Today, besides paper vouchers, which remain popular, there are also electronic gift cards, e-vouchers, voucher cheques, and even voucher codes distributed through text messages. Buying gift cards either for rewarding your employees for their outstanding performance or even for marketing or promoting your business products and services can benefit you in so many ways. Benefits and allowances; Gifts, awards and social events. Dec 25, 2012 - Tips on how to select gift cards and how to give them. Is the cost of the Christmas lunch added to the cost of the gift card - or are they separate benefits? Gift certificates that are redeemable for general merchandise or have a cash equivalent value are not de minimis benefits and are taxable. Employers can use the total cost of the gift as a tax deduction, and employees don't have to declare the cost of the gift as part of their taxable income. Plastic presents: The benefits of giving gift cards. Read our Privacy & Cookie Policy. Once people receive a gift card, they have a choice of what product(s) to redeem it for. Gift giving is an important part of life and a hand crafted greeting card is a gift. All Rights Reserved. Whether you’re on the giving or receiving end of a gift, that gift can elicit feelings of gratitude—it can be a way of expressing gratitude or instilling gratitude in the recipient. LEAF Gift Cards come with the assurance that your gift can only be used towards college savings: no more “college savings” checks that end up paying for groceries. The Benefits of Gift Cards. LEAF Gift Cards are consumer friendly: if for any reason your gift card is not redeemed within 90 days, we'll give you the option of receiving a refund of the full face value of the card. Companies that strive for "meaningful connections" with their customers are likely to have greater customer retention and obtain repeat business, according to Hallmark Business Connections. More likely to improve work performance: Studies show that cash doesn’t improve work performance – gift cards do. Gift cards that are gifted to a non-profit organization are usually used to buy food or other supplies for a charitable purpose, however, some organizations have been known to give these cards to employees as gifts or bonuses. Gift Cards: General-Purpose Reloadable Prepaid Cards: Pros: In a word: convenience. Advantages of Giving Gift Cards Should you give gift cards as gifts? Benefits of Gift Giving. However, such rewards will attract tax and National Insurance Contributions (NICs). During the holidays, it can be easy to lose track of your budget, especially if you have multiple people to buy for. The employers or the management needs to ensure that the employees are always motivated in whatever they do, and one way of motivating and giving morale to your workers is by giving them gift cards. There are 10 core reasons why gift cards are superior to cash incentives – they are as follows: 1. Especially around the holidays. All other trademarks are the property of their respective owners. When a shopper buys a gift card, you have the cash in hand. Yellow PagesTM, Walking Fingers & DesignTM, YP.caTM, YellowPages.caTM, Canada411TM, are trademarks of Yellow Pages Digital & Media Solutions Limited in Canada. Some card issuers require a receipt to replace a lost or stolen card. True Gift Perception – Gift cards are not viewed as a part of a compensation plan. Thanks for dropping by! Mostly, it is tough to select the right gift for a particular person mainly if we really want, they will like our special gifts. Taxable fringe benefits are subject to federal taxes: All Rights Reserved. Information on the long-service or anniversary award. There are three big reasons why brands love giving out gift cards rather than mere codes, and they have nothing to do with the plastic. In 2015, the Irish government announced in the budget that employers could give a gift card of up to €500 tax free to employees. Follow the Canada Revenue Agency (CRA) gift-tax rules and give your employees gifts instead of cash bonuses, and both you and your employee will benefit on your Canadian income tax. Whether giving the reward internally or externally to customers, gift cards offer several benefits over checks and even more benefits over branded merchandise. Universal Benefits: Gift cards combine the benefits of merchandise with the benefits of cash. More discrete: It’s polite to mention non-cash awards. We consider the gift card or gift certificate to be an additional remuneration that is a taxable benefit for the employee because it functions in the same way as cash. There used to be a threshold of $25 to be the maximum amount that could be gifted before having to be taxed, but that is no longer the case. Instead, they're fast becoming a big part of the economy as gift givers and recipients realize the advantages that gift cards have to offer. The creation of a gift card program for your customers can easily translate into higher brand recognition. When giving gift cards, always include a copy of the receipt. The material on this website is provided for entertainment, informational and educational purposes only and should never act as a substitute to the advice of an applicable professional. When you send one of these cards, you are sending an emotional piece of yourself. More Discrete: Society often finds it impolite to