Incentive - February 2009 - (Page 56) ‘My job is done. Program complete. Victory!’ ” she says. Putting the card in the hands of the winner is just the beginning, because any number of things can happen after that point that leave a bad taste in the mouth of the incentive winner—and reflect back on the sponsoring company. The possibilities range from the person misplacing the card, only to find it and realize they can’t use it because it has expired, to ordering a product online that arrives broken and having to go through a big hassle with the retailer to get it replaced. “You want to make sure the process is completed and they redeem the card for something successfully. Otherwise, they haven’t really gotten the benefit you hoped for,” says Smith. It is the awarding company’s responsibility to know the rules involving the card’s use. Is there an expiration date? Do they tally dormancy fees (if the recipient doesn’t use the card for a certain length of time, the loaded dollar amount decreases)? “These are the things you want to be aware of so you don’t naively create a challenge for your incentive winner,” explains Smith. Encouraging quick use of the card is the best way for the company to ensure that the recipient has a good experience, according to Saari. “It both capitalizes on the immediacy of the award and overcomes a lot of the noise around issues like when does the card expire, and additional fees that may be assessed for not using the card during a certain time period,” she says. Also, in the current environment, the recipient can take advantage of retailers hungry for business and offering more bang for their buck. “The end user may take their ANNUAL GIFT CARD $100 gift card into a BUDGETS store where consumer promotions Less than $1,000 . . . . . . . . . . . . . .19.8% underway actually give them the ability $1,000 to $9,999 . . . . . . . . . . . . . .32.4% to get $200 worth of $10,000 to $24,999 . . . . . . . . . . . .13.2% merchandise,” says Saari. $25,000 to $49,000 . . . . . . . . . . . . .8.2% Of course, achieving a good experi$50,000 to $99,999 . . . . . . . . . . . .11.5% ence rests on a $100,000 to $249,999 . . . . . . . . . . .7.1% usable card. “Recent bankruptcies have $250,000 to $499,000 . . . . . . . . . . .2.7% prompted the explosion in popularity of $500,000 and up . . . . . . . . . . . . . . .4.9% prepaid bank cards. Source: Incentive Gift Card IQ Survey 2008 It drove a lot of people to pick something that might have a little longer staying power and perhaps less risk than a single retailer,” says Smith. Either way, it is more imperative than ever before to be cautious and do your homework. “There are pros and cons in choosing a prepaid card supported by a financial institution,” advises Smith. “You want to make an informed decision.” TAX WISE “Recent bankruptcies have prompted the explosion in popularity of prepaid bank cards. It drove a lot of people to pick something that might have a little longer staying power and perhaps less risk than a single retailer.” 56 INCENTIVE FEBRUARY 2009 | SPECIAL ADVERTISING SECTION Knowing the tax laws regarding gift card usage in incentive programs also should be taken seriously. “This is a piece of advice I put a big star on because it is frequently overlooked,” Smith says. There are certain types of incentive programs that have some federal tax protections for the company who offers them, but there are specific guidelines that must be followed. “Otherwise, the IRS can come back and impose an income tax liability on the company or the employee. Be aware that there are laws and guidelines around this,” says Smith. Whatever you do, keep everything—even incentive awards—in perspective. Says Smith: “Don’t over correct and go in the other direction now, thinking, ‘Sharper Image declared bankruptcy, so I can never use gift cards again.’ Seek out information, and don’t be bashful about asking for help and guidance.” I
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