Send a $50 Amazon card to 500 people in 12 countries

In the United States a reward card and a gift card are not governed alike, and the dividing line is narrower than it sounds. Under Regulation E the funds on a gift certificate, store gift card or general-use prepaid card expire no earlier than five years from issuance or last load, and an inactivity fee needs a full year of no activity behind it and is capped at one a month. A loyalty, award or promotional card sits outside those provisions, but only if it says so on itself: the definition requires the card to set forth that it was issued for that purpose, the expiration date for the funds, any fees and their conditions, and a toll-free number. So a catalog card with none of that printed on it stays a gift card, whatever the program called it.

Take a survey incentive program sending 500 cards at $50, so $25,000 issued. Say 88% are redeemed within the quarter. That leaves 60 cards and $3,000 outstanding, and the question is when, if ever, that becomes income. It has stopped being campaign budget and become a balance the recipient can still claim. Unclaimed property law in the United States is set state by state, so whether an unredeemed balance eventually goes to a state authority rather than back to you is a question with fifty answers, and which one applies turns on where the recipient is. A redemption rate is a finance number before it is a marketing one.

Cash and a card get chosen on the wrong axis surprisingly often. A card is picked because it feels like a gift and because it does not run through payroll. The second reason is the one to take to your own advisers before a program launches, because tax rules tend to look at whether a reward has a cash equivalent rather than at how it was handed over, and a card with a printed face value has an obvious one. Where a card genuinely wins is reach and speed into markets where paying a small amount to one individual is disproportionately expensive to arrange. Where cash wins is anywhere the recipient ends up declaring it regardless.