by Alex Palmer | December 04, 2018

As the end of the year draws nigh, many managers are looking for ways to show hard-working employees what a great job they've done day in and day out. Especially during the holidays, when there are so many decisions to be made and presents to buy, choosing to hand out motivational gift cards is the ideal mix of thoughtful and flexible. But there are certain rules that managers might want to keep in mind when incorporating gift cards into their holiday reward programs. 

For insight on this topic, Incentive spoke with Deborah Merkin, CEO and founder of GiftCard Partners, which helps companies select the best  options for their programs, including employee recognition, motivation and sales incentives. She offered these tips and best practices.

What are the advantages of awarding employees with gift cards during the holiday season?

The end of the year is a time to say "thank you" to everyone we work with. A great way to do so is by giving gift cards to employees, vendors and business partners, because businesses get greater interest and business from those audiences when they do. 

In fact, companies that can double this rate of engagement perform 147 percent higher than their competition (according to Gallup). If you want your reward to perform best, it is important to give a gift that is meaningful, useful and memorable. To make the reward unforgettable, offer a small selection of closed-loop gift cards to specific brands like Apple, Outback Steakhouse or the like. 

What types of behavior do gift cards motivate in an employee?

Gift cards are very versatile as incentives, so how effective they are depends on the person receiving them. What is rewarding to one person is not always desirable to another. The manager who knows the recipients well and understands the demographics of their staff is better prepared to suggest the right card or selection of cards to the HR professional who is purchasing them. For example, 80 percent of Millennials say that even just the act of seeing someone else get recognition makes them want to stay at a company longer. 

Additionally, the presentation of the gift card matters to the recipient. Do they like to be recognized in front of their peers (in which case, a physical gift card may be more effective than using their phone for an e-gift card)? I have someone on my staff who is very shy about public recognition and would prefer I just reward her quietly. I might choose to give her an e-gift card with a short note in that case, and let it be a surprise in her email.

What should a manager or incentive planner keep in mind when awarding gift cards during the holidays?

We have just completed a study with the IRF that focuses on managers' experiences, and they are so important to the success of reward programs. One of the things that came out of the study is that 52 percent of managers surveyed felt they did not receive enough training or support from their superiors to know how to award and thank their teams. So the first thing I would recommend is asking for tools, guidelines and support from their superiors or HR professionals.

As I mentioned, gift cards work best when you consider your audience and tailor the selection and presentation to them. It's best to fit the brand and type of gift card to the person, as well as to the reason you're giving it to them.

But most of all say, "thank you" and tell them why you value them and their accomplishments. The act of recognizing them goes a long way not just for them, but for everyone else in the organization who sees it.

What are the respective advantages of a physical vs. digital card during the holidays?

The major difference between physical and digital gift cards is how they are used by the recipient and the recipient's preferences. If you're tailoring the reward to your demographics, you would know that a Millennial is more likely to want and use an e-gift card. However, keep up with the research into gift card trends, because First Data Corp. just released a study that showed Gen Z (roughly ages 18-25) prefer a physical card.