How Many Gift Cards Can An Employer Give To Their Employees?
24 Nov 2021
As the holiday season approaches, many of us are looking for ways to show appreciation and gratitude to our employees. One way is by giving them a gift card. But how many can you give? The answer depends on many factors, but before we give you the answer there are a few questions you need to consider.
How much money can a person receive as a gift without being taxed?
Since gift cards can be redeemed like cash, employees need to report gift cards as part of their taxable income. For employers, however, gift cards up to $25 are tax-deductible. Employers should report all gift cards above $25 on their taxes.
Is There A Limit To The Number Of Gift Cards I Can Give Every Year?
This is a fantastic question. You’re probably thinking now that you might save a lot of money for your company if you start handing out gift cards to employees for every occasion. And you are correct in your assumption, because you can, within reason!
There are no restrictions on the number of value gift cards that your company can distribute, but you must follow the company rules. Those rules differ from company to company, so take care. Every day of the year you might theoretically give each employee a $50 gift card. However, the IRS would almost certainly suspect this operation, and it would be difficult to explain why the insignificant gain wasn’t part of a compensation or benefit-in-kind.
Gift cards as rewards and incentives: five best practices
When offering gift cards as gifts or bonuses, it’s crucial to understand these guidelines to ensure that your gift cards are well-received.
Separate gifts from compensation
For a gift to be truly rewarding, make it clear to your employees that this gift card is separate from any holiday bonuses or boosts in compensation they may receive. Rather, it’s an unexpected token of gratitude for their hard work all-year long. Having the gift as an unexpected reward will surprise and delight your recipients much more than an expected bonus or salary increase.
Where possible, give single-brand or multi-brand gift cards
Though employees highly favor prepaid Mastercard or Visa gift cards because they can be redeemed anywhere, too often these cards are used for everyday expenses, like gas or bills. To ensure that your employees truly receive the gift of treating themselves, consider purchasing single-brand cards, like Starbucks or Target gift cards, or multi-brand gift cards, like our exclusive Choice™ cards that can be redeemed at 5-8 selected brands per card.
Use your gift cards to add a personal touch
Give gift cards a special touch to bring your company towards the next stage. Rather than just randomly handing out Starbucks gift cards, choose one as if it were a gift for anyone you love.
If you know someone on your team is having a child, moving to a new location, or planning a dream holiday, personalize your gift card selection to reflect who they are and what they need right now.
Reduce the number of options available
Your gift card rewards program can be hampered if there are too many options. It’s possible to overwhelm people with an abundance of endless options.
Match your gift card offers to your organization’s principles to provide your workers a voice and a preference. Gift cards to bookstores, movie theaters, and airlines only serve to strengthen the company’s core values!
Match the value to the brand
Gift cards, as previously said, are adaptable. Although gift cards allow you to choose from a variety of amounts, you must ensure that the gift card value matches store requirements. If the value of the card is too small to make a purchase, it’s not a gift anymore, it’s a chore.
Gift cards should be accompanied by clear acknowledgment and gratitude
The most important piece of advice is to match your gift cards with specific acknowledgments. If you combine gift cards with gratitude, you can significantly speed up the incentive program while also increasing employee commitment and involvement.
Giving gifts is wonderful, but it can seem hollow or superficial if it isn’t accompanied by thought and gratitude for your employees. Gift cards can be made to feel as good as any other reward by pairing them with time and thought.
Do you want to buy gift cards in bulk for your employees?
Blackhawk Network is the industry leader in employee prepaid cards and gift cards throughout the United States. Our card portfolio offers all the options you need, including cards that are exclusively ours.
We know choosing the perfect gift for your employees can be extremely difficult and time-consuming, so we offer a full portfolio of comprehensive gift cards unsurpassed in the industry.
From Disney® to Safeway® to The Cheesecake Factory®, we partner with the world’s most beloved brands so you can give gifts that please anyone. Reach out to us now to start a conversation with one of our experts.