Avoid Recognition Breakage!

Breakage is a term used to indicate gift cards that have been sold but never redeemed. Revenue from breakage is very profitable because companies do not provide any goods or services for the unredeemed gift cards. Breakage is also a factor in many point based programs where a company pays for points up front, however this post deals with gift cards.

Gift card breakage is huge…

TowerGroup, a financial-services research firm estimated that 10% or $8 billion of the $80 billion spent on gift cards in 2006 will never be redeemed! Consumer Reports estimates the amount is even higher! They say in 2005, 19% of people who received gift cards never used them.

Some gift card retailers have also imposed conditions on gift cards, such as expiration dates or monthly service fees that periodically reduce the value of the gift card. However, many States have passed (or plan to pass) legislation which outlaws expiry dates and fees or charges of any sort on gift cards.

How does this affect your recognition and reward program?

Well, if you hand out gift cards as a reward, realize that a significant portion of your recipients will never use them! I call this “reward breakage.” And while it’s not a good thing at least the recipient has the “value” of the gift card in his or her hands and it’s up to them whether to use it or not.

In my opinion, “recognition breakage” is much worse.

These are schemes whereby providers send out “recognition award certificates” that can be exchanged for a variety of gift cards. These “recognition award certificates” often have an expiry date attached to them… usually one year. While the law and legislation is much murkier when it comes to “recognition award certificates” one thing is clear… these providers are hoping recipients never, ever, exchange them for actual gift cards!

I find it ironic these “providers” call themselves “recognition experts” because the bottom line is they really do not want recipients to pick up their “rewards”!

We have come across several cases of companies who complain they don’t get reports from these providers. No wonder! Why would these providers want to reveal the fact that a significant portion of the “recognition award certificates” are not exchanged.

It’s called recognition breakage! Avoid it!

Innovative Ways to Drive Employee Loyalty.... again

Not too long ago, I had the pleasure of participating on a webcast panel with Will Ng, Incentive Magazine Managing Editor and Dr. Lerzan Aksoy, co-author of “Why Loyalty Matters.”

We spoke about the intricacies of employee loyalty, recognition and engagement. The impact you can have on your people by deepening employee and manager relationships is amazing.

The webcast is now available online to download for free. You must register first, then you may navigate through the virtual conference to the presentation pages. Or once logged in click here.

Head to Head with Cancer... part 2

In case you missed it, earlier this week we had a very special and very amazing event at Rideau: Head to Head with Cancer. Our employees came together in an amazing way and raised over $35,000 towards the Canadian Cancer Society.

View a little video of the event below with special guest Jean Beliveau!
Or click here to read more about our event.

Art from the Hart

Sacré Coeur

I painted this on a trip to Paris last year with my wife Francine. It was a Sunday afternoon and the crowd on the steps were listening to an artist playing hits from the 70s in English.

Head to Head with Cancer

My Mom Phyllis, was first diagnosed with cancer in late November 1996.

She was in Florida at the time and even though she was fully insured, her long time Florida doctor recommended that she return to Canada so our family could help support her and my Dad through her coming battles. Mom was operated on two weeks later and had several really rough months but she survived her ordeal.

Sadly, the cancer returned early 2000. This time she was not so lucky. She died on October 27th in a small hospital north of Montreal surrounded by my Dad, sister, two brothers, another long time family friend and me. Her passing brought our family, which was already close, even closer together. Every year at this time we get together, raise a glass and tell Silly Philly stories.

Four years ago, on the fifth anniversary of her passing, we decided to participate in the local Shave to Save campaign that raised funds for Cancer. Our employees, suppliers and clients raised over $11,000 for this great cause and my best friend Cam Ferguson, my brother Stephen as well as my two sons Jonathan and Jordan along with me shaved our heads for the cause.

We decided to do it again this year. Again on the anniversary of my Mom’s passing. The only difference being we opened it up to all our employees. Yesterday afternoon, almost 20 of us participated in our very own event: Head to Head with Cancer.

More importantly… we have raised over $35,000!


(Click here for more pictures of the event)

I want to thank all fellow shavees for participating in this event. I want to thank all my Rideau employees, suppliers, clients and friends who contributed to the event. I also want to thank my good friend and hockey legend Jean Béliveau for coming out and supporting all of us. Jean battled cancer the same time as my Mom so his participation was especially welcome.

Together we can all beat this terrible disease that has taken away so many of our loved ones.

2010 Recognition RX: Engaging Employees for Economic Recovery

One of my proudest professional accomplishments was to found the Recognition Council, a Strategic Industry Grouping (SIG) within the Incentive Marketing Association (IMA) . For the last two years I have had the privilege of serving as its President.

The Recognition Council was formed to provide an awareness of how recognition and rewards can help achieve better business performance. Our focus is to educate and promote the benefits of recognition and rewards to the worldwide business community.

Today the Recognition Council numbers 30 strong and consists of our industry's leading recognition and reward companies.

We have just released our very timely second white paper “2010 Recognition RX: Engaging Employees for Economic Recovery.” This will help your organization determine how recognition programs and budgets should be constructed for maximum impact.

I would be remiss if I did not publicly thank Susan Adams, the Recognition Council’s Chair of Education Content. While many people worked on our white papers, Susan acted as our Chief Organizer and we all owe her a big debt of gratitude.

Click here to view other Recognition Council resources.

BTW… Sue probably has the coolest business title of anyone I know… she is Dittman Incentive Marketing’s “Great Escapes Solutions Director”! And no… this doesn’t mean breaking folks out of prison! If you’d like to learn more about Dittman Incentive Marketing and Susan’s innovative Great Escape solutions check out this recent article in Incentivemag.com.

Enjoy!

HRO World Europe - November 18-19 London

On Wednesday, I spoke about a recognition conference in Paris, while you're in the area, you should hop over to London and try and catch the HRO World Europe conference.

It takes place November 18 - 19 in London.

My good friend and fellow Rideau Board member Jay Whitehead along with his colleagues are bringing together over 250 senior executives who are intent on transforming their HR operations.

Another good friend, Christophe Laval CRP will be delivering a keynote titled “The Intersection of 3 European HR Megatrends: Performance Management, HR Outsourcing, and Recognition at Work”. Christophe serves with me on Recognition Professionals International’s Board of Directors and is the President & CEO of VPHR. He recently wrote “Plaidoyer pour la reconnaissance au travail (”A Plea For Recognition in The Workplace”). His firm VPHR, is the first European firm dedicated solely to recognition in the workplace.

It should be a very informative keynote and conference!

Break a leg Christophe!

Click here to register.