Giving gift cards as a benefit: 9 key do’s and don’ts

gift cardsPrepaid gift cards are an increasingly popular tool to motivate and reward employees. Nearly two-thirds (65%) of recognition and rewards administrators use them in some capacity, says a new report by the Incentive Research Foundation.

However, employers often weaken the impact by simply handing them out without a strategy. Get the most out of prepaid cards with these tips:

1. Do personalize the cards. Pro­­viders of prepaid cards allow companies to brand the plastic with company logos, holiday wishes, congratulatory messages and the names of winners.  

2. Don’t award too many cards too often. It dilutes their value and motivational power. Set a limit on the number or value of cards that an employee can receive per year or six months. Track the results.  

3. Don’t wait to give the gift cards to winners. Awarding the cards promptly after the accomplishment ensures maximum motivation.

BP Handbook D

4. Do include public recognition, which may be just as important as the card itself. Formally present cards in front of peers at staff meetings or other employee events.

5. Don’t use gift cards as extra compensation or a pay bonus. Employees won’t believe they are getting anything “extra” for their effort.  

6. Do combine the cards with an overall incentive program tied to de­­partmental and company goals. Pre­­paid cards are more effective when they aren’t the primary rewards, but reinforce an incentive strategy.  

7. Don’t get too narrow with card choices. Hand out prepaid American Express, MasterCard or Visa cards instead of cards for clothing or specialty stores. Employees can spend them wherever they want.

Note: Don’t buy gift cards from online auction sites; there’s a chance they’re counterfeit or stolen.

8. Do tell employees about any limitations or conditions on a gift card. Some may have expiration dates or charge penalties for every month they go unused.

9. Do ask for discounts. If you buy gift cards in bulk from a retailer, ask if they’ll throw in coupons or discounts for employees who redeem them.

Final point: Periodically vary the tasks and accomplishments necessary to earn gift cards. The options include performance and sales goals, on-the-spot and peer-to-peer rewards, length of service, safety and employee contests.