- Prepaid cards are now the most frequently used reward in corporate incentive programs
- A full 44 percent of our card recipient survey respondents told us that prepaid cards are their favorite type of gift or reward.
- When offered a prepaid card or equivalent cash, five times as many of our respondents chose the prepaid card.
- The majority of incentive planners believe prepaid cards can be more meaningful, personal and impactful than cash; almost half believe that, dollar for dollar, they are the most effective reward available. More than 75 percent believe that they are among the most effective of all rewards ― especially in driving loyalty and engagement.
- The use of tangible, non-cash rewards for employees, partners and customers has become a $46 billion plus industry in the United States (Incentive Federation, 2007).
- Tangible, non-cash rewards consist mainly of merchandise and travel, yet the largest and perhaps fastest growing component of non-cash rewards is prepaid cards, debit cards and gift certificate.
- In 2008, according to the IRF in its paper: The Effects of a Down Economy on the Incentive Industry”, the use of debit/prepaid cards had increased 21 percent in rewards and recognition programs over 2007.
- In 2011, Scott Jeffrey of Monmouth University reported that prepaid cards were used significantly more than cash, travel or merchandise for employee and partner rewards among the 170 participants in his survey.
- “Organizations today want to reward more people, not just the high performers but also those that support them. Gift cards make it easier to spread the incentive budget across more recipients and they give recipients broader choice over their reward.” – Mike Ryan, President Emeritus of The Performance Improvement Council
Effects of a Down Economy on The Incentive Industry
- The down economy is considered by most respondents (81%) as having a negative impact on their ability to plan travel incentive programs.
- The down economy is viewed by less than a majority (48%) as having a negative impact on the ability to plan and implement a merchandise non-cash incentive program.
- The most frequently mentioned changes in award selection were…
- Increase the use of debit/gift cards (21%)
- Include individual travel as an option (19%)
- Decrease merchandise award value (16%)
- The merchandise and gift card industry is alive and kicking. In fact, the 2014 IRF Pulse Survey shows a decline in the number of organizations that believe economic conditions are having a negative impact on incentive programs.
- It’s important to seek a balance between necessity and luxury. Electronics and open gift cards are now popular items for programs.
- Social, political and environmental unrest continue to present program risks. During such times, merchandise and gift cards are providing a safe haven for many companies.
- The recovery was swifter in the gift card and merchandise side of the market compared to other sides of the market such as travel.
- While a third of the industry felt that the economy was having a negative impact on merchandise and gift card programs at the recession’s height in 2009, that number dropped to less than 10% in late 2014.
- The height of the recession showed Housewares and Apparel at the top of what was included in non-cash reward and recognition programs. Today, in a rebounding economy, we’re seeing a strong shift: Electronics and Open gift cards are now at the top of the list. Both of these can be seen as items of luxury as well as necessity.
- As it is explained by the 20-60-20 theory, 20% of your sales force are top performers and 20% are struggling, but 60% are somewhere in the middle.
- Since the 60% core group is so large, by just driving a 5% performance boost from the middle you can yield over 70% more revenue than through a 5% performance shift among top performers.
- A recent consumer survey of more than 1,400 people demonstrates the exceedingly broad appeal of prepaid card rewards for building consumer loyalty.
- When asked how they preferred to be rewarded for a purchase, in general, respondents overwhelmingly chose prepaid gift cards in denominations of $25 (45 percent); $50 (51 percent); and $100 (56 percent).