Still handing out engraved pens and five-year pins to worthy employees? That’s not what they want. Employees say gift cards make the best gifts, rewards or incentives, according to recent surveys.
But buying gift cards from stores during a recession could be risky. Before you spend your incentive budget on cards that generate more problems than appreciation, do some homework.
Here are six ways to make sure your organization doesn’t waste its money on gift cards that don’t deliver.
1. Before you buy gift cards from a retail chain, find out whether it has closed any of its stores or is expected to file for bankruptcy. Some stores have refused to honor gift cards once they got into financial trouble.
2. Limit your selection to retailers that will accept the gift cards at many store locations and online so employees can shop where it’s convenient.
3. Tell employees about any limitations or conditions on a gift card; don’t assume they will learn these on their own. Some cards—particularly those for general shopping at malls and pre-paid bank or credit card-issued gift cards—have expiration dates or charge penalties for every month they go unused. The top 25 retailers, on the other hand, issue cards that do not expire, and 84% of them are fee-free, according to the National Retail Federation.
4. Don’t buy gift cards from online auction sites. There’s a chance they’re counterfeit or stolen.
5. Remind employees to use the gift cards you give them before the cards expire or lose their value over time.
6. Keep your receipts. Some retailers will replace a lost gift card if you have your original purchase receipt.
Spending on gift cards could top $600 billion by 2010, according to some studies. One reason employers like them: Issuing a cash bonus through takes time, so it’s not an instant reward for a job well done. A gift card offered on the spot is.
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