Cash Is King?

There certainly was a long period of time when bringing cash to a transaction would mean great benefits like discounts and quicker production. Today, after inflation has shrunk our dollar and aggressive accounting reviews make no provision for cash, the best you might get is 3% that would have gone to the credit card company. If you mention cash when shopping for a car, your price will likely increase because substantial profit for the dealer comes from financing  purchases. 

Incentives  and rewards are surprisingly similarly affected. An extra bit of cash or holiday gift card is quickly consumed by current expenses and is looked at as an entitlement by many workers. A 2023 survey by Kudoboard found that 65% of employees preferred non-cash rewards. The IRF (Incentive Research Foundation) using a similar survey found the total to be an astounding 80%!

One of the facts that emerged is that merchandise that is perceived as luxury items, something that the recipient wants rather than needs, has a much stronger and longer lasting impression. Food gifts, leather goods, music, personal electronic items, sports apparel, high end writing instruments and many other items with high perceived value, will have strong and lasting incentive power.  

Even point redemption programs confirm that non-cash incentives deliver greater overall value. More than 50% of people said they would rather have the point system than cash. 

Perhaps the most emotional impact of non-cash incentives and rewards is that they provide an opportunity for the recipient to talk about why the gift was received. An athletic team receiving the championship trophy gets year-long bragging rights. The ring individual players receive extends these bragging rights for many years ahead. The same is true for an employee who is recognized and rewarded for exceptional accomplishment.

So why do many business executives still use cash? It seems that the very nature of them being administrative decision makers has them think in cash terms. They use their own sentiments about cash to interfere with what their staff would prefer. You however, might be able to use that devotion to your advantage!

Non-cash incentives and rewards generally save a significant amount of CASH!  I was given a leather checkbook cover about 30 years ago.  At that time it had  a perceived value (catalog first column list) of $40 (a).  I still use that checkbook cover and the affinity for the supplier has lasted. A $40 gift card would have been a tiny memory that faded within a few days - and cost a lot more.

This time of year is a great time to suggest a point redemption program. Employees can be given an initial number of points sufficient to redeem for bottom (or any level employer wants) items, or they can start saving for something else they would like to have. 

A retailer friend has given each of his employees (about 20) a $50 bill and hand shake at a brief holiday lunch. He has done this for years. I pointed out that a couple of years ago that might have filled the gas tank a couple of times. Now it might only get half a tank. Add to this that the cash was expected and the “gift” aspect was really diminished.  I showed him a few items in the $50 price range. He picked a great item with the help of his two managers and all three of them expect that the rest of the team will be very pleased.  

While cash has been common for internal incentive and reward, using non-cash items for clients has always been effective. Now is the busiest time of the year for getting corporate gift items ordered for your customers. Be sure to have two different conversations with your customers, one regarding their employees and another about their customers. Don’t wait - suppliers still have good inventory but the best availability is now.