness enthusiasts?
You’ve got to make some efforts to identify that. Your gift cards will make sense only when they align with your team members’ preferences.
2. Add a Personal Touch
A gift card is great, but pairing it with a simple, handwritten note or a personalized message can make all the difference. Seeing their name and a heartfelt "Thank you!" can turn a simple reward into a meaningful moment.
3. Stay True to Your Company’s Values
If your company promotes wellness, consider gift cards for fitness centers or healthy meal delivery. If you encourage learning and development, maybe a bookstore or online course gift card would be a great fit. Aligning rewards with your company culture makes them even more impactful.
4. Keep Your Budget in Mind
You don’t have to break the bank to make employees feel valued. Choose gift cards that match the level of achievement being rewarded while staying within budget. A well-thought-out $25 card can mean just as much as a $100 one when given with sincerity.
5. Watch Out for Extra Fees
Some gift cards come with activation fees or expiration dates. This is not the kind of “surprise” you want to give your employees. So, always check the fine print before purchasing to avoid any unexpected costs.
4 Benefits Of Having Gift Cards In Your Employee Reward Program
Benefit One: Ability To Choose
Does your reward and recognition program have a set reward that you give out to the top performers?
If you do, you might need to rethink it.
People love getting rewarded, but you want it to be something they actually want and are not forced to accept.
Gift cards empower employees to select the reward of their choosing. Not only is it more feasible to give employees the power to choose their own reward, but it also creates a sense of excitement among them.
Additionally, gift cards can easily and quickly be integrated into a point-tracking program. Reward recipients can store their points until they've found the reward that they want the most.
Enabling employees to make their own decisions, such as rewards, influences positive behaviors among the workforce.
Combing both, employees feeling having the right to choose and redeem, makes the experience a really memorable one.
Benefit Two: Cost-Effective and Flexible
The simplicity of the gift card is what makes it the ideal employee reward. Gift cards are vastly flexible.
Any budget that you might have for the recognition program, you'll find a gift card that covers it.
With gift cards, there is a significant decrease in the decision-making process. Purchasing, storing, and issuing gift cards is in itself a hassle-free process.
There is less or no storage requirement (digital gift cards), no need for choosing gifts, delivery options, or other complexities. Consequently, it has also helped management follow "spot rewarding" and not delay appreciating people.
It can also benefit global workforces because gift cards can be distributed using the SOLI framework. That way, the entire procedure becomes far more fair and equitable.
Another benefit of a gift card is the ability to customize by printing the company logo and name on it, making it even more personal.
Benefit Three: More Memorable As It Creates An Experience
A cash award is just that extra cash. It is more likely to be seen as compensation instead of recognition.
Contrarily, gift cards assist in establishing a trophy value, which creates a lasting reminder of the achievement.
For example, let us consider two employees getting the "Employee Of The Month" award.
X chooses a cash award that he or she will most likely spend on some everyday purchases.
But Y employee selects a gift card. They celebrate it with their peers and go home to share the good news with their family. They celebrate it and spend the gift card on something memorable.
See the difference? Gift cards, in itself, lend experience to the one getting rewarded.
Memorability is one of the main reasons why non-cash rewards are more effective than cash. The experience of getting rewarded and purchasing something is more valuable than the reward itself.
Further, you can easily use gift cards to reward your workforce during special occasions like their work anniversaries, birthdays, on employee appreciation day, etc.
Benefit Four: Peer Recognition
Award recipients might find it more comfortable to share their happiness about a non-cash reward with their peers. Such conversations not only aid in team building but also motivates people without resulting in any jealously.
Additionally, such achievements can be openly shared through social media channels, which will increase organizational reputation.
4 ways to Make Gift Cards More Effective for your Rewards and Recognition Program
Suppose you have decided that gift cards do sound like the perfect employee rewards to invest in. In that case, you should be aware of a few tips to make it even more effective.
1. Public Recognition to Make the Employee Feel Good
Give the employee a reward in person and in front of their group of peers. Use the opportunity to show your gratitude for the outstanding work and explain the gift card's advantage as an award.
2. Add a Personal Touch
Whatever your employees' achievement might have been, it is the company that is ultimately benefiting.The idea of recognizing someone is actually the approval that one receives from someone they respect or admire.
When the appreciation comes from their boss, it will signify how much you actually care about your team.
Deliver the gift card with a handwritten or custom note of congratulations and appreciation. Extend personal appreciation by thanking the reward recipient. This will inspire even better performance in the future.
3. Public Advocacy
Why not charge up the recognition process even more? Publicize the employee and the achievement in any available and appropriate medium, internally and externally. It might be the company website, notice board, or even the social media channels.
4. Open Loop Gift Cards
Closed-loop gift cards are just another form of the usual rewards that you can offer. Open-loop gift cards give you the freedom that closed-loop gift cards don't provide.
Additionally, open looped cards are widely accepted by most brands, which will allow employees to choose from a variety of options.
Finally.......
The right reward is futile without proper recognition.
In a rewards and recognition program, its success depends not only on the nature of the reward but also on the recognition that comes with it.
So, thinking about integrating gift cards into your employee rewards program is a great decision to take. But don't forget that to keep your employees truly engaged, that must not be your only measure.
Sanjeevani Saikia is a Content Marketing Specialist at Vantage Circle and a voice behind the Vantage Influencers Podcast. As a writer and podcast host, Sanjeevani is dedicated to exploring and promoting recognition-rich, people-first cultures. Through her writing and conversations with HR leaders from around the world, she brings critical industry insights to the forefront. For any related queries, contact editor@vantagecircle.com.
