Christmas rewards | 15 MIN READ TIME

Is a Cost of Giving crisis looming for your business?


As Christmas approaches, UK businesses are facing a cost of giving crisis, whether they want to support employees through tough times or reward them for their efforts this year.

The problem: what do people really value when it comes to Christmas gifts – and what is seen as an empty gesture?

Love2shop – has more than 30 years of experience in helping employers get Christmas gifting right through good times and bad – so avoid potential pitfalls this year.


Employee gifts – give them something they appreciate

Christmas gifting in work is tricky. We may feel we know our employees and work colleagues well but according to the Motley Fool website, Brits on average throw away £32 million of Secret Santa gifts every year – which is a lot of waste!

Getting gifting wrong can also leave a sour taste, sending employees into Christmas feeling undervalued by a gift chosen with little thought.

If you’re considering offering gifts to your employees, ask yourself – do you really know what they want? Or ‘need’ for that matter.

Truth is, there is evidence at Love2shop – that recipients of gift cards are increasingly redeeming their gift cards in shops selling everyday essentials, which includes supermarkets. The ‘treat’ moment is now serving as something else.

If your employees might welcome the chance of doing an extra food shop or buying a household appliance over receiving a selection of wines, wouldn’t it be best to give them a choice?

Offering employees the flexibility to choose what they really want – or need – has a more positive impact.

Such non-cash gifts can also be given tax-free. HMRC’s Trivial Benefits allowance permitting you to give gifts up to the value of £50 for each employee with no additional tax to pay.

The Cost of Living – gifts to ease spending pressure

The cost of living and the cost of giving go hand-in-hand. As an employer you will already have seen employees beginning to struggle this autumn and winter with rising energy costs and general inflation.

To avoid embarrassment, take time to listen to how people feel. Speak to key individuals, even carry out an anonymous survey – see how people are feeling in your business and what support they would like to see.

You may find that they don’t really want the traditional bottle of bubbly or box of fancy chocolates, but something flexible, such as an exclusive festive-themed Love2shop multi-retailer Gift Card, which allows them to choose their own benefit. They can accept the gift without the risk of stigma attached to a ‘handout’ and choose to spend it on essentials like the weekly shop, new winter coats for the kids or little luxuries for the festive season.

To take things one step further, offering employees an Everyday Benefits Card is a cost-effective way to help them spend less on every shopping trip. By pre-loading funds onto the card at a 7.5% discount, they save on purchases across a range of retailers throughout the year. It’s a great way to offer longer-term support to your employees.

The Christmas party – don’t force the fun

Since Covid, the Christmas party has had a mixed return. Some people have been keen to get back to ‘normal’ while others remain more cautious – so what should you do?

Ask your workforce – there’s no point putting deposits down for a venue, food and entertainment if only a handful of people are going to turn up. Can they afford the taxi home, say? So run an internal survey to make sure you’re investing in the right treat for your staff.

If you do choose the Christmas party option, remember – similar to trivial benefits, HMRC allows employers to spend £150 per employee on an annual social event tax-free. Just remember, if you go over the threshold you have to pay tax and National Insurance on the entire spend, not just the difference and this threshold INCLUDES VAT – so don’t get caught out!

Alternatively, you may choose to go for a nice meal together. That way it’s easier to control who your group comes into contact with and to be respectful of those whose culture means they don’t drink alcohol or have specific dietary requirements. Again, this would qualify for the £150 per-head tax allowance.

Whatever you opt for, remember to consider additional expenses such as travel costs and baby-sitting. With everyone trying to balance their household budgets, travel or even hotel stays may be beyond employees’ reach this year so it’s a good idea to avoid additional expenditure for each employee.

You may decide to axe the Christmas party and offer Love2shop Gift Cards or digital e-codes instead. This gives employees the freedom to choose whether to organise a smaller get-together with work friends or offset some of the rising costs of Christmas this year. Love2shop e-Codes can also be scheduled to arrive via email at any time – even on Christmas Day – so it’s never too late to bring some festive cheer.

“Christmas gifting can be a challenge for businesses,” said Frank Creighton, Director of Business Development at Love2shop.

“The right course of action is complex. The ‘cost of giving’ isn’t just about how much it might cost the company in expense but how a company will be judged for its opportunity to show it cares and understands – which has a different sort of cost.

“Love2shop has more than 30 years of experience in gifting and rewarding and we’ve helped businesses get it right through recessions and recoveries. Gifting may seem more complex than ever but we have developed simple solutions so that employers can get gifting right for their workforce.

“Multi-retailer Love2shop Gift Cards and e-Gift Cards offer incredible flexibility. Employees can choose how a gift can be used – whether that remains as a treat, or goes on essential things. Similarly, gifting a pre-loaded Everyday Benefits Card which offers discounts all year-round will provide a longer-term feeling of thoughtfulness when colleagues feel valued, ensuring that your well-intentioned Christmas gift brings a smile to their faces.”

Everyday Benefits Cards and Love2shop are flexecash products. Flexecash is the prepaid card platform that issues flexecash Love2shop Cards. This facility is provided by Park Card Services who are Authorised and Regulated by the Financial Conduct Authority to issue electronic money. FRN: 900016.

Love2shop Cards are regulated by the Financial Conduct Authority and as such we may need to complete an electronic identity check.

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