Digital gift cards help level up rewards and recognition programs

Gift cards are the most attractive form of rewards across demographic groups, with 68% of consumers considering them an enticing incentive. Their appeal routinely edges out brand discounts, charity donations and premium tangible or intangible features. And unlike those other options, they're an instant carrot that can be used immediately to please employee populations without any redemption problems. In short, they just work.

To differentiate themselves in a highly competitive market, rewards and recognition providers that serve employers must offer more than just the traditional benefits, which are now table stakes. Having said that, benefit brokers and advisers should know that digital gift cards can be a strategic, game-changing addition to any such program.

The ability to broaden a rewards and recognition program so that it appeals to a larger audience is one of the most significant advantages of digital gift cards. They are a versatile option that can be tailored to a wide range of preferences, be it tech-savvy Gen Z workers or foodies who value fine-dining experiences. This results in a more appealing program for customers across a wide range of markets.

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Digital gift cards also provide companies with access to one of the most powerful tools available: data. Although physical gift cards can give stores and gift-card issuers some data, it is frequently limited. On the other hand, digital gift cards give companies access to a far more comprehensive set of data, which can then be provided to AI and machine learning programs for tailored offers and incentives, enhancing the customer experience and guiding marketing decisions.

When it comes down to it, including digital gift cards in rewards packages is just a smart financial decision for both the employers handing out rewards and the employee, who is the end user. Many companies offer competitive discounts when purchased in bulk, and although a single gift card sold at a 2% to 6% discount might not seem like a huge saving, the numbers soon add up. This pricing differential also can be used to finance other facets of rewards initiatives, increasing an organization's total profitability and offering clients and their end users further value.  

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For example, when a manager rewards the best performer on a workplace team with a $100 gift card, they can both buy the gift card on a discount and allow employees access to money from their paycheck before payday actually hits. The employee will feel recognized by his or her manager, while the company gets a discount on the benefit. By passing this non-cash reward to the employee, the brand is making money and the consumer is happy.

It's no secret that brand recognition matters. Adding digital gift cards from well-known companies can significantly improve employee perception of their employer. Through the integration of a gift card platform with access to leading brands, clients can establish an air of legitimacy and superior quality to their offerings, thereby expanding the company's appeal. 

Digital cards, as opposed to physical ones, are also the better option for consumers. They are now frequently easier to buy, store and redeem than physical ones because so much shopping is done online. They can be bought in-app or online and be given to the receiver instantly via text message, email or mobile wallet, minimizing the risk of snail-mail loss, as well as guaranteeing a simple and easy redemption process. They're just practical – they can't ever get lost or be forgotten at home. 

In addition to being simpler for the receiver to use, they also make it easier for gift card sellers to distribute digitally, which opens up a variety of new use cases for businesses beyond traditional gifting. Employers benefit because they can reward and recognize employees in the moment – at the time it matters most, and not in three to five business days when they receive their physical card. Employees feel valued when they have a reward they can access instantly.

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Lastly, digital gift cards are an environmentally responsible choice because they don't require physical production, delivery, or waste. Consider that 50,700 tons of plastic gift cards are dumped into landfills each year, and they can take up to 450 years to break down into microplastics. The majority of plastic gift cards are single-use products that wind up in landfills, and although there are biodegradable gift card substitutes, they're expensive to produce and can still take many years to break down. 

This makes digital gift cards popular with consumers who have grown increasingly concerned about sustainability. Employers can even go one step further and include charity gift cards in their own product offering, giving clients' staff members the chance to support the causes that are important to them. 

Digital gift cards stand out as the quintessential piece to elevate rewards programs, resonating with a broad consumer base as an immediate and hassle-free incentive. Their universal appeal positions them as a versatile and effective tool in a competitive market. By integrating digital gift cards, rewards and recognition providers can significantly enhance their offerings, ensuring their programs not only meet but exceed the expectations of today's discerning consumers, propelling their rewards programs to new heights. 

By suggesting digital gift cards to their employer clients, brokers and advisers are not just helping deliver a rewards program; they're also helping sell a carefully crafted package that provides value on several fronts.