New research from One4all, the leading UK gift card company, suggests that HR departments are putting millions of pounds of their incentive and benefits budgets at risk, by purchasing unregulated gift cards to reward employees.
The UK gift card employee benefits sector is worth over £1bn, with many businesses choosing gift cards as a form of reward and recognition for their staff.
Incentives play a vital role in leveraging business performance and are a key part of any HR department’s strategy. However, despite legislation being in place to protect the funds held on gift cards, what many HR managers do not know is that compliance is not mandatory.
A consequence of this is that very few retailers have opted to bring their single-retailer gift cards within the scheme. This could result in millions of pounds being lost if a retailer collapses, as recent high-profile casualties like HMV and Jessops have shown.
In the UK market, only multi-retailer gift cards such as One4All offer the full protection because they are regulated under the European Union Emoney regulations which require ringfencing of clients funds in case of collapse of card issuers. underwritten by the Bank of Ireland. However, in a recent YouGov opinion poll, commissioned by One4all, 91% of respondents admitted to being unaware that regulated gift card options were even available.
Regulated products like the One4all gift card bring clear benefits to HR departments, giving them the reassurance that they won’t be left out of pocket in the event of a retailer collapsing.
One4all Managing Director, Declan Byrne said: “Multi-retailer gift cards like the One4all gift card, are a fantastic way to reward and incentivise staff as they offer such a great choice to employees. They also offer security to any HR manager that their investment is protected, but only if they choose a regulated product. If they don’t, they risk losing millions of pounds of their budgets and potentially damaging relationships with their employees.
“Our research gives a strong message to the industry that greater consumer protection is needed in order to maintain confidence in the gift card market and this is something we are pushing for across both the business and consumer markets.”
The findings come ahead of the UK’s largest marketing event, the Marketing Week Live conference in London, where marketing decision makers will come together to discuss the latest knowledge, techniques and solutions in the industry.