Tips for Giving Gifts during the Holidays
Gifting is a common thread during the holidays. We buy gifts for others and we receive gifts too. We look forward to it all year long. But, sometimes we can be unsure about what the right types of gift to give are. It’s not uncommon for small businesses to give gifts to customers and vendors alike. But, what type of gifts should you consider giving?
A great idea for a gift is to give promotional branded products to customers and vendors alike. A T-shirt with your business name on it will be worn, turning the gift into free advertising to all who see it. A beautiful pen set with your business name on it to employees will also create warm feelings to the employee who receives it. What’s more, branded gifts do not carry the problem with the 25-dollar per person limit since all brandable items are considered a marketing expense.
Often times the very best gift is one that is truly useful to the recipient. Sure, it’s nice getting chocolate, but if you don’t sell chocolate the gift might be eaten and forgotten the next day. Giving something a vendor, customer or employee can use that is related to your business is something that will be truly appreciated. It can sometimes take longer to come up with gift ideas that are truly useful, but it can be more than worth it.
If you have many vendors, you can purchase gifts from them to give to your clients and customers, and hope that this will give them the idea to do the same for you. This is a great way to introduce people to new products and services. Form a JV partnership with a business that sells complementary items to your same audience. Agree that you’ll give your customers their products for gifts and they will give an equal amount of your products to their customers. (Hint: This is a great list-building exercise)
Whether in the form of a gift certificate or actual cash, giving cash is a good choice in many cases. Gift certificates are wonderful when given for needed items. Some businesses, for instance, give all their employees a store certificate to pick up a free chicken or get a free oil change – something that is truly useful. Cash is always a welcome gift to contractors and employees.
Consider the Tax Consequences
When giving gifts to anyone, there is always a tax consequence or benefit. Currently a profitable business can deduct the cost, up to 25 dollars per recipient, for the gift. So, if you give gifts worth more than that, you don’t get to deduct it. In addition, if you give cash gifts to employees or contractors, they will have to pay taxes on the gift and you’ll have to pay additional payroll taxes.
No matter which way you decide to go with giving gifts to vendors, customers, contractors and employees, remember to keep excellent records of all purchases and gifts. This will keep you clear with the tax man, and also help you remember each year what you did in previous years so that you can come up with more original ideas each year.