Are Merchandise Safety Awards Overpriced?

If you compare what companies pay for traditional safety incentive merchandise items with those same items at retail the answer is emphatically....YES!  The problem is that the people who receive the value of these awards...your employees, are rarely if ever the same people who purchase them.  They often don’t see the price or value because they are hidden in “points” or “award levels” or other schemes.  For example, a company issues you a safety award and tells you to pick an item from a booklet or grouping of awards.  You have no idea of what your company paid for that award.   Although you do have an idea of what the award is worth. 

Frankly any employee can easily find out what an item is worth by quickly browsing the internet and reviewing any of the many shopping sites, the most prominent of which is Amazon.com.  If the actual cost of the award ever does come to light, and it often does, employees start to question why their company paid so much for the safety award.  Then the questions start...can I get a gift card for the same price you paid for the safety award?  This is probably the main reason why gift cards have jumped to the top of the list of most used recognition and incentive awards...because of their value.

The rewards industry has argued long and hard that they have value as consultative suppliers and view that value should be part of the price of the merchandise.  If they are a value, why not just charge for that service and provide the merchandise at a more competitive price? That way it won’t hurt the employee.

From our perspective in looking at this situation for over 35 years, we believe that even the most novice buyer would have to see that they are paying more than retail for the merchandise.  The question is how much more than retail, and is there a value in the infrastructure provided by the supplier sufficient enough to offset the higher price?  Research by the Incentive Foundation clearly states that nearly 80% of the client respondents didn’t use outside incentive companies for anything other than for fulfillment of the award.  That would seem to indicate that a buyer shouldn’t pay anything more than retail if the vendor is not providing any other service. 

Ask yourself this question.  Shouldn’t your employee receive as much of the value of your safety award budget as possible?  If you have $25, or $50 or $100 or more to reward an employee, shouldn’t they receive a choice of a safety award that approximates that value?   Unfortunately, that is usually not the case when traditional merchandise is the offered safety reward.  We have done extensive research and analysis and can confidently say that the standard cost for the traditional safety award merchandise used in this industry is, on average; 50% HIGHER THAN RETAIL.  We won’t argue here what “Retail” really is, but suffice it to say that with the advent of the internet, retail is easily determined by what the employee perceives it to be.  While they can understand fluctuation of pricing from one retailer to another, swings of up to 50% are deemed unacceptable. 

For more information on AwardSafety products or services or other white papers please contact us at awardsafetyinfo@cox.net