Incentive Federation Study Shows Dramatic Market Growth in Use of Incentives for Employees and Customers

Nearly a $77 Billion Market

Oct 14, 2013, 09:40 ET from Incentive Federation

LAS VEGAS, Oct. 14, 2013 /PRNewswire/ -- A new study conducted by the Incentive Federation confirms that the non-cash incentives market is thriving with 74 percent of U.S. businesses spending $76.9 billion annually on incentive travel, merchandise and gift cards. The study also reveals that half of this market is driven by smaller businesses ($1 and $10 million annual revenue), whose budgets may be tighter, but whose total volume generates $39 billion a year. The study found that overall U.S. businesses spend $22.6 billion annually on incentive travel and over $53 billion on merchandise and gift cards to reward employees, partners and customers.

Conducted in partnership with Aspect Market Intelligence, the purpose of the study was to collect data from a national sample of nearly 2,000 business executives in order to estimate the current size and characteristics of the non-cash incentives marketplace. The study also revealed:

  • 98 percent of businesses running non-cash incentive programs include merchandise or gift cards, spending $54.3 billion each year.
  • 46 percent of businesses running non-cash programs include incentive travel, spending $22.6 billion per year.
  • Non-cash employee awards are the most prevalent with 56 percent of U.S. businesses having programs, followed closely by corporate gift programs.
  • Non-cash sales incentive programs are present in almost one-half of U.S. businesses, and non-cash customer loyalty programs are used in one-third, while only one-quarter of U.S. firms use non-cash channel programs.
  • Gift cards are more frequently used for employee programs (88 percent) than for corporate gifts (55 percent), while merchandise is used relatively evenly.
  • The incidence of all program types tends to increase with firm size.

"This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses' growth strategy, even in light of recent economic challenges," said Melissa Van Dyke, Research Chair of Incentive Federation and President of The Incentive Research Foundation.

The study was made possible with assistance from: Promotional Products Association International, Incentive Marketing Association, Site, Incentive Research Foundation, O.C. Tanner, Rideau and Incentpros. To read the full study go to: Marketplace White Paper 10132013.pdf.

About The Incentive Federation

Founded in 1984 to focus on government affairs, the Incentive Federation continues to educate state and federal governments and agencies and has been successful at providing constructive input into tax laws related to the treatment of qualified noncash rewards, in helping OSHA see the benefits of safety incentive programs when writing related regulations, and in helping federal regulators understand that financial institutions have legitimate uses for premiums and incentives. An alliance of associations involved in various aspects of the incentive marketplace, the Federation has expanded into three related domains: corporate outreach, education, and research. More information can be found at:

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Melissa Van Dyke
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Sue Voyles

Melissa Van Dyke

SOURCE Incentive Federation