Employers turn to loyalty programs for yearly bonuses
April 22, 2013

Cultivating a gift card program can boost sales and increase customer satisfaction and retention for small and mid-sized businesses. During the recession, employers looked for alternative ways to reward workers and gift cards presented a convenient way to continue offering employees yearly bonuses while keeping costs down. As the economy stabilizes, companies are still keeping with the strategy and gift card loyalty programs are set to become the largest category for employee rewards. Small businesses looking to improve sales may want to consider partnering with organizations early in the year to drive retention among their employees. 

Study finds majority of businesses give gift card bonuses
According to research by the Incentive Research Federation, 37 percent of companies surveyed said non-cash bonuses are easier to distribute than other forms. Thirty-two percent also reported employees prefer receiving gift cards as an incentive and 11 percent said prepaid cards offer a degree of personalization for each worker, making them feel valued. 

Of those businesses polled, 27 percent said gift cards are the most financially effective reward for the company, with 51 percent saying non-cash is only one among many types of rewards.

Mike Ryan, president emeritus of the Performance Improvement Council, said in the report that gift cards drive consumer satisfaction and may be one of the best gifts to give employees.

"A responsible person who receives cash as a reward may not feel comfortable about spending it on themselves, so it is not exciting for them," Ryan said. "A $25 gift card is better than $25 cash because it gives them license to spend on themselves and this makes it appealing."

Promoting loyalty programs among companies
Approaching organizations early in the year can help small businesses increase the efficiency of their gift card loyalty programs. Providing companies with the opportunity to buy gift cards in bulk at a slight discount can boost brand awareness and drive sales. 

Although gift cards are small-scale rewards, employees still appreciate the gesture and instantly become consumers for the selected company. By communicating with employers before they give out yearly bonuses, small businesses can increase their revenue and drive customer loyalty. Start-ups thinking about developing a gift card loyalty program may want to consider creating cards that have the amount clearly labeled to prevent any miscommunication among companies and consumers.

Nexus: G-WEBCD4