Glossary Terms
Plum - Rewards, Incentives and Payouts Platform
Table of contents
Corporate Gift Card
Corporate gift cards have become a popular way for businesses to show appreciation to employees, clients, and partners. These gift cards offer a versatile and convenient gifting solution, allowing recipients to choose their preferred items or experiences.
Understanding how corporate gift cards work can help businesses effectively utilize them as a gesture of gratitude and build positive relationships with recipients.
What is a corporate gift card?
A Corporate gift card is a specialized prepaid card issued by companies for the purpose of providing employees, clients, or partners with a means to make purchases. These cards are distinct from regular gift cards as they are tailored for corporate use and often carry the company's branding.
How do corporate gift cards work?
The corporate gift cards work as:
1. Issuance and customization
- Companies purchase bulk quantities of gift cards from retailers or financial institutions.
- Customization options include adding the company logo, personalized messages, and branding elements.
2. Loading and activation
- Companies load a predetermined monetary value onto each card.
- Activation typically occurs either online or through a designated platform.
3. Distribution
- Businesses distribute gift cards to employees, clients, or partners as rewards, incentives, or holiday gifts.
- Physical cards are often mailed, while digital ones can be sent via email or through an online portal.
4. Usage and restrictions
- Recipients can use the gift cards to make purchases at specified retailers or for a variety of goods and services.
- Some cards may have restrictions on where they can be used or limitations on certain products.
5. Tracking and reporting
- Many corporate gift card programs offer tracking features to monitor card usage and remaining balances.
- Reporting tools provide insights into the effectiveness of the program and budget management.
6. Expiration and fees
- Gift cards may have expiration dates, and recipients are encouraged to use them before the specified timeframe.
- Some cards may incur fees for inactivity or other transactions, which should be communicated clearly.
7. Tax implications
- Companies need to consider tax implications when distributing gift cards, as they may be subject to taxation.
- Recipients may also need to report the value of the gift cards on their income taxes.
How can I launch a corporate gift card?
Launching a corporate gift card involves a few strategic steps:
- Define your purpose: Decide if the gift card will be used for employee rewards, customer loyalty, promotional campaigns, or client appreciation.
- Choose the type of card: Select between physical or digital cards, and decide whether it will be a closed-loop (usable only at your brand) or open-loop card (usable at multiple merchants).
- Select a provider or platform: Partner with a reliable gift card vendor or technology platform that offers customization, distribution, tracking, and reporting features.
- Design your card: Customize the card with your company branding, logo, and message. Some providers offer design support.
- Set value options: Determine fixed or variable card denominations based on your audience and use case.
- Plan distribution: Decide how and when you’ll distribute the cards—via email, SMS, printed cards, or in bulk through an automated platform.
- Integrate with tools: If needed, integrate your gift card system with CRM, HRMS, or marketing automation platforms for seamless management.
- Ensure compliance: Consult legal or finance teams to comply with taxation, expiration, and regulatory requirements.
- Monitor and optimize: Use analytics to track redemption rates and effectiveness, and adjust your strategy as needed.
What types of gift cards are typically offered as corporate gifts?
The various types of gift cards offered as corporate gifts are as follows:
1. Retailer-specific gift cards
- Often companies choose popular retailers such as Amazon, Starbucks, or Walmart for broad appeal.
- Recipients can use these cards to purchase a variety of products based on their preferences.
2. Restaurant and dining gift cards
- Gift cards for restaurants or dining establishments are common corporate choices.
- They provide employees or clients the opportunity to enjoy meals at specific locations.
3. Entertainment and media gift cards
- Companies may opt for gift cards related to entertainment, such as iTunes, Netflix, or Spotify.
- Recipients can use these for streaming services, music, or movie purchases.
4. Travel and accommodation gift cards
- Gift cards for airlines, hotels, or travel agencies are suitable for employee incentives.
- They can be used to offset travel expenses or for booking accommodations.
5. Prepaid debit or credit cards
- Some companies offer generic prepaid debit or credit cards.
- Recipients can use these cards wherever debit or credit cards are accepted.
6. Experience and activity gift cards
- Experiential gifts like spa days, adventure activities, or concert tickets are popular.
- They provide a unique and memorable experience for the recipients.
7. Technology and electronics gift cards
- Gift cards for electronic retailers or tech companies cater to tech-savvy recipients.
- These cards can be used to purchase gadgets, accessories, or software.
8. Subscription services gift cards
- Subscription services like meal kit deliveries, magazine subscriptions, or fitness memberships.
- They offer ongoing enjoyment beyond a one-time purchase.
9. Home and lifestyle gift cards
- Gift cards for home improvement stores, furniture shops, or decor outlets.
- Recipients can use them for enhancing their living spaces.
How to use a corporate gift card?
Using a corporate gift card is typically straightforward and works much like any prepaid or store card:
- Check the balance: Most cards come with instructions or a link to check the available balance online or via phone.
- Use at eligible locations:
- For closed-loop cards, spend it at the specific brand or store it was issued for.
- For open-loop cards (e.g., Visa, Mastercard), use it anywhere those networks are accepted.
- Apply at checkout:
- Online: Enter the card number, expiration date, and security code at checkout.
- In-store: Swipe, tap, or hand it over like a debit or credit card.
- Combine payments if needed: If your purchase exceeds the card balance, ask to split the transaction with another payment method.
- Track usage: Keep receipts or log into your account (if available) to track remaining balance and usage history.
What are the limitations of a corporate gift card?
The limitations for using a corporate gift card are as mentioned below:
- Specific retailers or brands: Some gift cards are limited to specific retailers or brands, restricting where they can be used.
- Product or service restrictions: Certain gift cards may have restrictions on the types of products or services they can be used for.
- Expiration dates: Many corporate gift cards have expiration dates, requiring recipients to use them within a specified timeframe.
- Inactivity fees: Inactive gift cards may incur fees, especially if there's no usage within a certain period.
- Non-transferable: Some gift cards may be non-transferable, meaning they can only be used by the person to whom they were issued.
- Limited geographic use: Certain gift cards might be limited to specific geographic regions or countries, impacting their usability.
- Single or multi-use: Some gift cards are designed for a single-use transaction, while others allow multiple transactions until the balance is exhausted.
Explore Xoxoday's Rewards Automation Platform