discuss cash awards however; conferring gift cards is seen to be more socially acceptable. Receiving a handmade greeting card is like receiving a present. Once thought to be the refuge of last-minute gift shoppers, modern gift cards offer a number of surprising advantages sure to please you and the recipient. Explore. What better way to tell someone you care. Brands like gift cards because . They’re available from a wide variety of companies, they offer the recipient freedom of choice and they can be given to all types of people. Gift cards are a great way to connect your favourite store with new customers. College students are another group of people that gift cards are good for because they often have limited storage space for bulky items. Copyright © 2021 Yellow Pages Digital & Media Solutions Limited. Cash is quickly viewed as compensation and disappears into the family budgeting. 6.39.0.0 (rev 20210309.1113), Easily retrieve their info anytime you need it on any of your devices. Over the years companies have always turned to cash when it comes to giving employees their annual or quarterly bonuses, however many companies are turning to the gift card industry when it comes to rewarding employees and customers/clients. A gift card, or gift certificate, is a type of fringe benefit. Get the latest update from us by subscribing to our newsletter. You give your employee a $100 gift card or gift certificate to a department store. Services and information. Benefits of Gift Cards (And Their Disadvantages) No gifts to return or exchange. 10 Reasons to Give a Gift Card over Cash Trophy Value: Gift cards are seen as being more memorable in creating a lasting reminder of an achievement. For every dollar on a gift card that goes unused, 25 dollars' worth of holiday gifts are returned to stores every year. A gift for a customer can give a company returns far beyond the cost of the present. If you would like to know more on how you can incorporate gift cards and digital e-codes into your company you can contact our sales team on 01709 303 102 or email us at salesorders@svmcards.co.uk. There are different rules depending on the type of gift you give. Rewarding your employees with gift cards is an excellent way to boost satisfaction and productivity in the workplace. Our Privacy & Cookie Policy has changed click here to view our new policy, if you want to hide this message click here, This website is using cookies: We use them to give you the best experience. Gift cards allow your employees the power of choice but with that added trophy value that cash awards don’t give. Companies can also benefit from using gift cards as part of their incentives/rewards and benefits package due to the flexibility, ease of use, and low administrative costs. Fringe benefits are benefits you can give employees in addition to their regular wages. ... $1,950 in the bank and the gift card is added to that money, she will be over the resource limit and will lose her SSI benefits. Gift cards are hotly desired during the holidays. With gift cards, depending on the program selected, the company may be able to recover money spent on gift cards that never got activated. A gift card or cash equivalent is now taxable, regardless of the amount. They win when you buy one, in a number of ways. The same thing would happen if Mary received a cash gift instead of a gift card. But before you start doling them out, you need to know …. Domestika is a community for creative people. NEW IRS ADVICE ON TAXABILITY OF GIFT CARDS BY MARILEE BASARABA, FSLG SPECIALIST (PACIFIC) Many employers give employees birthday or holiday gifts. Reduce Risk of Fraud Another reason to provide gift cards is to give your customers a greater sense of security. Gift cards are great for people who are difficult to shop for or who have specific needs. Gift cards allow them to choose how they spend their money. The lack of reuse leads a lot of people toward reloadable prepaid cards instead. That freedom of choice is what separates gift cards from pure merchandise or travel and provides Do you ever worry that your favourite book shop or record store might not attract enough clientele? Schedule a Free Makeover with a Sephora Gift Card. Certain forms of it, like formal volunteering, can help you create a winning resume or application for something. Today, people give gifts and presents for special ceremonies or events, weddings and birthdays. Gift Card funds do not expire, there are no fees after purchase, and Gift Cards can be replaced if lost or stolen*. Because gift cards are essentially the same as cash, they are considered an easy item to be accounted for and, therefore, taxable. If you wish to help fund a 529 college savings plan , the $15,000 annual gift limit comes back into play. People love to receive and give gifts mainly on special occasions like weddings, birthdays, Christmas, anniversaries and any other holiday seasons. Click here if you are happy to receive all cookies on this website. Receiving a card makes us feel important, loved and closer to those who take the time to convey these small gestures. [Gift-giving] taps into how we want to connect with that individual.” Gifts, awards and long-service awards Rules and policy for gifts and awards. Long-term positive feelings towards organisation: Gift cards reinforce positive associations with sponsoring organisations.