Skip to content

Why Choose Tangible Gifts Over Cash?

Written By: Recognition Consultant Carl Bonura

Updated in June 2023

Overall, research has shown that people respond more positively to and are more motivated by tangible gifts than cash bonuses or gift cards (gift cards are cash equivalent). You receive a greater impact for less money. There are many drawbacks of utilizing cash or cash equivalents while there are multiple benefits of providing tangible merchandise awards as part of a reward program.

Benefits of Tangible Award

  1. The dollar amount spent or value assigned to an achievement or milestone is hidden. Keeping the cost of the merchandise award hidden from your recipients often results in employees assigning a higher perceived value. Many achievements and milestones have a large impact on your organization and when a person receives a tangible award, he or she will not know the monetary value assigned to this achievement.
  2. Tangible awards may include the cost of shipping in the contiguous United States in the cost of the award collection. Your recipients will not have to go out of their way to place an order and pick up their reward at a retail store. Everything is taken care of for them by our Account Management Team.
  3. In many cases, no personal income tax is applied to a merchandise award. Tangible awards are not necessarily subject to personal income taxes so there is no need to “gross-up” an award or have an employee who is taxed for something that is supposed to be a gift. Meanwhile, gifts of cash or even gift cards can include more complex tax requirements.
  4. Providing an award catalog full of award items increases motivation to achieve goals. Tangible merchandise awards engage employees and inspire them to work towards a particular goal in order to get the gift they want. Tangible awards have been proven to offer emotional engagement and extrinsic motivation to participants who work hard to work towards earning a particular gift. In addition, tangible awards have been shown to increase employee retention more than cash or gift cards.
  5. Tangible awards bestow “bragging rights” for recipients. Recognition awards that are quality and name brand bestow “bragging rights” for recipients and have a trophy value among coworkers. Friendly competition can build a reward program’s momentum over time, thus increasing its success and return on investment.
  6. Tangible awards are reportable and replaceable. Awarding tangible gift merchandise allows a company to report and track on how many employees have earned rewards, when and what they selected as a reward. Tangible corporate gifts do not expire and are replaceable if lost or misplaced.
  7. Tangible recognition awards are treated separately from compensation. Lifestyle merchandise award programs are easy to budget and provide recipients with a large assortment of corporate gifts within a single price point. It is easy for employees to take a cash bonus for granted and lump the extra money in with their overall compensation. Giving merchandise awards creates a memorable experience for employees and employers; each time the corporate gift is utilized, an employee will remember the reason and experience that surrounded the award.
  8. Recognition awards are wanted and appreciated, rather than simply needed. Another benefit of tangible award merchandise is that the person will reward him or herself with an item that they want and are able to select. Recognition awards present a guilt-free reason for a person to indulge him or herself in a job well done with a great reward.
  9. Lifestyle merchandise awards are appealing to all demographics. By providing a large number of lifestyle awards for recipients to select from, you ensure that there are items for members of all demographics. Lifestyle merchandise has high trophy value and are often items that a person will use such as exercise equipment, purses, small kitchen appliances, electronic items and furniture.
  10. Tangible awards are the latest items available in modern award programs. Traditional employee awards tended to include pen sets and jewelry made of increasingly costly metals, making the program cost increase year over year and decreasing the flexibility and appeal of the incentive program. Modern award programs, on the other hand, include tangible corporate gifts usually grouped together by price points, always ensuring an easy-to-budget employee award program with a wide assortment of name-brand gifts to select from.

Drawbacks of Cash Bonuses or Gift Cards:

  • Gift cards and cash are always subject to personal income taxes
  • Reveals the amount you spent to the recipient
  • Less personal and memorable
  • Gift cards and cash are often spent on necessities and not something that really rewards the person
  • Force a person to use the gift card at a particular retailer, making the person go out of their way for a gift
  • If a retailer goes out of business, the gift card may not be honored
  • No way of knowing what the recipient used the cash or gift card for, or even if it was used
  • Gift cards may have expiration dates, activation fees and ongoing charges and declining balances
  • A person is very likely to spend more money than the face value of the card since gift cards tend to be given in .00 denominations


This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top