by Alex Palmer | September 10, 2018

While gift cards remain a popular choice in incentive programs, planners are spending less on average per program and per recipient this year compared to last. Those were among the findings of the latest Incentive Gift Card IQ, our annual survey of incentive planners about their use of gift cards for recognition and reward programs. Drawing on the responses of more than 450 planners, the results found that 80.9 percent of respondents spent less than $25,000 on gift cards in their incentive programs, compared to 74.2 percent last year. Respondents also report spending at a lower price point on average compared to last year. While 63.2 percent of respondents to this year's survey spend an average of less than $100 per recipient on gift cards, just 58.3 percent said the same in last year's survey. 

The most popular categories of cards remain similar to those of previous years, with dining/restaurant cards by far the most popular choice, with 63.5 percent of respondents saying they purchased this kind of card for their program, followed by retail at 50.4 percent, debit card (44.2 percent) and entertainment (30.5 percent). 

The cards are most often used to recognize performance (cited by 55.2 percent of respondents), followed by business gifts (37 percent), sales incentives (32.7 percent) and as service awards (29.6 percent). The primary objectives for using gift cards are to boost morale (cited by 59.2 percent of respondents), followed by improve performance (41.7 percent), improve employee engagement (39.5 percent) and build employee loyalty (38.4 percent). These numbers are relatively consistent with those in last year's report.

Online vendors have become a more popular option for planners looking to source gift cards, with 37.2 percent of respondents saying that is where they go to purchase cards, compared to just 31.8 percent last year -- though the most popular source for cards by far remains retailers (at 73 percent). Incentive providers were cited by 21.7 percent of respondents, followed by manufacturer/service providers at 21.5 percent.

Complete results of the 2018 Gift Card IQ Survey:

What is your company's annual budget for all gift certificates/gift cards in incentive programs for 2018?

Less than $1,000 33.5%
$1,000 to $9,999 32.4%
$10,000 to $24,999 14.9%
$25,000 to 49,999 4.7%
$50,000 to $99,999 5.6%
$100,000 to $249,999 3.1%
$250,000 to $499,000 1.8%
$500,000 and up 4.0%

On average, how much do you spend on gift certificates/gift cards per recipient, per year?

Less than $25 18.0%
$25 -$49 24.4%
$50 -$99 20.8%
$100 -$149 14.4%
$150 -$199 4.0%
$200 -$499 8.4%
$500 -$999 4.9%
$1,000 or more 5.1%

How often do you give out a gift certificate/gift card?
Frequent spot recognition 22.2%
For specific initiatives 52.2%
When selected by winners 11.0%
For annual awards 14.6%

Which of the following types of gift certificates/gift cards have you purchased for your incentive programs in the past year?
Dining/restaurant 63.5%
Retail store 50.4%
Entertainment 30.5%
Gift check 17.3%
Debit card 44.2%
Catalog merchant 6.2%
Gas 19.7%
Multiple-merchant certificate 12.2%
Online merchant 20.1%
Travel 13.5%
Telephone Card 4.2%
Service/ Experiential 3.8%
Other 6.0%

How do you use gift certificates/gift cards in your incentive programs? 
Recognize performance 55.2%
Sales incentives 32.7%
Business gifts 37.0%
Service Awards 29.6%
Non-sales recognition 21.4%
Employee engagement 26.9%
Consumer promotions 17.4%
Start/maintain business relationships 11.6%
Dealer incentives 6.5%
Safety awards 10.0%
Spot rewards 23.6%
Wellness programs 11.8%
Other (please specify) 7.8%

What are your primary objectives for using gift certificates/gift cards? (Select all that apply)
Boost morale 59.2%
Improve performance 41.7%
Build employee loyalty 38.4%
Improve employee engagement 39.5%
Increase or maintain sales 25.1%
Foster teamwork 24.6%
Build customer loyalty 26.2%
Improve customer service 20.0%
Start/maintain business relationships 19.3%
Create new markets 9.8%
Improve safety 10.4%
Employee health/Insurance costs 9.3%
Other (please specify) 7.3%

What are the primary benefits of offering gift certificates/gift cards in incentive programs? 
Ease of administration 57.5%
Back end/ROI tracking 16.2%
Broad audience appeal 42.9%
Flexible redemption options 43.6%
Perceived value 42.2%
Cost effectiveness 36.6%
Has a lasting impact 27.2%
Other (please specify) 2.0%

How would you rate the overall effectiveness of gift certificates/gift cards, using a scale from 1-5, where 1 means not at all effective and 5 means extremely effective?
1 - 1.3%
2 - 2.1%
3 - 17.2%
4 - 42.8%
5 - 36.6%

How effective are gift certificates/gift cards compared to cash?
MORE effective than cash 27.6%
EQUALLY as effective 41.1%
LESS effective than cash 9.8%
Do NOT use cash awards 21.5%

How effective are gift certificates/gift cards compared to merchandise?
MORE effective 60.5%
EQUALLY effective 27.5%
LESS effective 2.7%
Do NOT use merchandise awards 9.3%

Where do you purchase gift certificates/gift cards used in your incentive programs?
Retailer 73.0%
Manufacturer / service provider 21.5%
Incentive providers 21.7%
Online vendor 37.2%
Catalog 5.8%
Reseller 7.5%
Other (please specify) 4.0%