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$90 Billion Spent Annually On Non-Cash Incentives

84% of businesses in the United States participate annually in non-cash incentives.

A new survey by the Incentive Federation has found that 84% of businesses in the United States participate annually in non-cash incentives like award points, gift cards, travel and merchandise, spending a total of $90 billion. The Incentive Marketplace Estimate Research Study found that the non-cash incentives sector increased by 17% in three years, since the last market estimate report in 2013.

“This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses’ growth strategy,” said Melissa Van Dyke, co-chair of the Incentive Federation and president of The Incentive Research Foundation. “The growth in the use of non-cash incentives is an important signal that U.S. businesses value tangible incentives over simply using cash to recognize performance and loyalty.”

The study found that employee rewards and corporate gifts are the most predominant types of non-cash incentives, with 72% of businesses reporting that they offer both programs. Meanwhile, among non-cash programs, three of five businesses in the U.S. offer sales incentive programs, 45% offer customer loyalty programs and 41% have channel programs.

Gift cards are the most common type of incentive in all programs surveyed except customer loyalty. Travel is most commonly used in sales programs, and merchandise is most prevalent in channel programs.

The number of firms using non-cash incentives as appreciation gifts for clients, prospects and partners increased by 36% from 2013 to 2015. However, while the number of firms reporting the use of incentives in this area has risen, there’s also a reported decrease in overall spend on those items of 32%, down to $10.5 billion.

“The Federation’s research in 1996 revealed that only 26% of U.S. businesses were using non-cash incentives, and our 2000 research reflected a $27 billion marketplace,” said Steve Slagle, managing director of the Incentive Federation. “The growth in the marketplace over 20 years is certainly gratifying and a tribute to the excellent work the industry’s companies have done to educate businesses about the value of all forms of non-cash incentives.”

Earlier this year, the Incentive Federation released the 2016 Trends in Incentive Travel, Rewards and Recognition report, which provided a collation of the major incentive trends found through multiple surveys the organization conducted in 2015.