Incentive - March 2008 - (Page 43)

to gift cards in various states, looking at the retailer card or supplier card and saying, how long is it redeemable for? And does it pose any fees for non-use, and that kind of thing. Disney: We strongly encourage questions from planners. For example, they need to consider flexibility and the scope of purchases that can be made through the gift card program. Planners should also be extremely thorough because of the diverse laws and regulations that can vary by state. Hallmark Insights: The one item that I would add is we are getting questions from people who are designing the program, in how to measure the effectiveness of the program, of how to demonstrate ROI, so that is another key component with gift cards, because they get such great participation in the program. The program, if it is well designed, greatly achieves the return-oninvestment which they can take to the CEO or the CFO and say, “Look, this program was terrific. It boosted sales, or it led to improved retention or lower turnover in my employee ranks.” Whatever the case may be. So we deem that a key metric as well. Going back to our gift card report from August, it showed that gas cards, went up from 18 percent in 2006 to 30 percent in 2007—and that was before gasoline was reaching $3 per gallon. Are you seeing a lot of gas cards at Hallmark Insights, and are any of you seeing any effect from this? Hallmark Insights: We have seen an increase in the number of corporations that do want to include gas cards as part of their offer, and again, we have 350 great brands that we work with, and so our clients can mix and choose. Sometimes they want to stay away from the gas cards because they deem it a little too close to cash, and as you know, most corporations want to stay away from cash, but with gas continuing to go up, they are saying, “Well, let’s add it and see what percent of the spend moves from a more tangible product and service—or a restaurant—to the gas card category,” and we can share that with them, and it has been a significant part, but it hasn’t moved the needle as much as we thought, and in turn our clients thought, because, again, it is a personal award. You get to choose the retailer of your choice, so if you have been saving for a particular item, be it a Disney Vacation or a new fly fish-rod, or a new big-screen TV, you are still going to save for those types of occasions and put it to something that is memorable to you, the employee. Gas cards have been added to more of our programs, but it hasn’t moved the needle as much as we thought. One thing that question leads into is the recession that people are talking about a lot more. Is this something you are hearing about? What is your outlook for the next couple of years? Is it changing? What effect, if any, are you seeing from the economy? JC Penney: I don’t think we are seeing anything yet from the business perspective, but I don’t run as much of the consumer business. Hallmark Insights: In the b2b space, some of our clients are wanting to double down. They are saying, “I can’t lose my best team members right now. I have got to retain them. I need to really motivate my sales team, because it is really going to be tough to sell XYZ in the marketplace,” so if anything, they are adding to their programs, which we think is a great strategy, but again I can’t speak to the consumer buying from a particular retailer. Bass Pro: Our experience so far has been that it has been very strong. I think that people feel that they need to do these incentives in tougher times, but surprisingly enough, even on the consumer side, the gift card business has been extremely strong, and we don’t really anticipate the economy will affect it that much. With what we have seen so far, with all the different programs, whether it is third party or our own retail stores, it has been very, very strong, and we have not seen any downturn up to this point. the sites that are now popping up or have been around, some of them for over a year, that buy and sell gift cards, buy and trade gift cards. Do any of you ever check these sites to see if your cards are being traded, and if so, to see what the perceived value is? What is your take on this whole phenomenon? JC Penney I don’t. At least from the b2b side we are not checking that. We are certainly not agreeing to participate in them, but you can’t really—it is a full-time job to really police that. The perspective of the incentive industry, on the whole concept of unwanted cards or unredeemed cards is, solid incentive programs really are effective when the right choices are given to the participants. I don’t think any one of us want the gift cards to go unredeemed, because it would really mean it was a bad choice for the program. As business-to-business experts, we try to work with our companies to find products that fit our audience. We want that program to be successful, and it won’t be if the reward isn’t deemed appropriate. Q Q Q Okay, but if you view the consumer side as kind of the barometer for the popularity of the card on the incentive side, if it is not being redeemed on the consumer side, then maybe it becomes less appealing for corporations to consider? Q A new topic that is receiving lots of attention now is breakage and all of JC Penney: One of the things to think about is that a large percentage of the b2b programs that use the JC Penney card involve choice, so we are not the only card. I think part of the reason that the redemption rate on the b2b side is so high in incentive programs is that recipients can often choose their reward, and so they are choosing a gift card for a specific reason; they like the retailer, they have something in mind. I think that is why the redemption rate is higher. Hallmark Insights: I echo exactly what Cindy said. I, the recipient, have chosen the retailer that I want to buy products and services from, so I self-selected—be it JC Penney, Bass Pro Shops, Omaha Steaks, Disney—versus me receiving a particular incentivemag.com | March 2008 | Incentive | 43 http://incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - March 2008

Incentive - March 2008 Contents Editor’s Note: Delivering on Diversity In The News Cover Story: Leveraging Diversity in the Workplace Incentive Interview: Paul Levesque on Why Awards Fail Case Study: AEIS’ Max!-imum Incentive Program Mine Employees’ Creativity with Innovation Incentives Incentive Must-Reads The Third Annual Gift Card Roundtable My Turn: Motivation or Bribery? Everybody Get Together In Her Shoes: Why Bosses Should Be Flexible Incentive Primer: Passport Problem-Solving potentials Here and Now Is CES Electronics Heaven? China and Crystal: More Than a Pretty Face Travel News Florida: What’s New on the Beach? Smooth Sailing for Incentive Cruising Come To Hawaii And Take It Fast Last Word: But Enough About You

Incentive - March 2008

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