Inside Giftbit: Why Gift Cards Make the Best Incentives

📌 TL;DR 

 Pavlov was right → incentives work
 Gift cards are the best incentives → thanks to speed, choice, emotional impact.
 The game has changed → automation and wallet integrations are essential 
 If we know, you know → Giftbit shares every detail of your program
 Our competition doesn’t want you to know → they purposefully build in friction to maximize revenue. We don’t.
 
🎥 Watch my full interview where I share my opinions on the industry 

The science (and simplicity) behind why digital gift cards work

Everyone uses incentives.

Parents use them to motivate kids, teachers use them for learning outcomes, managers use them to boost performance, and businesses use them to drive revenue. The reason is simple: incentives give people a reason to act, and they feel better than penalties. 

That’s what makes them so powerful. Whether you’re trying to get someone to adopt a new behavior, fill out a survey, or close a sale, the right incentive can be just the right nudge that tips the scale.

One of the things I love most about working at Giftbit is that we get a front-row seat to how companies of all sizes use incentives to drive measurable, positive, lasting results. Incentive programs are an investment, and the results that a business gets should far outweigh the cost of that investment.

Old school rewards

Twenty years ago, rewarding someone meant mailing them a physical item. It was slow, inconvenient, and usually done for major milestones like Salesperson Of The Year. Today’s businesses need to reward smaller, more discrete actions like completing a survey, taking a training course, or referring a friend. That’s where digital gift cards really shine.

The three big advantages of digital rewards 

Gift cards are the best incentives for three main reasons: choice, speed, and stickiness.

1. Choice → makes them personal

Studies show that when you choose a gift for someone, there is some value lost in the process. You guess what you think the recipient might like, but you’re rarely going to hit the nail right on the head. 

A gift card solves this problem by letting people choose exactly what they want. That’s a big reason gift cards have remained the most popular holiday gift for nearly two decades.

Better still, some programs even let recipients choose what type of gift card they want from a full catalog of options, whether that’s one from Amazon, Apple, or hundreds more. That’s a level of flexibility you can’t physically wrap and deliver in the mail.

2. Speed → lets you deliver them immediately 

Pavlov showed us that rewards are more effective when they immediately follow the desired behavior. Gift cards and prepaid cards are more impactful when they’re delivered as close to the action as possible. 

If you take a survey and a gift card arrives a week later, the connection is weak. 

But if that gift card hits your inbox a minute after submitting your answers, you’ll remember who gave it to you and why, and you’ll be more likely to repeat the desired behavior in the future.

3. Stickiness → makes them memorable 

Two-thirds of people who receive a gift card from a company remember why they got it, and what they redeemed it on. They create lasting, positive associations with your company.

And there’s a bonus: when people receive gift cards as a bonus at work, they tend to talk about it. People will be excited to share details about the barbecue they bought with a gift card from work. Incentives help spark goodwill and build strong, lasting impressions.

☝️ A case in point

Here’s an example that sticks with me: one time I used airline miles to redeem a TV and a steam cleaner from a catalog. When the TV arrived, it was cracked, and the cleaner was last year’s model. I couldn’t use the TV, and I wasn’t excited about the cleaner. That single redemption experience actually ended up reversing a lot of the goodwill I had toward that airline.

Contrast that with the time I received a $1,000 gift card from an employer. I bought a bike and trailer for my newborn son. I still remember every detail of that experience: who gave it to me, the company, the moment, riding with my son. That’s the power of a good incentive.

The difference? Choice. Immediacy. Emotion.

Reshaping redemption with frictionless wallet integration

The convergence of technologies like the Apple, Google, and Samsung Wallets with payment instruments like our prepaid Visa^Ⓡ is reshaping how people redeem rewards. We're embracing that shift with innovations where your recipients are not required to download an app or give extra information. They can simply add the reward to their wallet and start spending.

This is the kind of frictionless experience users now expect. And it’s not just faster. It’s better. Personal, instant, and easy to use. That’s the future of rewards.

What our competition doesn't want you to know

Many gift card companies, including many of our competitors, purposely build in friction in the reward redemption process in order to maximize their breakage revenue stream. (They make more money if your recipients don’t use their rewards). So, when you ask what happened with your sent rewards, they may be cagey about sharing that information.

We fundamentally disagree with this tactic, because it's bad for the long term success of the program. At Giftbit we do not optimize for breakage, and we take special care that the recipient experience is smooth and effective.

The bottom line: digital incentives should be simple

When done well, incentive programs don’t just drive results. They build lasting relationships. We’re on a mission to make rewards easy, so our clients don’t need to juggle currencies or navigate complex onboarding. Just bring us your use case, and we’ll handle the rest.

I like to think of it like a backyard BBQ. You can try to compel your neighbors to come, or you can cook something so good they want to come. At Giftbit, we’ve put together the best “gift card meal”: a catalog, support, and simplicity that makes people want to join our party.

If you’re thinking about incentives or looking to make your programs more impactful, let’s talk. We’d love to help turn your ideas into results and show you what great looks like.

– Nat

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