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If you’ve bought vouchers or gift cards to use as an incentive, you’re technically known as an ‘unsecured creditor’ of the retailer where the vouchers can be redeemed.

Customers who bought gift cards in high street music, film and game retailer Zavvi will have discovered this to their cost. Now that Zavvi is in administration, it will no longer redeem Zavvi gift cards in store, leaving recipients to try and claim a refund in writing from the administrators if they were issued after 27 November 2008. Vouchers and gift cards issued before this date will not be refunded.

Vouchers and gift cards come with a hidden cost to recipients, and to the businesses that use them as an incentive. This article in the New York Times paints a sorry story of consumers in the US, who lost over $100 million last year through  unredeemable gift cards, when retailers such as Sharper Image and Circuit City went out of business.

Increasingly, it looks like gift card sales are being used to prop up failing retail chains, as a means of generating revenue or cashflow without incurring costs.

The article goes on to state research by Consumer Reports, that showed that 25% of people who received giftcards last year had yet to redeem them, with more than 50% of that group having more two or more cards. (“The most common reasons: They didn’t have enough time, forgot about the card; couldn’t find anything they wanted; or the card expired and became worthless.”) How many of these gift cards will never be redeemed, either due to the card expiring via recipient inactivity, or by the retailer going bust?

Non-redemption remains the dark secret of the voucher industry.

Wednesday, January 28th, 2009

New Year’s Revolutions

Categories: Incentives, Motivation


With a New Year it’s inevitably a time for companies to make resolutions and plans for the year ahead.

It’s our our belief that this should also apply to your incentive activity. It’s time to stop doing the same old thing, to carry on doing what you’ve always done. It’s time to look at your incentive program – the aims, the format, the rewards basis, the users – and see what can be done to shake it up.

A reward scheme that doesn’t change will always continue to reward the same people for doing the same behaviours. By adjusting the parameters and realigning the goals you can engage with a different set of users, those who can improve their performance and reap the benefits.

In fact, just the act of making a change can bring results. A well known pyschological effect known as the Hawthorne Effect suggests that any changes in a workplace can result in increased productivity (albeit short-term). This is sometime interpreted as the “somebody upstairs cares” phenomenon, where workers experience a psychological stimulus due to being observed, and a sense of engagement by management.

We believe that companies should regularly tweak the parameters of their incentive – running short tactical campaigns, adjusting the reward criteria etc. – and then monitor and evaluate the results. Reporting and analysis is the missing ingredient of many incentive programmes, but vital in creating a feedback loop to find out what drives performance best. We are constantly looking at ways we can provide ways to represent an incentive campaigns engagement and volume to our clients, but only they can decide what makes an incentive program a success.

Just like you might tweak your keywords in Google AdWords to gain greater page impressions and clickthrough rates for your online advertising, making changes is meaningless without measuring the results. But be careful of false metrics – extra traffic might not lead to additional sales if the users clicking through are not the right kind of audience for your message or services. The same applies with an incentive program: increasing the number of users in an incentive might not necessarily result in more sales or overall performance improvement.

In 2009, it’s time to target campaign effectiveness.

Refocus. Refine. Reaffirm.