Running a global business is not for the faint of heart — it demands resilience and strategic acumen to overcome hefty financial hurdles. As organizations expand internationally, costs quickly accumulate—ranging from compliance with local labor laws and securing office space to adapting strategies for new markets and managing staffing and licensing. Labor costs, including wages, benefits, and payroll taxes, often represent a major portion of these expenses, accounting for up to 70% of total business costs. For the roughly 80,000 multinational corporations operating globally, these challenges are magnified. They must navigate a complex landscape of international regulations, economic variability, and fluctuating currency exchange rates, further complicating and increasing operational costs.
Facing these financial pressures, businesses need savvy solutions to keep costs in check and operations running smoothly. While many businesses may not realize it, the types of payments and disbursements they use can have a dramatic impact on their financial health. Gift cards and prepaid cards, though often overlooked, offer significant advantages in managing expenses and enhancing efficiency. Here are seven challenges global businesses face—and how prepaid cards, including gift cards, provide innovative solutions to overcome them.
Challenge 1: High Costs and Inefficiencies in Traditional Rewards Programs
Managing traditional rewards on a global scale is costly and complex. Businesses face expenses for purchasing, storing, packing, and shipping physical items (e.g., company-branded clothing), with postage being a major cost, especially for international deliveries. Varying shipping rates, customs duties, and potential delays add to the burden. Not to mention that undelivered packages can cost companies billions of dollars each year. These tasks consume valuable time and resources, diverting focus from core business activities. The inefficiencies slow down reward distribution and increase hidden costs related to labor and time management.
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Solution 1: Digital Rewards to Streamline Costs, Time Investment
Switching from physical rewards to digital rewards, such as e-gift cards, offers substantial cost savings by eliminating the need for physical logistics. Without the expenses tied to packaging, shipping, and handling physical items, companies can allocate resources more efficiently. Digital gift cards allow for personalization, including custom messages and branded designs on behalf of the company providing them, maintaining the personal touch that physical rewards offer without the associated costs. Plus, people actually prefer digital rewards, especially with credit card delinquencies at a 12-year high, digital rewards like prepaid and gift cards can provide a financial buffer, allowing users to also manage their spending more effectively or splurge on themselves while avoiding taking on more debt.
Challenge 2: Employees Face Administrative Burdens with Traditional Rewards
Traditional rewards create administrative burdens for employees, especially with physical rewards that have to be shipped and delivered internationally. The process is often complex, requiring multiple forms, customs declarations, and sometimes tax payments. What should be a rewarding experience for employees can quickly become a frustrating, time-consuming ordeal. When the process of receiving a reward feels more like a chore than a benefit, the intended positive impact is often lost, leading to disengagement and dissatisfaction among recipients.
Solution 2: Enhanced Employee Experience with Digital Gift Cards
Digital gift cards cut out the logistical headaches and paperwork associated with physical rewards. With near-instant delivery, employees receive their rewards quickly, boosting satisfaction and enhancing their experience. Research shows nearly two-thirds of employees value timely recognition, which digital gift cards provide seamlessly, even through platforms like Microsoft Teams and Zoom where global employees spend a significant amount of time. The ease of digital distribution ensures that rewards fulfill their intended purpose: boosting morale and engagement without the drawbacks of traditional reward systems.
Challenge 3: Traditional Customer Promotions are Less Effective
Traditional promotions, especially discount-based ones, often fail to drive long-term engagement and loyalty. While discounts might boost immediate sales, they typically lack the personalization needed to create a lasting impact. Generic promotions can feel impersonal and fail to resonate with customers, leading to limited engagement and a lack of differentiation from other offers.
Solution 3: Reward-Based Promotions are More Effective
Reward-based promotions, such as those that offer digital prepaid and gift cards, foster customer loyalty and encourage repeat business, unlike traditional discounts that only reduce the cost at the point of sale. Discounts may lower a single transaction’s price, but they don’t promote future engagement. On the other hand, reward-based promotions such as e-gift cards or rebates offer personalized incentives that encourage customers to return and interact with the brand. This approach strengthens emotional connections, boosts satisfaction, and drives long-term loyalty, ensuring customers keep coming back.
