Feature Article - May/June 2008

It's in the Cards

The Ins and Outs of Gift Card Incentives

By Emily Tipping


A
popular choice for holiday gifts, birthday presents and for other gifts in the public sector, gift cards are expected to bring in $52 billion by 2012. In the 2007 holiday season alone, the National Retail Federation's Gift Card Survey was predicting gift card sales of $26.3 billion, up from $24.8 billion in 2006, with the average consumer spending more on gift cards than in the previous year.

This high consumer demand trickles into incentive programs, where planners should consider adding gift cards to meet participants' desire for choice and selection, according to Cindy Mielke, president of the Incentive Gift Card Council (IGCC) and manager of national accounts for JCPenney Incentive Sales.

"You want to offer what people want," she said. "An incentive program built around what nobody wants isn't going to be effective."

And recent research from the Incentive Federation reflects that what people want is gift cards, at least if you look at the incentive choices large companies turn to. According to the U.S. Incentive Merchandise & Travel Marketplace Study, gift cards are the third most frequently used motivational technique employed by large companies. More than half, 55 percent, said they use gift certificates and gift cards for merchandise or services as part of their programs, while 23 percent said they use gift certificates and gift cards for travel, and 11 percent said they use debit cards. More importantly, among respondents, gift cards and gift certificates for merchandise were perceived as the most effective motivational technique.