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Gift Cards: The Perfect Employee Reward For Your Workforce

5 min read
Last Updated on 28 January, 2021
Gift Cards: The Perfect Employee Reward For Your Workforce

Employee reward programs are perhaps the quickest and easiest way to achieve higher employee engagement levels in your organization.

People love getting appreciated for the work that they do. It builds motivation, increases productivity, and also cultivates a sense of loyalty towards the organization.

However, appreciation through a monetary reward system can get real expensive quick. It might also be why many small businesses and startups shy away from offering any employee incentives.

But is employee recognition only valid when it’s cash-based? Or are there any better alternatives?

According to a study done by the Incentive Research Foundation:

44.07% of employees agree that gift cards are the “best rewards to receive,” while 27.12% agree that they are “good rewards to receive".

Academic studies continue to show that non-tangible rewards (such as gift cards) are as effective, if not more, as the cash based incentives. It showed a similar levels of spike in productivity and happiness among the workforce.

Let's have a look at why gift cards are an employee reward that should be considered more often for any reward and recognition program.

Recommended Article: 30 Perfect Christmas Gifts for Employees

Types Of Gift Cards

Many organizations that want to incorporate gift cards into their rewards program don’t know where to start. The first thing that you’ll need to decide on is whether you’ll be offering employees a closed-loop or open-loop gift card program.

Closed Loop

Closed-loop gift cards only work with one particular store or a brand. For example, a specific restaurant’s gift cards can only be redeemable in that particular store or other branches of the store.

Open Loop

Open looped gift cards are typically branded with a credit card network such as Visa. Such cards can be redeemed across multiple brands unless specifically restricted.

Closed looped cards significantly reduce the freedom of employees to select their own rewards. On the other hand, open looped cards offer employees the flexibility to use the cards and choose what they actually want. According to us, an open-loop system is the way to go to make your employees truly feel good about being rewarded.

4 Benefits Of Having Gift Cards In Your Employee Reward Program

Benefit One: Ability To Choose

Does your rewards and recognition program have a set reward that you give out to the top performers? If you do, you might need to rethink it.

People love getting rewarded, but you want it to be something that they actually want and not forced to accept. Gift cards empower employees to select the reward of their choosing. Not only is it more feasible to give employees the power to choose their own reward, but it also creates a sense of excitement among them. Additionally, gift cards can easily and quickly be introduced in point-tracking programs where recipients can store points until they’ve found the reward that they want the most.

Enabling employees to make their own decisions, such as rewards, influences positive behaviors among the workforce. Combing both, employees feeling having the right to choose and when to redeem, makes the experience a really memorable one.

Benefit Two: Cost-Effective and Flexible

The simplicity of the gift card is what makes it the ideal employee reward. Gift cards are vastly flexible. Any budget that you might have for the recognition program, you’ll find a gift card that covers it.

With gift cards, there is a significant decrease in the decision-making process. Purchasing, storing, and issuing of gift cards is in itself a hassle-free process. There is less or no requirement of storage (digital gift cards), no need for choosing gifts, delivery options, or other complexities. Consequently, it has also helped management to follow “on the spot recognition” and not delay appreciating.

Another benefit with a gift card is the ability to customize by printing the company logo and name on it, which makes it even more personal.

Benefit Three: More Memorable As It Creates An Experience

A cash award is just that- extra cash. It is more likely to be seen as compensation instead of recognition. Contrarily, gift cards assist in establishing a trophy value, which creates a lasting reminder of the achievement.

For example, let us consider two employees getting the “Employee Of The Month” award. One chooses a cash award that he’ll most likely spend on some everyday purchases. The other employee selects a gift card. He gets the peer recognition and goes home to share the good news with his family. They celebrate it and spend the gift card on something memorable. See the difference? Gift cards, in itself, lend experience to the one getting rewarded.

Memorability is one of the main reasons why non-cash rewards are more effective than cash. The experience of getting rewarded and purchasing something is more valuable than the reward itself.

Benefit Four: Peer Recognition

Cash-based incentives are very likely to fuel a feeling of inferiority among other team members. It is more likely to affect the team bonding or might even contribute to inner conflicts.

It is often seen as socially unacceptable to brag about cash or question someone else about it. Award recipients might find it more comfortable to share their happiness about a non-cash reward to their peers. Such conversations not only aid in team building but also motivates people without bringing in jealously. Additionally, such achievements can be openly shared through social media channels, which will increase organizational reputation.

4 Ways To Make Gift Cards More Effective For Your Rewards And Recognition Program

If you have decided that gift cards do sound like the perfect employee rewards to invest upon, then before implementing it, you should be aware of a few tips to make it even more effective.

1. Public Recognition To Make The Employee Feel Good

Give the employee reward in person and front of their group of peers. Use the event as an occasion to express your appreciation for the excellent work and communicate the advantage of the gift card as an award.

2. Add A Personal Touch

Whatever your employees’ achievement might have been, it is the company that is ultimately benefiting. The idea of recognizing someone is actually the approval that one receives from someone they respect or admire. When the appreciation comes from their boss, it will signify how much you actually care about your team.

Deliver the gift card with a handwritten or custom note of congratulations and appreciation. Extend personal appreciation through a thanks to the reward recipient to inspire even better performance in the future.

3. Public Advocacy

Why not charge up the recognition process even more? Publicize the employee and the achievement in any available and appropriate medium, internally and externally. It might be the company website, notice board, or even the social media channels.

4. Open Loop Gift Cards

Closed-loop gift cards are just another form of the usual rewards that you can offer. Open-loop gift cards give you the freedom that closed-loop gift cards don’t provide. Additionally, open looped cards are widely accepted by most brands, which will allow employees to choose from a variety of options.


The right reward us futile without proper recognition. In a rewards and recognition program, its success doesn’t only depend on the nature of the reward but also on the recognition that comes alongside it.

So, if you are taking the first step towards incorporating gift cards in your employee rewards program, that is an excellent measure you’re considering. But don’t forget that to keep your employees truly engaged, that must not be your only measure.

This article is written by Barasha Medhi who is a part of the marketing team at Vantage Circle. Barasha can be found either searching for interesting HR, company culture, and corporate buzzwords to write about or looking at pictures of cozy Bel Air mansions. For any related queries, contact