There are signs that the incentive industry’s main message — that cash is an expensive and ineffective way to recognize and reward employees — is reaching more companies. Respondents to Incentive’s “2012 Gift Card IQ” survey who said that gift cards are more effective than cash grew from 27.8 percent last year to 36.7 percent in 2012. Most of that growth came from respondents who said that cash and gift cards were equally effective in 2011.
There is also some indication that, in 2012, companies have increased the frequency with which they use gift cards throughout the year, as well as the amount they are spending on them.
But other than that, the best word to describe the results of Incentive’s “2012 Gift Card IQ” survey, compared to the 2011 version, is stability. By and large, this year’s results were within a couple percentage points of last year’s in virtually every category.
Per-recipient spending rose slightly, with spending moving from low-value gift cards to high-value ones this year. While spending in the sub-$100 category decreased in 2012, respondents say that budgets in each of the five categories above $100 per-recipient annually (from $100-$149 to $1,000 and above) were cumulatively up 6.8 percent over 2011, to 42.4 percent.
Another indicator of growing gift card use throughout the year is the frequency with which they are purchased for programs. Most companies buy gift cards when they need to give them out, in order to conserve cash flow and to avoid the security issue of thousands of dollars worth of gift cards sitting in managers’ desk drawers. For that reason, December is always the month in which the majority of respondents say they purchase gift cards for their incentive programs.
However, in 2012, the numbers were consistently up in each of the other 11 months, compared to 2011. From January through November of this year, gift cards were purchased by 2 to 8 percent more respondents each month than last year — small numbers individually, but cumulatively suggesting that gift cards are being more frequently used throughout the year.
Incentive’s “Gift Card IQ” survey was compiled from May 22 to June 29, 2012. The survey was available on our site, and was sent via email to subscribers of Incentive magazine, and its weekly e-newsletter and gift card e-newsletter. A total of 497 responses were received.