Why businesses must manage gift reward schemes carefully

Businesses are wasting hundreds of millions of pounds every year on unused gift cards that are given to employees, according to a new study.


Gift Cloud suggest that up to £120 million is wasted yearly which represents a significant sum of wasted finance, especially for smaller firms.


Although providing staff with gift cards provides little direct financial threat to a firm, poor management of such schemes could see money being lost unnecessarily.


Of more than 2,300 workers to take part in the study, 63% said they have received a gift card from their employer.


However, 41% of those people admitted they had never spent it with a third saying it was for a shop they had never shopped at.


A further 32% said they has merely forgotten about it, while 28% said it was lost or damaged so they were unable to use it.


The average value of a gift card was £15, although the numbers can quickly add up if a firm has several hundred employees.


Why are benefits important?


Employee benefits play a huge role in developing a workforce that is motivated and happy, factors which influence upon sales, productivity and business success.


They also play a key role in the processes of attracting and retaining the best talent.


Staff revealed the gifts they most appreciate from their employer too, including cash, a bottle of champagne or even an extra day’s holiday.


Businesses can take steps to ensure that funds are not wasted on gift cards too by taking a few simple steps – such as by offering digital versions of gift cards or providing a wider selection for example.


Gift cards represent a fantastic way for firm’s to reward their staff but they should remain responsible when doing so.


Such high levels of financial loss as suggested in the report mean that many businesses may be missing a trick and could be losing out unnecessarily as a result.


Good management across all aspects of business is essential to long term success, and firms are encouraged to consider the options available to them if they feel they are not operating effectively.


Restructuring for example could streamline a firm to ensure that it is operating at maximum strength while this also allows a focus on parts of a business that may not be performing as well as others.


By Phil Smith


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