🔎 Article at a glance 🔍
Based on new IRF research, incentive program owners should focus on:
Prioritizing digital reward delivery to reduce friction and overhead
Designing programs that scale efficiently as participation grows
Investing in technology that supports automation, tracking, and gift card fulfillment
Offering reward options that remain broadly appealing across diverse audiences
Incentive trends are always evolving. If you’re currently mapping out your incentive strategies for the next fiscal year, you know the landscape is shifting. Between fluctuating economic signals and the ever-evolving expectations of employees and customers, "business as usual" isn't an option.
Studies from the Incentive Research Foundation (IRF) regularly provide a vital roadmap for gift card incentive program owners.
Its latest, the Industry Outlook for 2026: Merchandise, Gift Cards and Event Gifting, reveals a unique "mixed" climate for both European and North American markets: strong optimism alongside cost pressures and tighter scrutiny of spend.
Backed by this research, here's the incentive trends to understand as you plan for 2026. 👇
The headline from the IRF is clear: the incentive industry remains resilient. Over 90% of respondents in both North America and Europe expressed a positive outlook for 2026.
Organizations continue to recognize how effectively incentives can drive performance, even when broader economic conditions remain uncertain.
But that optimism is paired with growing cost pressure. While many organizations expect their incentive budgets to increase, the IRF notes that these increases are generally aligned with inflation rather than representing meaningful real growth.
At the same time, participation in incentive programs is expanding. In North America, 65% of programs expect the number of incentive recipients to grow in 2026, with European programs showing similar momentum.
The takeaway: Program owners are being asked to support more participants without proportional increases in purchasing power, placing greater emphasis on efficiency, scalability, and perceived value.
So to succeed in 2026, you’ll need to do more with the same. This means moving away from "fluff" and focusing on scalable, low-overhead rewards (like bulk digital gift cards + revenue sharing) that maximize the perceived value for the recipient without inflating your administrative costs.
Gift cards remain the most widely used reward type across incentive programs, and their role continues to expand.
Specifically, the IRF reports that gift cards are increasingly used in event gifting (surpassing merchandise as the most commonly used event reward). And that's largely due to increased flexibility, ease of fulfillment, and broad recipient appeal.
Dining leads: Dining gift cards rank as the most popular branded gift card category in North America, while online-only retailers remain very popular, especially in Europe.
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Increased use: Nearly 70% of North American organizations and just under 60% of European organizations expect to increase their use of all types of gift cards in 2026.
The takeaway: When organizations face cost constraints and operational complexity, gift cards offer adaptability and choice that physical rewards cannot consistently match.
The IRF study shows that program owners are becoming more deliberate in how incentive dollars are allocated.
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While average per-reward spend for both merchandise and gift cards has increased year over year, organizations are paying closer attention to how rewards are distributed across participants.
This reflects a broader focus on maintaining engagement across programs as participation grows, rather than concentrating rewards narrowly.
In other words, consider using smaller but more impactful incentives throughout the year. Companies are shifting to rewarding more people more often rather than giving a massive reward to just a few top performers.
The takeaway: Incentive strategies are increasingly designed to balance reward value, reach, and sustainability as programs scale.
Reward budgets might be flat, but technology budgets are on the rise.
62% of North American organizations expect to increase their program technology spend.
63% of European organizations are following suit.
Smart companies are realizing that the delivery of the reward is just as important as the reward itself. Manual fulfillment, spreadsheets, and physical shipping are being replaced by automated gift APIs and integrated gift card platforms.
The takeaway: More efficiency and automation is the only way to scale a program when the headcount of participants is growing but the administrative staff is not.
Historically, there's been a gap in how European and North American companies approach incentives. But the 2026 Outlook shows that gap is closing.
Program stability: The research indicates continued investment in ongoing incentive programs rather than short-term or experimental efforts.
Digital preference: Both regions show strong reliance on digital gift cards and online retailers as core reward options.
The takeaway: If you are a global organization, this is great news, as it's now easier to standardize reward strategies and catalogs across regions.
The 2026 IRF Outlook suggests that success is becoming less about what is rewarded and more about how programs are designed and delivered.
To keep up and succeed in the coming year, program owners should:
Prioritize digital-first: Eliminate the costs of shipping and storage by leaning into digital gift cards.
Focus on "The Middle": Use smaller rewards more frequently to engage a broader segment of your audience.
Invest in automation: If your participant count is growing, expect your manual processes will break. Use the 2026 tech budget to improve gift card integration into your existing tech stack.
Align with values: Recipients are looking for rewards that help with everyday life—think dining, groceries, fuel, and online essentials (bulk Amazon gift cards are always a popular choice).
All said, the 2026 outlook for incentive trends is bright. But it requires a sharper pencil and better tools.
Ultimately, to succeed, you'll want to find a gift card distributor built to help you navigate exactly these types of shifts, ensuring you deliver the incentives your recipients want with the automation your budget requires.
And overall, organizations that pair flexible reward options with efficient delivery systems will be better positioned to meet rising expectations while managing cost pressure.