Unpacking the Benefits of Merchandise Reward

Merchandise rewards are the easiest to implement and motivate participants!

As the end of year races towards us, we often see engagement in loyalty programs significantly increase. Especially B2B incentive programs with merchandise as the reward offer. The reason why? Merchandise is universally understood, and customers can share the reward value earned during the year between themselves and the business. When you have reasons like Christmas to share the rewards – why wouldn’t you!

Even better now is that strategically designed incentive and B2B loyalty programs with a merchandise reward can adapt to changing market and financial conditions, especially when it’s likely that customers will take the time to really look carefully at how they spend their dollars and make the most of their purchases. Needs vs wants.

Business customers, distributors and channel partners mean they’re likely to scrutinise offers to ensure they are getting benefits and value from their spending with your brand. When economic factors are hampering, too many businesses resort to using price cuts to drive more sales and attract new customers away from competitors. Unfortunately, they find that price cuts aren’t sustainable and can quickly pile on the pain in downturns.

Your brand must dodge the low-price trap, which you can do using the power of incentives to engage with distribution channels and spur sales. 

This is where Merchandise rewards are a great option in your “toolkit” of incentives and can give you the reason to move away from deep discounts and shift the conversation to benefits. Offering a solid value proposition for you and your customers.

Blog image 12 Oct
Sample promotion leading up to Christmas.

How does Merchandise Reward motivate businesses and customers alike?

Purchase Value

The product purchase value is higher when your customers are enrolled in an incentive program with merchandise rewards. This is because when they purchase your product, they get the added benefit of reward points which can be used for merchandise rewards of their choice.

Their purchases may also build “status” in the incentive program, giving them access to further rewards and benefits offered only to them (such as having a “VIP Members Club” for those who earn a certain number of points).

As a participant, merchandise reward act as a trophy value. They not only feel they’ve achieved something but often boast by telling others, like a trophy earned in a contest.

Imagine the feeling of having the latest barbecue you just “bought” with program points turning up on your doorstep. You get a spring in your step, and you don’t mind telling others in the office about it and boasting about your cooking skills on Instagram. The hype around your program reward sparks engagement and generates positive sentiment towards your brand.

Budget Control

Merchandise reward allows you to manage the program budget in several ways. For example, you can set a sales benchmark (against a dollar value) before paying out any rewards. This means you don’t pay out rewards until specific criteria have been reached. This helps protect how many points you spend in a catalogue and links that spend to the lifetime value of your customer. You also have access to points accrued and redemptions via reporting, which shows your liability and redemption behaviours so you can keep a tight rein over your budget and program.

The one thing to keep in mind here is that your threshold cannot be unrealistic. Imagine your customer purchasing your product worth $10,000 before qualifying for a toaster as a reward! Keep it realistic to ensure that customers are not demotivated or simply ignore the reward on offer due to its insignificance.

Rebates and Reduced Liability

A well-designed merchandise reward program has a model that makes you money. These typically work as rebates or point liability reductions, delivering savings around point values. This kind of model only happens in merchandise programs, where you buy at wholesale prices and add a rebate value to the cost of the goods. These models help defend questions about your incentive program’s return, as you can demonstrate the link to ROI and sales generated.


Merchandise rewards allow your participants to choose a reward that’s appropriate for them. It also allows you to tailor your merchandise reward specific to the industry, which your customers will receive very well as they would get an opportunity to earn the reward and reinvest into their business. The reward offer could be simple household needs, like kitchen appliances, compared to “nice to haves” like expensive watches. Your merchandise rewards catalogue becomes empathic and solves needs, making it a positive for you and your customer. As financial markets tighten, still being able to get what you ‘want’ – without dipping into your own cash- makes that item a reward.

The flexibility of merchandise rewards means you have plenty of choices to align your rewards to your and your partner’s business and/or personal needs. Merchandise rewards in your loyalty program allow you to have a catalogue that will help your partners reinvest in their business.

Better Partner & Customer Communication

An incentive program opens up additional direct communication with your channel partners. In addition to the incentive program messages, you can use this opportunity to announce new products or services and promote sales. If you know what rewards customers want, you can tailor messages to get a higher response compared to generic broadcasts.

Whether your participants are striving to earn rewards like outdoor grills and 60” HDTVs or redeeming points for smaller, quickly-earned items like movie tickets and books, an online merchandise rewards catalogue caters to a variety of personalities. Extensive choice ensures participants discover the best rewards to suit their individual styles.


Merchandise incentive reward is the perfect starting point for B2B rewards and incentive programs, but it also means that competitors may be doing something similar with the merchandise for their incentive reward program. Without this being a significant difference, you might not get the “cut through” you were hoping for. Your reward offers should evolve over time as the target audience or business requirements change. If you are kicking off a program for the first time, starting with a mix of rewards that gives a wider choice can help determine which rewards drive a behaviour change. A stagnant reward pool can be just as much an obstacle to a program as any strategic design that doesn’t match your intended outcomes.

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