At the Motivation Show in Chicago, the Incentive Research Foundation
(IRF) previewed a new study that clearly demonstrates the size of the incentive and loyalty gift card market in the U.S., finding it to be worth a total of $22.7 billion.
Of that $22.7 billion, $8.5 billion is spent on sales incentive programs, $7.3 billion is spent on employee recognition programs, $5.2 billion is allocated for customer incentives, and $1.7 billion is spent on channel sales programs.
More specifically, the study sought to answer the question: “What do U.S. businesses spend on gift cards every year?,” says Megg Withinton, president of Ballwin, MO-based Aspect Market Research, which carried out the study for the IRF and Incentive Gift Card Council (IGCC).
To find out, Withinton, a veteran of St. Louis-based incentive house Maritz, reviewed 369 surveys from company executives who manage incentive and loyalty programs that include gift cards. The study looked at three sizes of companies: small companies with revenues of $1 million to $10 million, medium companies with revenues of $11 million to $100 million, and large companies with more than $100 million in revenues.
The biggest companies have the largest program budgets, spending 11 times more on these programs, on average, than small businesses, she says. However, the largest part, by far, of that $22.7 billion is spent by small companies, Withinton adds. She notes that there are vastly more small companies in the U.S. than there are medium- and large-size firms.
Small companies accounted for $12.9 billion in gift card spending, medium sized businesses for $7.5 billion, and the largest firms just $2.3 billion.
The study contains additional information on gift cards and the types of girt cards purchased by businesses for their incentive and loyalty programs, and the IRF and IGCC plan to release the full results within the next month.