Industry Outlook for 2026: Non-Cash Rewards Shift Toward Smarter, More Targeted Investment
Gift Cards: Values on the Rise
Merchandise: Differentiation Through Perceived Value
Event Gifting: Fewer Touchpoints, Greater Impact
Regional Outlook: Different Pressures, Shared Strategies
Technology and Administration: Internal Control with Digital Support
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As organizations head into 2026, the non-cash rewards landscape is defined by optimism paired with financial discipline. According to the Incentive Research Foundation’s Industry Outlook for 2026: Merchandise, Gift Cards, and Event Gifting, companies across North America and Europe remain confident in economic conditions, yet face flat budgets, rising costs, and increasing expectations to do more with less. The result: fewer rewards, higher perceived value, and greater emphasis on personalization, technology, and strategic impact.
The 2026 outlook makes one trend clear: organizations are not retreating from non-cash rewards—they are refining them. By focusing on fewer, higher-impact rewards, leveraging technology, and aligning offerings with participant preferences, companies are positioning rewards and recognition as strategic tools for engagement, culture, and long-term performance.
The IRF collected 400 responses during August and September from full-time incentive professionals in North America and Europe. Respondents represented organizations across the US, Canada, and seven European countries, with the majority managing employee, sales, or channel reward programs internally. The sample was predominantly corporate, with increased representation this year over last year's report from organizations generating more than $100 million in annual revenue.
Gift Cards: Values on the Rise .png)
Gift cards remain the most widely used reward type on both continents, accounting for roughly one-third of total reward allocations. Nearly 70% of North American organizations and just under 60% of European organizations expect gift card usage to increase in 2026.
While brand-specific gift cards continue to dominate, the mix is shifting. Open-loop prepaid cards are declining, while voucher-style gift cards are growing—particularly in Europe. Average gift card values are rising as well, reaching $193 in North America and holding steady at €189 in Europe, signaling continued investment in rewards that balance simplicity, flexibility, and participant choice.
Merchant preferences also reflect economic realities. In North America, dining gift cards now lead usage, surpassing online-only retailers for the first time in years, followed closely by apparel. In Europe, online retailers remain the top choice, though electronics gift cards saw significant growth year over year.
Merchandise: Differentiation Through Perceived Value
Merchandise continues to be a powerful differentiator, particularly in channel programs, which consistently outspend employee and sales initiatives. In North America, 84% of programs include merchandise rewards, with more than half planning increased usage in 2026. Europe trails slightly in adoption but shows similar growth intent.
What stands out most is spend. Average merchandise reward values rose sharply—$276 per instance in North America and €306 in Europe—along with notable increases in on-site gifting spend. Apparel, food gifts, and electronics remain the most popular categories, reinforcing a preference for practical, premium items with everyday relevance.
Event Gifting: Fewer Touchpoints, Greater Impact .png)
Event gifting is being reimagined, according to the report. While a majority of organizations expect modest budget increases, only about 10% anticipate growth beyond inflation.
Gift cards have overtaken merchandise as the most common event reward, now included in over 80% of North American programs and more than 75% in Europe. Traditional swag bags are declining in favor of curated, experience-driven gifting—integrated into activities, marketplace-style selections, or locally sourced items that enhance memorability while controlling costs.
Regional Outlook: Different Pressures, Shared Strategies
North America enters 2026 with rising economic optimism and steady regulatory perceptions, while Europe shows declining confidence in both areas. Despite this divergence, reward strategies are converging. Both regions prioritize internal financial forecasts over external pressures, and both show parallel growth in gift cards, merchandise, and experiential rewards. Notably, incentive travel is poised for stronger growth in North America, while Europe remains more measured in expansion.
Technology and Administration: Internal Control with Digital Support
Most organizations continue to manage rewards internally—84% in North America and 79% in Europe—but technology investment is accelerating. More than 60% of programs in both regions plan to increase spending on platforms, apps, and digital tools, signaling a shift toward integrated, data-driven reward ecosystems.
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