Is it better to give a gift card or gift for long service recognition?

Our experience of long service recognition gifts vs gift cards

The scene has been set with candlelight and red roses. I get down on one knee in front of you and carefully pull out what has been weighing on mind and my pocket all evening. The little velvet box pops open with a satisfying “thock” and reveals a diamond ring that sparkles as much as your eyes. 

This is a favourite analogy at HW Holdsworth we like to use when comparing a physical gift to a gift card. How different would that gesture of commitment be if the little box revealed a gift card, albeit to the value of the diamond ring?

Gift cards are an emerging trend in recognition awards, and some of our clients partner with us to supply gift cards as long service recognition. We had a theory as to how these gift cards were spent, and so crunched some numbers. 

Here are the results:

Bar graph of gift card spend by Merchant Category Code (MCC) from 3127 transactions between 1 May 2023 and 30 April 2024 (12 Months).

To fairly compare long service recognition gifts with gift cards for the same purpose, we thought we should first look at the aims we are trying to achieve with the award process.

What is the aim of a long service recognition gift or award?

• Recognise loyalty and commitment
• Reinforce organisational values and culture
• Enhance employee morale and engagement
• Improve retention and reduce turnover
• Publicly acknowledge, peer recognition and inspiration
• Support employer branding of investing in people over the long term

Based on these aims, is it better to give a gift card or a gift as a long service recognition award?

🎯 1. Recognising Loyalty and Commitment

Physical gift: Feels symbolic and commemorative of a milestone — something to keep and display (e.g. quality watch, artwork, or tech item).
Gift card: Feels transactional — easily spent and forgotten, like a bonus or voucher.

A physical gift better represents the permanence and significance of long service than a spendable gift card.

💼 2. Reinforcing Organisational Values and Culture

Physical gift: Reflects a thoughtful gesture aligned with a people-first culture. Can be branded or chosen from a values-based catalog.
Gift card: May not reflect company values and doesn't convey the same care or symbolism.

A tangible item aligns more closely with a culture of thoughtful recognition and meaningful celebration.

💖 3. Enhancing Morale and Engagement

Physical gift: Can be displayed, talked about, and remembered, deepening emotional impact.
Gift card: Once used, it’s gone — the positive feeling is fleeting.

A physical gift creates a longer-lasting emotional connection and sense of appreciation.

🧲 4. Improving Retention and Role-Modelling Loyalty

Physical gift: Sets a visible precedent — colleagues see the gesture and feel inspired to stay.
Gift card: No lasting impression; doesn't serve as a visible motivator to others.

A physical gift has social and symbolic value that helps reinforce retention more effectively.

🌐 5. Public Acknowledgement and Peer Recognition

Physical gift: Easier to celebrate and present at a ceremony or in photos; adds formality and occasion.
Gift card: Less appropriate for public presentation — lacks gravitas.

A physical gift lends itself to meaningful public recognition and celebratory moments.

📈 6. Supports Employer Brand and Perceived Value

Physical gift: Seen as a thoughtful gesture of high value, even if cost is similar.
Gift card: Can feel like “lazy” recognition or compensation, not appreciation.

A physical gift has a higher perceived value and reinforces your reputation as a great place to work.

🧾 Bonus: Australian Tax Advantage

Under FBT law, a physical gift for 15 years long service under $1,000inc GST may be FBT-exempt.

Summary

• Gift Cards offer convenience and flexibility but may lack emotional impact.
• Physical Gifts, especially when personalised and presented with care, create memorable recognition moments and are compliant with Australian FBT exemptions for long service.
• HW Holdsworth enhances the entire experience with end-to-end support — from gift sourcing and gift choice guidance to branded presentation and scalable distribution.

Recommendations

1. Reflect on your current long service recognition process. Download our audit checklist here.
2. Design your long service recognition gift policy to maximise tax efficiency.
3. Consider carefully whether physical gifts or gift cards work better for your organisation – HW Holdsworth can help you offer a mix of these to gain the benefits of both types of gifts
4. Include other year-round recognition such as employee benefits to offer other types of recognition such as travel experiences or discounts that are not captured in long service recognition strategy, adding variety to your recognition programme.

Conclusion

So... back to that velvet box.

If you’ve ever proposed — or imagined doing so — you know it’s not just about the dollar value of the ring. It’s the meaning behind it. Long service recognition is a similar gesture. You’re saying: You matter. Your time here has value. You are appreciated.

A gift card might get spent on groceries or fuel. Useful? Absolutely. Memorable? Probably not.

But a physical gift — especially one that’s carefully chosen, beautifully wrapped, and visibly presented — says something different. It becomes a marker in time. A keepsake. A story.

So the next time you open that little box for a long-serving employee, ask yourself: will it spark joy... or just pay a bill?

Contact us to find out how you can offer a meaningful and personalised choice of long service gift to your employees to recognise their long service.