10 Tips to Ensure Incentive Recipients Use Gift Card Awards January 08, 2010
By Donna M. Airoldi
Utilizing gift cards in an incentive program is an efficient and cost-effective way to recognize and reward employees while also giving recipients more variety and control over the choice of their awards. But unlike the experience of an incentive travel program or delivery of more tangible merchandise, the challenge with gift cards is making sure recipients redeem and use their award.
“Without usage, reward cards lose their most important attribute—the capacity to motivate,” says Betty Weinkle, area vice president for partner sales at American Express Incentive Services, and newly elected executive vice president of the Incentive Gift Card Council.
There are ways, however, incentive managers can build and manage gift card programs to help combat this challenge. Here’s what the experts have to say.
1. Communicate often and regularly. “Frequency and personalization of cardholder outreach are critical,” says Weinkle. “E-mails, postcards, text messages, etc., remind recipients of [their award] and of new offers, sales and special promotions they’ll be sure to enjoy. Other communication mechanisms include Web sites, magazines and loyalty membership.”
Adds Patty Saari, vice president of client services at Minneapolis–based Carlson Marketing, “There’s always the ago-old issue with gift cards of losing the meaningfulness behind the award the closer you get to cash, but communications provide an opportunity to reinforce the gift. ‘Did you get something fun with that card? Did you do something fun?’ Make it a dialog. It helps recipients remember that they have the card and to use it if they haven’t already. It also helps tie it to the original source, which is the purpose of reward in the first place.”
2. Personalize the communication. “A custom message can leave a lasting impression and the gift will not be forgotten,” says Crystal Melby, director of marketing at GiftCertificates.com in Omaha, NE. “For spot awards, present the card in person,” says Saari. “There’s the opportunity for immediate personal communication, a person handing someone a tangible item, which is more memorable than a technology-driven medium.”
3. Reward recipients in a timely manner “Awards that are too delayed are more easily forgotten or lost,” says Melby.
4. Use cards in points programs rather than for spot awards. “In points programs, recipients are making a personal choice; there’s higher use of that card because they’ve worked hard to earn those points and made the decision to reward themselves,” says Larisa Mendenhall, director of individual awards for ITAGroup, based in West Des Moines, IA. “Spot awards are great, but they’re better when recognition certificates or points are awarded to accumulate toward a larger reward.”
5. Use multi-merchant cards. “Maritz' incentive program research shows that when people redeem for gift cards, more than 30 percent of the time they are being used for gifts. Since it's difficult to determine where someone else wants to shop, we recommend giving a "multi-merchant" card,” says Mary Luckey, director of incentive awards for St. Louis–based Maritz. “When you give a card that can be used at a number of merchants, your gift recipient will be able to personally choose where they shop, and they'll be much more likely to use their card.” Examples are the Maritz exclusively yours card and the SuperCertificate from GiftCertificates.com, each of which are good for hundreds of retailers.
Individual incentive travel gift cards give participants their own control over travel plans, which may ensure that they use their rewards.
6. Tailor the card choices. “While broad appeal is highly valued, especially for larger audiences, be more selective and don’t just throw up big box retailers,” says Saari. “Think about what might be unique for the type of individuals you’re trying to entice or for a geographical region. Tie in an incentive/reward that focuses on charities, for example.”
7. Promote specials offered by retailers in card programs. “This helps maximize the award amount recipients have been given. Consumers get a bigger bang for their buck, and retailers know a person coming into a store with a $50 gift card will spend more than $50,” says Carlson’s Saari. “We’re working with retailers to offer additional incentives when participants use points for certain brands or when they use those cards at the stores, such as getting an extra 5 percent off. It’s a perfect way to support the communication efforts.”
8. Encourage recipients to register their cards for extra benefits. Some retailers offer special perks for cardholders. “For example when you register your Starbucks card, you get your first drink free, with other specials offered throughout the year, such as free flavorings in your coffee, if you want it,” says Saari. “Not all the offers are for free items, but they’re for perks the general consumer wouldn’t get. Additional retailers are adopting this benefit strategy as well. Registration also helps prevent loss of value if cards are lost or stolen, and retailers will benefit of having more loyal gift card base.”
9. Use cards for merchants that have online shopping. “Some retailers are providing rewards to encourage online shopping and promoting digital gift cards through their Web sites so they can stimulate more sales. The convenient process of online gift card redemption helps ensure gift cards are used,” says David Stone, CEO of CashStar, a gift card and incentive company based in Portland, ME. “Also, we are seeing some instances of giving bonus reward points for online shopping, a process enabled by having a flexible digital gift card system like CashStar.”
10. Focus on the experience instead of the card in promos. “People respond more positively to tangible rewards, so when promoting gift cards in your programs, use lifestyle shots and focus on the experience instead of the card,” says Maritz’ Luckey. “For instance, instead of showing a picture of a restaurant card, show an image of fun people sitting in a restaurant with a small image of the card. This will get your people to focus on the experience; and once they redeem, they'll be much more likely to use the card and associate that positive experience with your company.”
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