Why Should Companies Focus on Gift Cards for Rewards Rather Than Cash Bonuses?

The Best Employee Gifts Start with Gift Cards ! 🎁

There’s always that one person on your holiday gift list who says, “Honestly, a gift voucher would be perfect.”

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And honestly, we get it. We love it too. 🙌

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Instead of picking something that’s nice but not quite your employee gift style, wouldn’t you rather let them choose exactly what they want? Most companies would.

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When it comes to workplace rewards, gift cards are an obvious choice. They’re the most popular type of employee reward, with U.S. companies spending $22.7 billion annually on gift cards.  (Source: Incentive Federation, Inc. (IFI))

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But what makes gift cards better than cash bonuses?

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Let’s explore why so many companies rely on digital gift cards, also known as “non-tangible cash rewards,” to engage, motivate, and recognize employees.

Why Do Gift Cards Work Better Than Cash Bonuses?

The Incentive Research Foundation (IRF) found that cash gift cards often feel less special, especially for higher-earning employees.

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But Why?

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In psychological terms, it’s called “mental accounting.” When people receive cash, they tend to mix it with their salary and use it for everyday expenses like bills, groceries, or gas. This makes the reward feel less like the best gift and more like just another paycheck.

For example, imagine giving an employee a Visa gift card worth $100. They might use it to fill up their gas tank or pay a phone bill—practical but not exciting.

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Now, give them a shop gift card option for a memorable experience like a 4-star hotel stay or a spa day. Instead of spending it on chores, they’ll enjoy a great meal or a relaxing day — something they’ll truly appreciate and remember.

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That’s why personalized gifts in the form of gift cards make better rewards; they create real, enjoyable experiences rather than blending into everyday expenses.

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Discover the hundreds of gift options in The Reward Store catalogue.

5 Best Practices for Using Gift Cards as Employee Rewards

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Gift cards are one of the most effective ways to reward and recognize employees. But to maximize their impact, it’s essential to follow best employee gift practices to ensure they are well-received and meaningful.

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1. Make It Personal

A great reward feels thoughtful. Instead of handing out generic gift cards, tailor them to your employees' interests.

For example:

• If an employee is an avid reader, a bookshop redeem gift card might be a perfect fit.
• If someone recently welcomed their baby, a personalized gifts option for baby essentials shows you’re paying attention.
• If someone has been working extra hours, a thank you gift card for a spa day can encourage them to relax and recharge.

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Taking a moment to personalize work gifts for employees makes them feel special and appreciated, turning a simple incentive into a memorable gift.

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2. Avoid Overwhelming Employees with Too Many Choices

While variety is great, too many options can lead to decision fatigue. If employees are overwhelmed by an extensive list of online gift card options, they might feel stressed rather than rewarded.

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Instead, curate your gift options catalogue to align with your company culture and values. Offer a mix of practical and fun choices—such as Amazon and Zomato for everyday use, alongside experience-based good employee gifts for travel, entertainment, or wellness.

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3. Ensure the gift card value matches the store.

A gift card should allow employees to make a meaningful purchase without additional out-of-pocket spending.

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A $30 redeem card for a movie theatre works great for a fun night out, but that same amount at a luxury electronics store might feel underwhelming.

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When selecting cash gift cards, consider:

• The average price of items at that store.
• Whether the amount is enough to cover a full experience.
• If employees can easily use the best gift without spending extra.

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Matching gift card value to store expectations ensures employees feel truly rewarded.

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4. Pair Gift Cards with Recognition and Appreciation

A gift card alone is nice, but pairing it with genuine recognition makes it far more impactful. Employees want to feel valued, not just rewarded.

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Ways to enhance gift cards as work gifts for employees:

• Include a heartfelt thank-you note explaining why they earned the reward.
• Announce the gift card reward in a team meeting or award ceremony, sharing the employee’s contributions.
• Give digital gift cards for meaningful milestones, such as work anniversaries, birthdays, or major achievements.

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Rewards confer recognition, at least implicitly. But to maximize impact, every tangible reward should come with explicit appreciation. A simple personal touch can make a huge difference.

Cash vs. Reward Which One Would You Choose?

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A simple, thoughtful gift card reward can boost your employee morale.

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Gift cards are an excellent way to recognize and reward employees, especially when they’re personalized, properly valued, and paired with genuine appreciation. Even small rewards, when delivered thoughtfully, can strengthen workplace morale and loyalty.

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At The Reward Store, we make employee recognition effortless with a global catalogue of over 8,000 unique employee gift ideas, customizable reward options, and seamless integration with HR systems.

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Want to create a culture of appreciation in your workplace?

Let us help you build a best employee gifts program that truly shows your love towards your employees and contributes to a positive workspace.

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Explore The Reward Store catalogue and discover how recognition, even a simple appreciation—can connect, motivate, and inspire your high-performing teams.

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