by Alex Palmer | September 06, 2017
A majority of U.S. businesses are increasingly using gift cards to reward a range of employees and customers, according to a new report. The "B2B Gift Card Buyer Study" from the Incentive Research Foundation (IRF) and the Incentive Gift Card Council (IGCC), the Incentive Marketing Association (IMA) strategic industry group, found that 61 percent of large companies purchase gift cards for an average of 2.4 different reward audiences.

The report also found that 69 percent of mid-size companies are purchasing gift cards for an average of 2.8 different rewards and recognition audiences, such as channel, sales, employee, and customer.

The study drew on the responses of 300 businesses, a majority of which (156) have revenue of more than $1 billion. All respondents spent more than $10,000 on B2B gift cards annually, and most (250 respondents) spent more than $25,000 on B2B gift cards.

It found that on average, mid-size firms with significant enough gift card purchases to qualify for the study are spending $450,000 per year on gift cards across all their programs, with the largest firms are spending over $1 million. Additionally, 71 percent of mid-size and 52 percent of large companies reported an increase in their B2B gift card spending.

"The increase in gift card spending across mid-sized and large businesses shows an exciting uptick and having the study results helps our IGCC members optimize opportunities in the B2B marketplace," said Ashley Harris, IGCC vice president of education, and director of strategic partnerships for National Gift Card. "Gift cards are an important option in incentive programs and will continue to grab a significant market share."

The report also looked at which gift card partners the businesses most valued. For the largest firms surveyed, gift card suppliers received the highest ratings on choice, ease, and service. They were followed closely by agencies. The results found that while brands are viewed as easy to work with, they are also seen as providing less choice and service than alternatives. Online general merchants and retailers were also described as easy to work with and offering a variety of options, but not as strong on service as agencies and gift card suppliers.

"Looking beyond the incentive space, the impact of gift cards on the payments industry is expanding significantly," Harris explained. "Gift cards, particularly digital cards, are becoming a form of branded currency and an increasingly important player in the payments industry."