Academic journal article Public Relations Journal

Firms Say Thank You with Business Gifts

Academic journal article Public Relations Journal

Firms Say Thank You with Business Gifts

Article excerpt

People rarely give gifts without expecting something in return. Whether it be reciprocated with respect, goodwill or a simple thank-you, a gift can state what words cannot. Business gifts--which most companies consider a vital part of conducting business--can express appreciation, nurture new clients or create awareness of a company and its products.

Public relations firms are often asked to recommend and/or purchase gifts for their clients. Many firms also give gifts to their own customers at the end of the year. Some even select themed items on a regular basis to attract media attention for publicity campaigns. Therefore, understanding the rules of gift-giving is an asset to any public relations professional.

Approximately $3.5 billion was spent on business gifts in 1990, according to Business & Incentives magazine (formerly Premium Incentive Business magazine), which publishes an annual industry update. Holidays are generally the most popular time for corporate gift-giving. But some business executives prefer to present the gift at the time a service is rendered. Year-round thank-yous account for 40% of the occasions on which gifts are given, B&I's latest survey found.

The most popular gifts range from pen sets to sportswear to electronics, according to the survey. Business gifts are most often given to major clients (70%), employees (58%) and prospective clients (31%). Only 5% of gifts go to members of the press or media, the survey found.

Most of the business-gift buyers polled prefer to give items that are customized, bearing the company's name, logo or slogan. The survey showed that one-third of the executives polled "always" have business gifts customized, 54% "sometimes do" and 13% "never do."

"A customized item creates a more lasting and memorable impression. When people visualize the item, they'll visualize the person who gave it to them," stated Bonnie Ott of Bonnie Ott Promotions Inc., a New York City-based advertising specialty and promotion firm which provides public relations practitioners with gift idead and customized gifts. Corporate gifts, she added, are designed to help increase a client's audience and awareness through their targetability and creative impact.

Know the rules

In the past, confusion over business-gift spending has caused some companies to either spend too much, which can sometimes be misinterpreted by the recipient as being a bribe, or give inappropriate gifts that are too personal or not personal enough. As with giving any gift, the key factors should be imagination, good taste and thoughtfulness. Corporations having difficulty deciding where to draw the gift-giving line or concerned about committing a gift-giving faux pas can utilize the services of gift counselors, either in private practice or affiliated with the personal shopping divisions of major department stores.

How much is too much? Where is the line drawn on business-gift spending? The majority of companies usually spend around $25, since gifts costing $25 or less are tax deductible as business expenses. Incidental costs, such as engraving, packaging or mailing a gift are not included under the $25 limit. Users trying to circumvent the $25 rule may run into trouble with the Internal Revenue Service (IRS). For example, expensive gifts to one's own employees might be considered "disguised compensation"-an attempt to evade payroll taxes. Such gifts should be listed on the employee's W-2 form with salary and other benefits. The IRS also disapproves of giving gifts to members of a client's family. Unless the family members themselves have a bona fide business relationship with the giving company, the gift-giver will only be allowed to deduct the $25 for the client's gift. On the other hand, gifts of "nominal value", such as hams and turkeys, awarded to employees at holiday time don't count as business gifts by IRS standards. …

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