Fringe benefits and digital gift cards: an unlikely match?

In recent years, the landscape of fringe benefits and corporate welfare has undergone a sweeping transformation. Among the most significant trends is the rise of digital gift cards, tools that are redefining the way companies deliver employee benefits. A striking example of this success is the case of GiftCardStore by Amilon, which over the past two years has recorded a 400% increase in revenue, thanks to the simplicity and flexibility it offers to both companies and employees. But what exactly are fringe benefits, and how do they relate to gift cards? Let’s find out together.

What Are Fringe Benefits?

Fringe benefits are non-monetary perks that companies offer employees in addition to their salary. These can include meal vouchers, gym memberships, company cars and, more recently, digital gift cards. Their purpose is to improve workers’ well-being, boosting their satisfaction and loyalty.

But what is the difference between corporate welfare and fringe benefits? Although the two concepts are often confused, corporate welfare represents a set of initiatives aimed at employees’ overall well-being, such as training courses or healthcare. Fringe benefits, on the other hand, are specific benefits, usually provided for more practical purposes tied to day-to-day management (see this short guide to fringe benefits).

Fringe Benefits in 2024: who is entitled to them?

In 2024, fringe benefits play a leading role thanks to a particularly favorable tax framework. All employees can take advantage of them, up to the tax exemption threshold:

• 1,000 euros per year for workers without dependent children.
• 2,000 euros per year for workers with dependent children (upon submission of a self-certification).

This means that benefits provided within these thresholds do not count toward taxable income and are therefore exempt from taxation, both for the employer and the employee. For amounts above these thresholds, however, the entire value of the fringe benefit becomes taxable.

The Trend in corporate gift cards: Italy and Europe compared

The market for corporate gift cards is expanding rapidly both in Italy and across Europe, driven by a combination of technological innovation, changes in consumer behavior and growing adoption within corporate welfare strategies. In Italy, significant growth is forecast: the value of the gift card market is expected to rise from 5.7 billion euros in 2020 to 16 billion euros by 2028, with a compound annual growth rate (CAGR) of 14%. This evolution is fueled by a preference for digital gift cards, particularly popular with younger generations such as Millennials and Gen Z, who value their flexibility and convenience.

At the European level, the gift card market maintains a positive and steady trend. In 2023, the market was valued at approximately 155 billion dollars and is expected to grow at a CAGR of 12.4% through 2028. In parallel, the gift and incentive card segment is expanding at a rate of 6% CAGR through 2027. The adoption of digital gift cards is particularly driven by the growth of e-commerce and the demand for flexible, convenient payment solutions.

Among the main factors driving this growth are digitalization, which makes gift cards accessible and easy to use, and the increasingly widespread adoption of gift cards in corporate welfare programs. In particular, many companies are choosing to replace or supplement traditional bonuses with digital gift cards in order to simplify the delivery of fringe benefits and give employees greater personalization and freedom of choice. This trend, combined with younger generations’ preference for digital solutions, points to a prosperous future for corporate gift cards.

The GiftCardStore case: a success in numbers

A brilliant example of how fringe benefits can be managed in an innovative way is GiftCardStore, the platform by Amilon, part of the Zucchetti group. Over the past two years, GiftCardStore has seen extraordinary revenue growth of 400%, a sign of strong appreciation from both companies and employees.

This success is mainly due to two factors:

1. Ease of use: companies can purchase and distribute digital gift cards in just a few clicks, minimizing bureaucracy.
2. Flexibility for employees: thanks to multi-brand cards, workers can choose how and where to use their fringe benefit, personalizing it according to their needs.

Digital Gift Cards: benefits for companies and employees

Digital gift cards are today one of the most popular solutions for delivering fringe benefits. Compared to traditional vouchers, they offer a number of significant advantages:

• Ease of management: companies can purchase gift cards in large quantities, distribute them digitally and monitor their use through dedicated platforms such as GiftCardStore.
• Flexibility: employees can use gift cards for a wide range of purchases, choosing from more than 200 brands available.
• Personalization: with multi-brand cards, employees are free to split the amount across several gift cards from different brands, fully satisfying their preferences.

