Travel incentive

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Travel incentives are a way for companies to promote their business and increase sales by offering a free or discounted travel package to their customers. Many companies offer these incentives as a bonus for making a purchase, such as a cruise with the purchase of a new car. Other uses include rewarding individuals for business referrals and generating business leads.

[edit] Types

There are two main types of travel incentives available to busineses. The first type of incentive is based on fulfillment. This means that the incentive company wants the recipient to use the certificate and will ensure all certificates presented for fulfillment are fulfilled. These incentives are typically a little more expensive but still cost much less than an actual vacation and have been shown to keep the customers satisfied.

The other type of incentive is based on breakage or slippage. Breakage refers to the fact that more money will be made from people not using the certificates than will be lost from those who do. For example, if a company sells 1,000 incentive certificates for $10 each ($10,000 total) and only 5% (50) of the people use them, costing the incentive company a total of $100 per person (=$5,000), they have made a profit of $5,000. The cost is often offset on breakage certificates by the association of a timeshare company offering property tours to certificate holders. Many of the incentive companies receive a kickback for each person they send to the property who agrees to and takes a tour. The breakage is often created in the terms and conditions with strict stipulations that require recipients to do things such as send in a postal money order within a very short period of time. If the recipient sends in anything other than a postal money order or does not return it within the time specified, the certificate then becomes void.

While many breakage-focused companies will tell you that they fulfill all qualified certificates, it is important to check with the Better Business Bureau prior to using any incentive company. A pattern of complaints is a good indicator that the company is geared more toward the breakage type of incentive. As with all industries, there may be some complaints that were brought about that have been resolved. While complaints are important to review, some complaints in the travel incentive industry are brought about when a business using the incentive misrepresents the incentive to the consumer in order to make a sale and the consumer then makes the complaint about the incentive company.