Debit, or stored value, cards are quite possibly the hottest item to hit the incentives field since the discovery of the carrot. More flexible than traditional gift certificates, debit cards can typically be redeemed at any of a number of retailers and as a result allow recipients to choose not only what they want to purchase with the cards, but also when and where.

But as the incentives and motivational management experts at the Sales Marketing Network (www.info-now.com) point out, before joining the stampede of employers racing to solve all their motivational needs by doling out thin strips of bar coded plastic, organizations need to understand both the “pros” and the “cons” of debit cards as a motivational tool.

The “Pros”

Flexibility, perceived value, and ease of use are often cited as key attributes of a successful incentive program, and these are just the characteristics that make debit cards so attractive. Redemption is as simple as making a credit card purchase while the only purchasing limits are those imposed by the organizational administrators running the incentive. Recipients who already know what they want can even shop around for the best price, further enhancing the cards’ perceived value.

From the company’s standpoint, one key advantage is the simplicity of administration. Card systems are computerized, allowing for virtually instantaneous tracking of redemption while eliminating the traditional 30- to-60-day wait for gift certificates. In short, these programs are, as the folks at the Sales Marketing Network put it, virtually idiot proof.

The “Cons”

All that flexibility does have a downside, however. Some experts believe that all the choices can dilute the debit cards’ impact as a motivational tool. Also, there’s the not so insignificant matter of so-called “trophy value.” Posting photos of last year’s big contest winner holding a debit card outside Best Buy doesn’t have the same impact as, say, a photo of the same big winner on the beach in Waikiki.

Still, there are ways to minimize these effects. First, many issuers will restrict the cards’ use so that recipients may not use them to buy everyday items like gas and groceries. Also, if the value stored on the card is substantial enough (recommended guidelines suggest 3 to 5 percent of the recipient’s gross pay), the perception of value will remain high.

Conclusion

Weighing these pros and cons, many incentive program developers will likely conclude that the upside to debit cards is just too great to pass up. The key consideration then, may be simply to take appropriate steps to address the few drawbacks so that motivational impact can still be maximized.