BBB Business Tip: How to pick the right corporate gift

As a business owner, you may work with a few clients that you feel deserve a gift of appreciation. Or you may also want to thank your employees for their hard work with something thoughtful. But how do you go about selecting the appropriate gift, and what are the tax rules surrounding corporate gifts? BBB has a few suggestions and tips to help you pick the perfect corporate gift.

Tips for corporate gifting 

• Thoughtful gifts maintain and strengthen relationships. Gifts are a safe way to show appreciation and build a sense of connection with business contacts and employees. Empower your team to select specific and thoughtful gifts that are appropriate to the relationship. Avoid spending money on gifts that aren't practical for the recipient. Instead, consider the likes and needs of clients, employees, or business associates. For example, for a sales professional who travels, something considerate such as a neck pillow or power bank might be an option. For remote workers, home office gifts, such as heated mugs or office plants, are a possibility. Keep in mind some people might not feel comfortable receiving an edible gift, or may have allergies that need to be considered.
  
  
• Choose appropriate, useful gifts. Avoid spending money on gifts that aren't practical for the recipient. Instead, consider the likes and needs of clients, employees, or business associates. For example, for a sales professional who travels, a neck pillow or power bank might be an option. For remote workers, home office gifts, such as heated mugs or office plants, are a possibility. Keep in mind some people might not feel comfortable receiving an edible gift.
  
  
• Consider working with a gifting company. If the gift list is a long one, research gift vendors. Pay close attention to the quality of the gifts offered, customer service, gift list management, and tracking and reporting. A vendor should have a spotless reputation and excellent customer service. Research possible vendors on BBB.org and look for BBB Accredited Businesses, which adhere to BBB’s Standards for Trust.
  
  
• Understand the tax rules. Business gifts are tax-deductible, but there are limitations. In the United States, gifts are deductible up to $25 of the cost of the business gift per individual per year. Gifts worth $4 or less with the business name on them (i.e., pens or keychains) are not deductible. "Experience" gifts, such as tickets to the theater or a sporting event, are not deductible either. In Canada, employees can receive an unlimited number of tax free gifts or awards, so long as the total fair market value is less than $500. Visit the Government of Canada website for guidance on business/employee-related gift-giving deductions in Canada.If you are giving tax-deductible gifts, keep accurate records of the gift, including the cost and purpose, as proof of the expense. 
  
  
• Check that the gift is legal. It is legal for businesses to give gifts to clients and vendors; however, there may be some exceptions. For example, the U.S. Office of Government Ethics recommends that gift givers and recipients observe the government's ethics rules when federal employees are involved. In the U.S., inappropriate gifts could be considered bribery. In Canada, it is illegal to promise or offer a benefit of any kind to a government official.
  
  
• Avoid making the gift an ad. Any gift sporting the company logo should be well made, in tasteful colors and with the logo understated enough not to look like an advertisement. If it seems like nothing more than an act of self-promotion, the recipient will not feel valued or appreciated.
  
  
• Spend the right amount. When considering how much to spend, consider how many years the individual has worked for or with the company and, in the case of a business client, how much they spend with your company each year. Inexpensive gifts will come across as stingy, and very expensive gifts could seem excessive. As a general rule, Forbes suggests choosing gifts in the $50-$200 range.
  
  
• Mind the packaging. The first thing a gift recipient sees is the gift packaging. The gift wrapping conveys gratitude as well as the actual gift. Especially if you are shipping the gift to its recipient, ensure that the wrapping and packaging are of high quality.
  
  
• Include a personal note. A handwritten note is more valuable than an email or text. If possible, consider including one with the gift. Even a printed note with a personal message is still a good idea.
  
  
• Don't limit gift-giving to the holiday season. Corporate gifts are generally sent between Thanksgiving and New Year's Day, which makes individual gifts stand out less. Make a stronger impression, and save money too, by sending business associates a gift at other times of the year when they are least expecting it.

For more information

See the BBB Tip: Smart shopping online for additional recommendations and the BBB's tips for safe delivery of your online purchases.

When searching for a gifting vendor, always look for a business that follows BBB Accreditation Standards and BBB Standards for Trust. 

For more resources, see the BBB Small Business Resources page. Learn how to become a BBB Accredited Business.