Buyer’s guide to electronic voucher motivation cards

In a climate of austerity, with pay freezes showing little sign of thawing and bonuses still in short supply, employers have to find innovative and cost-effective ways to reward and motivate their staff, and this is one area where motivation vouchers have come into their own.

The facts

What are electronic voucher motivation cards?

They are paper-based vouchers or plastic cards loaded with a cash value that can be spent at a single designated retail outlet or at multiple retailers. Travel and experience vouchers are also available.

Where can employers get more information?

The UK Gift Card Voucher Association on 0870 241 6445 or at 

Who are the main providers?

Some of the biggest players include Argos, Asperity Employee Benefits, Boots, Edenred, Grass Roots, LogBuy, Love2reward, Next Jump, Next Retail, P&MM, Personal Group, Projectlink Motivation, Red Letter Days, Sodexo, and The Voucher Shop. A number of retailers also provide motivation vouchers, including American Golf, B&Q, Debenhams, Harvey Nichols, House of Fraser, John Lewis, Marks and Spencer, New Look, Sainsbury’s, Thomas Cook, Tesco, Waitrose and Waterstones.

The stats

19% the growth of corporate sales of closed-loop gift cards (UK Gift Card and Voucher Association’s Q1 2013 Commentary, April 2013)

22% the percentage of employers that offer retail or leisure vouchers on a voluntary basis (The Benefits Research 2013, Employee Benefits, April 2013)

5% the share of the market represented by digital vouchers, but with increased use of mobile technology this is expected to rise significantly over the next few years (UKGCVA)

Vouchers can be offered in paper format or as an electronic gift card that can be loaded with a monetary value and spent at one, or a selection of, retailers or leisure outlets.

As figures from the UK Gift Card and Voucher Association’s (UKGCVA) Q1 2013 Commentary, published in April 2013, reveal, employers are increasingly recognising the value in these products, reflected by a 4.6% rise in like-for-like corporate sales of gift cards and vouchers for January to March 2013.

There are three types of electronic gift cards: open-loop cards, which use payment networks such as Visa or MasterCard and are accepted at multiple retailers; closed-loop cards, which are redeemable at one specific retailer; and restricted-use cards, which can be used at a selected group of retailers, and which are now one of the most dynamic types of gift card in the market.

Flexible rewards

Motivation vouchers are popular with employers for a number of reasons. They are flexible enough to be offered to staff for specific rewards, for example for loyalty or long service, for hitting sales targets, or exceptional performance, and are ideal for offering in times of financial austerity, when pay rises are minimal or non-existent. 

Vouchers offer ease of administration and delivery, and cost-effectiveness by not increasing payroll costs. And because they provide an immediate reward that employees may be more inclined to spend on unexpected treats or larger purchases, they can also boost employee engagement.

In the current economic climate, giving employees an opportunity to save money on essential purchases, such as weekly grocery shopping, makes an immediate difference to their day-to-day expenditure and makes the voucher incentive tangible.

Staff motivation

As a motivational tool, the traditional paper voucher is being superseded by the electronic card, which offers employers a number of advantages, including the option of being branded with the organisation’s name and logo, and the fact that they are reloadable and so reusable, reducing administration costs.

Employers can choose to give their staff gift cards with no pre-assigned monetary value, but with automated remote activation and reloadable functionality, further enhancing their cost-effectiveness and speed of delivery. 

Electronic cards also provide an extra element of security. Employees can activate their card when they receive it, and if the card is lost, depending on the provider, there may be an option to report the loss and secure the card by blocking it to prevent anyone else using it.

Some electronic vouchers can be linked to an online reward account, which employees can access to check their balance and then decide whether to spend or save their credit.

With more and more people using mobile devices, such as smartphones and tablets, mobile technology is set to revolutionise the way gift cards and vouchers are delivered. Digital delivery currently makes up just a small part of the electronic motivation voucher and card market, but it is expected to grow considerably in the next few years.