A practical example

Imagine an employee with a fringe benefit of 1,000 euros. With a multi-brand card from GiftCardStore, they can choose to allocate:

• 300 euros for technology purchases.
• 400 euros for clothing and accessories.
• 300 euros for entertainment services.

This approach not only increases satisfaction but also allows the company to show that it is attentive to the individual needs of its employees.

Innovation and future prospects

The innovation brought by platforms such as GiftCardStore is revolutionizing the way companies think about employee benefits. The ability to personalize the employee experience, combined with ease of management, is helping to make digital gift cards a standard for delivering fringe benefits.

With an impressive growth rate and an enthusiastic response from users, it is clear that this trend is set to consolidate further in the coming years. However, to fully harness the potential of these tools, it is important to understand how to use them and the benefits they offer, especially in corporate contexts of different sizes.

Welfare Vouchers: when and how to use them?

Welfare vouchers, which are among the most popular fringe benefits, are versatile tools that companies can use at various times of the year to meet a variety of needs. Here are some occasions and ways of using them that demonstrate their effectiveness:

Examples of use

1. Productivity bonuses: At the end of a particularly strong quarter or year, welfare vouchers can be distributed to recognize employees’ contribution to the company’s success.
2. Holidays and special occasions: Companies can use welfare vouchers to celebrate holidays such as Christmas or Easter, giving employees the chance to shop for themselves or their families.
3. Corporate events: During conferences or company meetings, welfare vouchers can be used as prizes for team-building activities or internal competitions.
4. Support for everyday expenses: Some companies choose to distribute welfare vouchers to help employees cover essential costs, such as fuel vouchers, school expenses or household utilities.

Benefits for small businesses

It is not only large companies that benefit from corporate welfare; small businesses can also gain significant advantages from adopting welfare vouchers.

1. Employee loyalty: For a small company, where the relationship with workers is often more direct, offering welfare vouchers helps create a positive working environment, increasing loyalty and reducing turnover.
2. Improved competitiveness: In an increasingly challenging labor market, small businesses that offer corporate welfare can attract talent that would otherwise choose large organizations.
3. Economic accessibility: With favorable tax thresholds and the ability to adjust the amounts provided, welfare vouchers are a flexible solution that adapts even to the tightest budgets. For example, a small business can decide to issue gift cards of 200 or 500 euros to celebrate the success of a project without compromising its financial stability.
4. Digitalization and simplicity: Thanks to platforms such as GiftCardStore, even small businesses can manage the delivery of welfare vouchers in a completely digital way, minimizing administrative effort.

The importance of planning fringe benefits: a must for companies

Data highlighted by Google Trends shows that many companies tend to consider fringe benefits only toward the end of the year, when the financial figures are almost final. The peaks in interest recorded between October and December are a clear indicator of this tendency, with search volume rising sharply and reaching its all-time high in November, with an estimated value of 90,500 monthly searches. By comparison, the middle months of the year, such as March and July, show a significantly lower volume, ranging between 18,100 and 27,100 monthly searches.

This seasonality reflects a management of fringe benefits that is often reactive rather than proactive, limiting opportunities for strategic planning. Advance planning, on the other hand, would allow companies to integrate fringe benefits into their annual budgets, maximizing value for employees and optimizing corporate costs.

For last-minute situations, digital gift cards are an ideal solution. Thanks to how quickly they can be purchased and distributed, they can be rapidly integrated into corporate welfare programs, even in the final stages of the tax year.

The path to smart welfare

Welfare vouchers therefore represent a versatile and scalable solution, capable of meeting the needs of both large multinationals and small entrepreneurial businesses. The key to their success lies in the possibility of personalization and ease of use, features that make them an essential element of modern human resources management strategies.

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