Research from BHN found that businesses offering reward-based promotions experience the following benefits:
- 174% year-over-year increase in cross-sell and up-sell revenue
- 105% year-over-year increase in annual revenue
- 99% year-over-year improvement in customer lifetime value
- 92% year-over-year increase in average profit margin per customer
- 84% increase in sales attributed to reward-based promotions
- 32% better ROI on marketing spend
Challenge 4: Environmental Impact of Physical Rewards
Physical rewards come with environmental costs—packaging waste, shipping emissions, and a heavy carbon footprint. ESG initiatives are becoming a non-negotiable factor for success in the global marketplace, and businesses need to adopt sustainable practices. We’re increasingly seeing companies elevate their CSR goals. For instance, Apple has pledged to be carbon neutral across its entire supply chain by 2030, a factor that will undoubtedly influence its international operations. However, meeting these types of goals can be a challenge.
Solution 4: Digital Rewards Align with ESG Initiatives
Cutting out the packaging waste and shipping emissions tied to most physical rewards and incentives is simple with digital gift cards. By eliminating the need for materials and transportation, digital rewards drastically reduce a company’s carbon footprint. Digital gift cards cut out waste and emissions, making them a greener choice that resonates with the 44% of consumers who prioritize sustainability, as found by the National Retail Federation. Adopting digital rewards not only helps protect the planet but also enhances a brand’s reputation as a leader in sustainable practices.
Challenge 5: Low Participation in Customer Satisfaction Surveys
Encouraging customers to participate in satisfaction surveys isn’t easy, and it’s common for businesses to experience low survey response rates. This reluctance and indifference impacts the quality and depth of the insights businesses gather, leading to less accurate and comprehensive feedback. When participation is low, companies miss out on valuable perspectives that could drive improvements and inform strategic decisions.
Solution 5: Incentivizing Surveys with Prepaid Cards
Once your target audience learns about your research, the key question becomes: What will motivate them to participate? Research shows that sufficient incentive is the primary reason most people choose to engage in both quantitative and qualitative studies. So, offering prepaid cards or gift cards as incentives addresses this need effectively, providing that near-instant gratification and encouraging higher survey participation. With the right rewards, businesses can boost response rates, gather more meaningful insights, and enhance customer satisfaction, making it a win-win for both companies and participants.
Challenge 6: Engaging Event Attendees
The event industry has undergone major shifts over the past few years, making it crucial for planners, especially those working on a global scale, to adapt their engagement strategies to ensure a positive ROI. Tightened budgets, driven by inflation and economic uncertainty, have made planning and attending events more challenging. Engaging event staff and attendees directly influences satisfaction and overall event success.
Solution 6: Gift Card Incentives for Increased Event Engagement
Gift cards, which can be event-branded and highly personalized, offer a powerful tool for enhancing engagement. For example, personalized gift cards can be handed out in-person as thank-you gifts or sent digitally to virtual attendees. You might even consider e-donation rewards that allow recipients to donate the value of their reward to a charitable organization of their choosing. Attendees appreciate the flexibility of gift cards, as they offer flexible redemption occasions and opportunities.
Challenge 7: Streamlining Cumbersome Disbursement Processes
Relying on paper checks for disbursements is outdated and risky—it’s time to modernize. These traditional approaches can be inefficient, lack security, and are costly, with industry estimates placing the cost of issuing a single paper check between $4 to $20. Whether for employee rewards, appeasements, refunds, rebates, charitable giving or government aid, disbursements need to be handled more efficiently and securely. In a global context, outdated methods increase vulnerability to fraud and administrative burdens.
Solution 7: Digital Disbursements for Efficiency and Security
Global businesses must adopt modern disbursement solutions that streamline administrative processes, reduce costs, and enhance security, ensuring that disbursements are managed effectively across diverse applications and industries. Digital disbursements are a seamless way for businesses to electronically send funds for a variety of use cases, offering recipients a convenient and efficient way to receive money. Unlike traditional methods such as checks or cash, these modern solutions use technology to deposit funds directly to recipients’ inboxes for flexible redemption and even uploading to digital wallets.
Incorporating gift cards into global business strategies brings multiple benefits, from boosting event engagement to simplifying how you reward your customers and employees. Beyond their efficiency and personalization, the demand for gift cards transcends various use cases, making them versatile tools in both professional and consumer settings. By using gift cards for a variety of workplace and retail payment and disbursement needs, companies can enhance engagement, streamline operations, and drive meaningful results, making them a smart choice for global business.
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