Gift cards are broken and losing effectiveness, but thankfully there’s a better way
Key Points
- Gift cards in their current form are broken (~⅓ will never be redeemed)
- New product launch: gift / card / charity optionality. 80% redemption rate achieved in beta, with remainder distributed to charity. Zero waste.
- Added as a free feature for platform customers to use for work anniversaries, birthdays and employee / customer recognition
Gift cards, we need to talk
In their current form, gift cards are losing effectiveness and have become a proverbial cash cow for retailers and providers, with an unspoken promise that many will never need to be fulfilled. But for employee and customer experience professionals, there truly is a better way to reward and say thank you and the solution is surprisingly simple.
If you regularly send gift cards, stats show that around one in three will never be redeemed. At $50 per card, that’s a whopping $17 on average being swallowed by the provider. In a nationally representative survey earlier this year by Finder.com.au, it was also revealed that the average Australian has $95 of gift vouchers languishing in drawers – equivalent to some $1.8B across the country.
The proliferation of gift cards in recent years is understandable. The typical ‘catch all’ corporate gifting process is terrible, yet every company does it. It’s normally a burden to be the gift giver in an organisation, as people have different preferences and personal situations, including health and cultural beliefs, meaning gifts often miss the mark – especially at scale. Compound this with a pandemic, the move to remote work and now the hybrid of home and office, it’s not surprising that over the past few years – particularly in the wellness and vibe space – that we’ve seen countless examples where extremely low redemption rates are the norm, or physical stuff – while well intentioned – quite simply ends up in landfill.
The time honored saying goes it’s the thought that counts, but we’re drawing a line in the sand to massively improve the experience – for both the giver and the recipient – and to stop needless waste. While consumer laws have been increasing expiration periods for gift cards, up to five years now from issuance in the United States, it made us think back to first principles – fundamentally, do people even want what you’re trying to give them?
Solution: choice = no waste
It turns out the solution is quite simple.
In response to customer requests, at the end of last year we built and piloted a gift tool to pair with the ~400 charity partners already on our platform.
The main premise was to give recipients a choice – and if they don’t want or need the gift card / physical gift / hamper / <insert yet another branded thing>, then the amount goes to charity instead.
The results have been staggering: by giving choice and introducing defined time periods (with appropriate reminders) selection rates are through the roof at ~80%, with zero waste as any remaining amount is distributed to charity. It’s a win for you, a win for recipients and a win for our planet.
At this point it’s worth mentioning a huge difference between ourselves and the majority of platforms out there that distribute to charity – we don’t take a cut, or charge a percentage of donation, and there’s no platform fee for charities to be listed as a recipient. 100% of your intended donation goes there – yes, you read that correctly, the full amount goes there without a cut being taken. Hallelujah.
EOY customer and employee campaigns, putting theory into action
At the end of last year we launched a no waste gifts micro site to extend the offering and get more users to test mixing donation and gift optionality. There were a lot of highlights, but two campaigns across both the customer and employee giving spectrum are particularly worthy of diving in deeper:
Google X Good Thnx Customer Campaign
We’ve worked with Google on the charity side for five years now. Sending holiday gifts to thousands of customers was creating a burden for administrative staff and there was inconsistency throughout teams on the type of gifts given. Finding a gift that would suit everyone, while also aligning with the Google brand proposition, was almost impossible and we would still need to account for the waste this would generate.
For the Australian campaign across their large advertising customer segment, we worked with the exceptional cellar door team at leading local wine producer Penfolds to give people optionality of wine and donation. Recipients had choice between premium red and white wine varieties and six charities that were selected from a subset of foundations approved by Google, including Children’s Ground, Global Sisters, Lifeline Australia, Rainbow Families, RSPCA Australia and Save The Children.
This campaign achieved our best ever selection result for physical gifts with recipients also electing to spread donations to all charities in the campaign. If no selection was made the gift value still went to charity, which is an infinitely better process than sending hundreds of bottles of wine to people that may not drink for health, religious or other reasons.
Envato X Good Thnx Employee Campaign
In the grand scheme of things, it had been a good year for Envato. The leadership team recognised that while they have so much to be thankful for, others in the community had not been as fortunate and wanted to facilitate a way for the company to add to its giving at the end of the year.
One of our favourite campaigns from last year, we worked with the team to curate causes that combined specific and incremental impact measures to communicate effectiveness, providing a powerful feedback loop throughout the campaign.
Each employee received an amount to allocate to a preferred charity, or split evenly across Envato’s allowlist of charities that were selected to align with their mission. Donations contributed to over 7000 meals for the homeless through OzHarvest, 800 trees planted through Carbon Positive Australia and 200 books gifted into the hands of children in remote communities through the Indigenous Literacy Foundation.
The engagement was incredible, with 78% of employees selecting a charity and the remaining 22% split evenly across Envato’s allowlist.
Why Give?
People care deeply about where they work and what their impact is and it’s been shown that companies that integrate corporate citizenship into their business have 2.3x the employee retention and an increase of 29 percent in new hire commitment.
Thinking more about how and where to give back delivers a competitive advantage in how you retain both talent and customers.
It really aligns with what people professionals have been sharing with us from their culture surveys – that employees not only want to be better recognised for their work, they want the recognition to be timely.
Timely and specific recognition only has to deliver a 1-2 hour uptick in productivity for the average employee over an entire year to pay for itself, so create a culture of early gratitude to get ahead of engagement and retention issues before they start.
You’ll also save a lot of time and money – think rehiring – by having good people not leave prematurely. People and HR teams are often overwhelmed with the pressure of talent acquisition, but imagine if the company didn’t lose so many people in the first place.
In short, keep your best people by delivering recognition that doesn’t go to waste. By appreciating people you’ll improve culture, engagement and ultimately, retention 🙂
Where to from here
From today we’re taking our gift tool out of beta and making it available for one time campaigns, as well as adding it as a free feature for platform customers, to use for work anniversaries, birthdays, end of year employee / customer gifts and well, for any reward.
With hundreds of charity and retail partners, you can be sure to find alignment or we’ll add your preferred options. Pay it forward and stand for something more by rewarding your people, with purpose.
Send to 100+ recipients in a year? Schedule a demo
Individual and small group thanking? Join wait list (coming soon, in time for EOY)
Ps, there’s a Slack app for that: Read more
How it works
Step 1: Choose some gift / card options and add charities that align with your business. We can also curate gift options specifically for you – whether it’s a gin gift pack, something alcohol-free, ethical chocolate, the ultimate her or his gift card / charity mix, or even add your own local favourites – we’ve got you covered
Step 2: The recipient chooses a gift for themselves, or if they don’t want / need anything, they can give the equivalent dollar amount to a charity of their choice. If the recipient doesn’t choose anything after 30 days, the original amount goes to charity, resulting in zero waste!
Step 3: We take care of everything including campaign emails, reminders, ordering, sending and charity distribution. With one in ten addresses typically being wrong in databases, with this approach you’ll never worry if postal addresses are up to date again, as we confirm with each recipient, prior to distribution.