For many companies, issuing incentive travel certificates is a simple yet effective way to motivate their employees. After all, almost everyone appreciates getting a gift card.

However, in some instances, these travel certificates are not as easy to use as other types of gift cards.

For one, the company issuing the travel certificate has to pay a high cost upfront in order to limit restrictions and make it more convenient for the recipient. In some cases, the certificates have restrictions and vague language like "subject to allotment" or "subject to seasonal surcharges" which present hassles to the end user.

Another area where travel certificates can disappoint recipients is in the terms and conditions written by the manufacturers. Simply put, these terms and conditions suggest that the manufacturer is encouraging the end user to avoid using the certificate.

All of these contribute to the frustration of the recipient, which can backfire on your company. In the end, it's the manufacturer that profits while the company that issues these certificates absorbs many of the hassles involved.

Why, then, do companies still use these certificates for their incentive programs?

The appeal of these certificates hinges greatly on the low cost enjoyed by the company issuing these certificates. In most cases, the costs of these certificates are well under the current rates for accommodation and transportation, thus making them enticing. However, the certificate's manufacturers still have to profit, so it is fairly common for these certificates to be valid only for the lowest level of rooms. Plus, they count on the recipients not using the certificates given to them.

Many manufacturers use a breakage model where a substantial number of certificates are not redeemed at all. This offsets the low cost of each certificate, allowing them to profit well.

That is not to say that all travel certificates are essentially useless. If you want to issue these to your employees or even your loyal customers, you have to carefully look at your available options. Ideally, the certificates you choose should not cost the recipients additional costs and should not have vague and unfavorable terms and conditions. Failure to check these can undermine whatever your goals are for issuing these travel certificates. Instead of reaping the benefits of a good incentive program, your use of a travel certificate can make you look bad in the eyes of the recipients, whether they are customers or your key employees.