If you manage a rewards program, then you’ve got lots of decisions to make, starting with the most basic: gift cards vs cash.
The only constant in business is change, so finding the right way to reward and motivate employees and customers changes, too.
Of course, with the rise in rewards and payout software, sending cash or even cash-like alternatives like money transfers is quickly becoming obsolete.
Recipients today expect to get their rewards now, and, like we’ll explore below, gift cards tend to align better with both their expectations and with your business objectives.
Maybe it’s hard to believe, but even in 2025, you’ll still hear claims that ‘cash is king.’
But if ‘cash is king,’ then why are so many more companies turning to bulk digital gift cards and prepaid cards instead of traditional cash bonuses to inspire, engage, and connect with their teams and customers?
Historically, cash has been viewed as the epitome of flexibility and simplicity in rewards systems.
And yes, cash is universal and easy to use.
But as we move forward, the drawbacks of cash as a reward are becoming more and more apparent, making it less effective in today’s dynamic reward landscape.
There’s no doubt that cash bonuses are straightforward. But they also tend to merge into the everyday funds of recipients. This means they’re often spent on mundane necessities rather than on something truly memorable or impactful. Any excitement from the reward is short-lived.
“Cash rewards are not memorable,” says Giftbit CCO Nat Salvione. “They lack the personal touch and the emotional connection that can make rewards truly impactful.”
Moreover, cash bonuses don’t offer the visibility and shareability that most modern companies now want from their rewards programs. Cash bonuses tend to be viewed as private affairs. When employees receive cash, they’re likely not going to be sharing that news with their friends, and their friends won’t be celebrating them for it.
This lack of shareability means that cash rewards will have fewer positive social effects within a workplace or community, such as boosting morale or fostering a culture of recognition.
Ultimately, while cash may still hold sway in some traditional contexts, its role as the reigning king of rewards is increasingly challenged by more adaptable and personalized alternatives.
In its place, gift cards and prepaid cards are emerging as the clear winner.
Simply put, a gift card is a prepaid stored-value card used by individuals for making purchases within a specific network of retailers or service providers.
Note: the term ‘gift’ in ‘gift cards’ refers to their nature of being preloaded with a set amount, which is not intended to be reloaded—these cards are typically a one-time-use financial tool.
And it’s crystal clear from decades of academic studies that people love getting gift cards.
For example, we know that 2 out of 3 people who receive a gift card as an incentive will remember:
For most rewards and incentives programs, non-cash rewards like gift cards and prepaid cards are better options. People tend to see them as more thoughtful and engaging, so your recipients are likely to remember and appreciate them long after the transaction.
Gift cards also encourage recipients to treat themselves to something special, elevating the perceived value of the reward.
Bottom line: gift cards are not just financial instruments. They're also powerful tools for engagement, motivation, and personalization in rewards and incentives efforts.
If you’ve spent any time Googling digital rewards, then you’ve likely stumbled upon the two different types of them: open-loop and closed-loop.
Note: you do not need to understand the following nuances of open and closed loop cards before you start sending them!
Open-loop cards, such as those from VisaⓇ or MastercardⓇ, are classified as prepaid cards. They are preloaded with an available balance that acts as a spending limit. The recipient can use them to make purchases wherever these cards are accepted.
Examples of prepaid cards are the Virtual Visa Incentive Card and the Virtual Prepaid Mastercard.
On the other hand, closed-loop cards are retailer-specific and can only be used at particular stores or chains, which makes them more personalized but less flexible than their open-loop counterparts. It’s these types of cards that are actually classified as gift cards.
Examples of gift cards are Giftbit Starbucks gift cards and Amazon gift cards.
Whether open or closed-loop, both are similar in terms of convenience and choice, improving the gift-giving experience in ways that cash simply can’t.
And again, you don’t need to know the ins and outs of closed loop vs open loop cards to start using them. What you do need to know is whether your