Gift experiences > (greater than) gift cards

Can we all *finally* agree that gift cards are disappointing to receive? With the holiday season just over the horizon, this may not be the news you want to hear right now, but it’s true. We may all smile and pretend that gift cards are desirable gifts, but that’s only because it’d be rude to react in utter disappointment. 

Regardless of the reason, it’s safe to assume that gift cards easily rank in the top three hierarchy of disappointing corporate gifts. We’ve narrowed down three reasons gift cards lack inspiration and appreciation, and we’re here to share those with you in this week’s blog feature. 

Let’s go back to the beginning

In October 2019, the IRF (Incentive Research Foundation) published its fall issue of The IRF Quarterly Academic Review. The IRF states, "The fall issue focuses on how gift cards can be used as effective rewards in well-designed incentive programs.” While the IRF research findings did highlight a few successful instances when gift cards were used for fun and rewarding purchases, almost all of the research found that incentivizing with gift cards actually results in more people using their rewards for utilitarian purposes such as bills, gas, and rent.

As the Gifting Experts, we’ve spent much time researching and studying the effects of appreciating, motivating, and rewarding people with gift cards. Our goal is to help clients deliver the best gift solutions for success, and if we found that gift cards were a means to an end in helping them appreciate people, we would have already dominated this category. Alas, we’ve found the opposite to be true and have honed in on the top three reasons why gift cards don’t deliver. 

Three reasons why gift cards don’t deliver 

Reason #1: You’re adding another item to people’s to-do lists. → Even though a gift card may be quick and convenient for you, that doesn’t mean the recipient feels the same way. Rewarding someone with a gift card automatically gives them another chore. Assuming they spend their gift card on themselves, they will now have to take the time to go shopping, find an item they love, and use the gift card to purchase it. 

While that may sound appealing to some, many prioritize their time outside work events as sacred and valuable. Giving them another task, another task to report back on can cause workplace anxiety and stress instead of making them feel valued and appreciated. 

Reason #2: People spend gift cards sparingly, if at all, on themselves. → There is a difference between someone giving you a beautiful designer handbag and a gift card in hopes you’ll select a beautiful, new handbag for yourself. The difference lies in the logic of mental accounting. 

When given a gift they would not usually buy for themselves, most people tend to cherish and remember that specific gift experience above others. However, when you give them a gift card, even with the highest hopes that they will use it to treat themselves, there’s never any concrete guarantee. When surveyed by the IRF, two-thirds of Americans admitted to spending gift cards on bills, necessity items, and others instead of rewarding themselves.

“An extensive body of other research suggests that when people receive rewards, positive feelings are generated between the recipient and the giver, including a desire to reciprocate (e.g., exert more effort at work). Gift card recipients are less likely to spend their reward on themselves or for fun; hence they forget it faster. And the reciprocity never comes.” - IRF, Fall 2019

Reason #3: Most gift cards forgo thoughtfulness for quick solutions.  → Let’s read aloud together: a convenient gift does not equate to a quality gift. While a convenient gift can save you time and energy, that doesn’t guarantee people will be thrilled about receiving it. In addition, gift cards are often just as easy to lose as they are to forget, and there are often boundaries surrounding many gift card programs (i.e., length of time to use, product or category restrictions, etc.).

While at first glance, a gift card looks like a solution that excites recipients, gift cards often have the opposite effect. People tend to perceive gift cards essentially the same way as cash, rendering them ineffective tools for incentivizing or recognizing. 

Don’t force them into an “Oh, great, another gift card…” smile.  And don’t underestimate your gift-giving abilities, either. Cultivate’s all-in-one Online Gifting Platform will far exceed any gift card gift program. Plus, our collections offer something for everyone, fit every size budget, and help you achieve your goals without ever lifting a finger.

Whether you’re sending out holiday gifts, rewarding great work, or just want to make someone’s day with a premium gift of their choice, when it comes to your upcoming gifting strategies, let Cultivate show you the way! We offer a seamless process from start to finish and ensure we deliver for our clients and their recipients. Together, we can create unforgettable gift experiences! Learn more here.