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The Financial Advantage of Non-Cash Incentives

Technically, you don’t need any special tools to operate a company incentive program. Many organizations run incentive programs using rebates, debit cards, or gift cards without going through an incentive company or using online technology for a points program. They spend valuable time and resources, believing it saves money to manage the program in-house.  But there are several costs and disadvantages associated with card-based incentive programs that may make them an unwise choice for many companies. Although the upfront set-up costs of online points programs may make them initially seem more expensive, card rewards programs often come with cardholder fees and other disadvantages that end up decreasing the overall value of rewards to your participants. financial-advantage-non-cash-incentives

Here are some of the advantages that online point programs have over card based programs:

  • You don’t pay the fees associated with debit and gift card rewards.

In addition to the upfront reward amount of the debit or gift cards you purchase, cards typically come with additional fees. Some of these include:

  • Shipping and handling costs
  • Vendor or purchasing fees
  • Load fee and mark-up
  • Debit card ATM transaction fees
  • Dormancy or non-usage fees (per the CARD Act of 2009, gift and prepaid cards can incur a monthly dormancy fee if the card has been inactive for one year)
  • Lost card replacement fees
  • Card activation fees
  • Monthly maintenance fees

Not all prepaid or gift card providers will charge you all of the above fees and amounts vary from one provider to another, but you can expect the fees to add up, on top of the reward values.


  • You don’t lose breakage money when program participants don’t redeem rewards.The “breakage” of prepaid debit or gift card rewards is the amount of money the cardholder or program participant loses when they don’t redeem the full card value. This happens if the participant loses the card, forgets about it, or uses it and tosses it without redeeming the last few dollars on the balance.No matter if you run a card or points-based reward program, unredeemed reward value is a factor you must consider. Very few (if any) reward or incentive programs consistently see 100% redemption rates among their program participants. But, if you run an online points program, you get the option of paying for the program points only when participants redeem them. Any breakage money left over can go back into funding your incentive program, so you don’t waste the investment and the cost goes back into motivating participants. This helps you offset vendor and/or technology costs associated with a points program.


  • You get discounted rewards.Very few debit card rewards vendors offer discounts on card value. But points based online rewards catalogs contain a variety of vendors’ merchandise, event tickets and travel bookings, and many of these vendors give discounts to the incentive companies they work with. The incentive company then passes those savings on to you and your participants.
  • You get cool, online incentives technology to enhance and measure the program.Point programs are delivered through online technology with a variety of additional tools and features to support your program’s success. Add-on technology that could enhance your program includes:
Sales claims uploading You can use purchase documentation provided by participants to better track and audit sales claims.
Mobile app or mobile optimization Participants will be more engaged with your program through easy, frequent access.
Online training An online training incentives platform fosters increased product, service, safety and skill knowledge.
Leaderboards Configurable leaderboards that amp up motivation and productivity with a little friendly competition.
Communication tools Alert participants to reward points balances, upcoming reward opportunities, program updates and more to keep the program top of mind with your audience.
Reports and analytics Measure participant engagement and program ROI.


These tools and features enable you to offer your incentive program audience a complete reward experience instead of just cash bonuses. Using the technology an online point program provides, you can develop a custom sales and marketing tool aligned with your brand image and company sales goals.


  • You get incentives best practice pow-wows with your account manager.Working with an incentive company, you’ll have access to an account manager. This account manager acts as a liaison between you and the incentive company, which means you’ll benefit from their industry expertise and best practice recommendations. They can provide strategic, marketing and creative support to increase the ROI your program might otherwise earn.
  • Trophy value (i.e. bragging rights) makes participants more active in a points program.Golf clubs, a new 4K TV, a trip to Hawaii—what do these three things have in common? They’re tangible, visible and you can purchase them through a points based reward program. They can start a conversation about your incentive program and your company. That kind of organic brand awareness is both incredibly effective and tough to come by. And you’re much less likely to achieve it with card based incentive programs. Who wants to brag about a prepaid debit or gift card?

Card based incentive programs aren’t an all-around bad choice. There are certain situations where they may be the right solution, particularly for short-term incentive plans. But if you want a sustainable program that makes a real impact on the motivation in your organization, you may want to consider the advantages of an online, point based program. Your investment will go further, you can avoid diminishing the program value, enjoy reward discounts, enhance your program with online technology and leverage the expertise of an account manager throughout your program’s lifespan.

Want to know more about the advantages of an online incentive program? Contact us or call us at if you have questions!