The ABCs of Points & Reward Stores

Quick Links:

• Introduction
• Product Mix
• Payment
• Adding Value

Now updated for 2025!

Reward stores, point stores, incentive stores – these are all different names for what is essentially a web site where people go to use certificates, points or accrued currency to get a gift for their work at a company. Most of these stores operate using an alternative currency – points, “bucks” or what have you – and the gifts are products like a shirts or a bluetooth speakers or travel mugs.

Reward stores might seem confusing at first. They’re not exactly company stores, because they often have high-end, “gift” products available (like electronics and brand name products). Those products are also called “incentive” products, thus the terms reward store and incentive program are often used interchangeably. Ultimately, a reward program typically consists of:

However, this common thread frays when looking at the typical product selection of a reward store. There is no “typical” product selection, because reward stores often serve different needs. A company store generally sells branded apparel and promotional products, with an emphasis on branded. But a reward store might have premium, unbranded items as well.

It’s not uncommon to see a branded golf shirt, a branded pen and an expensive, unbranded music player or set of headphones in a reward store. Sometimes you have to go beyond branded promotional items in order to entice employees to earn points.

And reward stores require the employee to earn the rewards in some form. Here are some of the most common ones we run across:

Product Mix

As mentioned above, reward stores may contain all sorts of products, but it generally boils down to these two categories:

High-Value Branded Products: We don’t recommend stocking your reward store with $0.75 branded pens, though you can try that if you really want to. Instead, most branded products in a reward store will be, well, rewards – higher-end apparel, trendy travel tumblers and outdoor and sports gear (also known as “retail” products, though that distinction is not always meaningful). It’s true that some reward stores are just slightly nicer company stores, but if you want to motivate employees to earn rewards, you need to make the products rewarding.

Incentive Products: Incentive products can really be anything you want them to be, but they are typically unbranded premium items – digital cameras, music players, gourmet foods, cookware or anything else that your employees will find appealing. There are fulfillment companies that specialize in these products and stock them for quick shipment.

Quite often, reward stores have a mix of the above. Because of that, it’s good to use an e-commerce platform that can split ordersand send the fulfillment requests to their appropriate vendors. For instance, you might stock the branded products in your own warehouse, but the incentive products get fulfilled entirely by a third party provider. Your store should be able to route the requests as needed.

Payment

Payment in reward stores could be an accounting lesson unto itself. Part of the reason reward stores exist in the first place is to use an alternative currency to buy things. You might be wondering: What exactly is the point of that?

If you want people to accumulate small, incremental rewards for something bigger – say, five awards of 10 points each over six months, so they can buy something worth 50 points – you need to give them some way of tracking that. So, why not just tell them they have 50 dollars saved up? Two reasons:

• Liability/accounting: When you give people real money to spend (like a gift card), you may have to keep track of it as a liability in some form. By using currency that has no actual cash value, you have quite a bit more freedom – you can expire it or adjust its value as much as you like, and (depending on what your accountant tells you) you may not have to treat it as a cash liability.
• Value perception:: Points, bucks, etc. affect value perception. If you say a pair of headphones is $50 in your store but your employee sees it at Amazon (remember, incentive products are often just regular retail products) for $30, they’ll wonder why they have to pay that much money when they’re being rewarded. Points allow you to avoid retail price comparisons.

There is one other wrinkle in reward store payment that may or may not apply to your store: Point equivalency. Picture this: Your employee has collected 95 points and they really want a 100-point gift. They don’t have an opportunity to get more points anytime soon. What can they do?

In many reward stores, they can make up the difference with their own money, by paying the balance with a credit card. This requires a cash equivalence for the point values, which of course can defeat the purpose of avoiding retail price comparisons.

However, in most situations an employee just wants to make up a small shortfall, and allowing them to do that with a credit card won’t blow up your value perception. With some reward stores, you can even set a minimum percentage of the order to be paid with points, so that employees are still encouraged to earn points.

Adding Value

As a distributor, you can add a lot of value to a reward program. First of all, many companies don’t really understand the ins and outs of these programs, so your expertise can help guide them to the right solution.

It’s important to remember that reward stores exist to accomplish a goal: A safety reward store should result in a safer workplace; a recognition store should result in better performance or improved morale.

It sounds obvious, but don’t forget to ask: What’s the goal of the program?

Your value really comes into play with product selection. Company stores often sell similar goods year after year. With a reward store, you need to be in touch with the most desirable promo and retail products. Unlike a company store where employees are often required to buy a shirt or hat, a reward store needs to be enticing. Your skills as a merchandise expert are key.

A reward program can be more challenging than a vanilla company store, but the rewards (see what we did there?) are often worth it. You build better lock-in with your customer, and product prices are often much less important than the features of the store and your expert management of the program.