Why experience gifts create lasting happiness (and gift cards don't)

When it comes to recognising employees or thanking clients, most of us default to what feels safe. A gift card. A hamper. Maybe some branded ‘swag’.

Here's the thing: there's decades of research into gifting psychology showing these aren't just less effective than experience gifts - they're fundamentally different in how they create (or don't create) lasting happiness and connection. And that’s the aim, right?

What is experience gifting?

Experience gifting means giving someone a memorable activity or event - like a spa day, adventure experience, gourmet meal, or weekend away - rather than a physical item or voucher. Research published in the Journal of Personality and Social Psychology shows experiences create significantly more lasting satisfaction than material gifts of the same value.

That's why we're absolutely jazzed to announce our partnership with Virgin Experiences, bringing curated experience gifting to Huggg. But before we talk about that, let's talk about the science.

Key research:

• Experiences create 25% more lasting satisfaction than material gifts
• Experience gifts strengthen relationships more than material gifts
• Experiences improve in memory over time; possessions depreciate psychologically

The experience advantage: what 20 years of research tells us

Back in 2003, psychologists Leaf Van Boven and Thomas Gilovich at Cornell University published groundbreaking research in the Journal of Personality and Social Psychology that totally transformed how we understand how purchasing things impacts happiness.

Their findings? People get more of a long-lasting kick out of experiential purchases, rather than buying ‘things’.

The study, involving over 1,200 participants, showed that when people reflected on purchases they'd made, paying for experiences - concerts, holidays, meals, adventures - made them a lot happier than spending the same on physical items.

Sure, 2003 was a long time ago now. But this wasn't a one-off finding. Since then, dozens of studies across multiple countries and demographics have confirmed what researchers now call the "experiential advantage" - a consistent pattern of ‘experience gifting’ outperforming material goods across multiple measures of wellbeing and satisfaction.

For employee recognition and client gifting, this is huge.

Why do experiences beat physical gifts? The psychology explained

So what's actually happening psychologically? Why does a spa day create more lasting happiness than a shortbread-stuffed gift basket of the same value?

1. Experiences become part of who we are

Research published in the Journal of Consumer Psychology by Amit Kumar, Matthew Killingsworth, and Thomas Gilovich (2014) found that experiential purchases become part of our identity in ways that material possessions don't.

You don't say "I'm someone who owns a nice pen." But you absolutely say "I'm someone who loves rollercoasters" (especially if you’re Huggg’s Commercial Director, Lewis!). 

For employee recognition, this matters. When you gift an experience, you're not just giving someone a thing - you're giving them a story they'll tell, a memory they'll keep, and something that becomes part of how they see themselves. And that makes them feel more positively about your organisation, in return. 

2. Experiences improve in memory (while possessions get worn out)

Here's where it gets interesting. Material possessions decay, go stale, or wear out - both literally and psychologically. The biscuits get munched. The pen runs out of ink. That gadget gets outdated. 

And more importantly, the happiness you get from them fades quickly through what psychologists call the ‘hedonic treadmill’ - where we all return to a baseline, from positive or negative influences.

But experiences? Their impact only gets stronger over time.

Research by Mitchell, Thompson, Peterson and Cronk (1997) found that people tend to remember experiences more fondly as time passes, filtering out the negatives (the relentless drizzle, that rude man at the help desk, the overpriced coffee) and keeping the highlights (the gorgeous view, the side-splitting laughter, the moment itself). It’s called ‘rosy retrospection’, and it's one reason that experience gifting creates lasting happiness while physical gifts fade into the background.

3. Experiences create social connection

A 2014 study in *Psychological Science* by Caprariello and Reis found that the happiness boost from experiences is largely driven by their social nature - even when the experience is a solo one.

Why? Because experiences give us stories to share. They create conversation. They build connection. And in your workplace, that’s powerful. Imagine gifting your team a range of different experiences, and fueling the Slack chat with something undeniably exciting?

Gift someone a bottle of wine, and it's consumed and forgotten. Gift them a wine-tasting experience, and they'll tell that story at dinner parties for years. Or indeed, at your next team meeting. 

The gift card problem: why choice isn't enough

"But wait," you might say. "Gift cards give people choice. Isn't that better?"

Here's what the research says: sort of, but not really.

Gift cards solve one problem (not knowing what someone wants) but create several others:

1. They feel transactional

A 2011 study by Steffel and LeBoeuf in the Journal of Economic Psychology found that gift cards are perceived as significantly less thoughtful than both physical gifts and experiences - even when recipients acknowledge they're more "practical."

The issue? They lack what researchers call "symbolic value" - the sense that someone put thought and care into selecting something meaningful.

2. They create decision paralysis

Research on choice overload by Schwartz and colleagues shows that too much choice often leads to... no choice at all. That gift card gets lost in the bottom of a handbag because choosing how to use it feels like work.

3. They don't create memories

No one ever said "Remember that amazing gift card Sarah gave me in 2024?"

Gift cards are forgotten almost immediately after they're spent. There's no story. No memory. No lasting emotional impact. That's a problem if your goal is meaningful employee appreciation or memorable client experiences.

Experience gifting: the best of both worlds

This is where experience gifting gets really interesting - and where our partnership with Virgin Experiences comes in.

Experience gifts combine:

• The thoughtfulness of a curated gift (you've chosen something meaningful)
• The choice of a gift card (recipients can pick the specific experience and date)
• The emotional impact of an experience (they get a story, a memory, something lasting)

Research from 2016 by Cindy Chan and Cassie Mogilner, published in the Journal of Consumer Research, found that when you give experience gifts, it strengthens the relationship more than giving material gifts - and critically, this effect is stronger when the giver thoughtfully selects the experience category but allows recipient choice within it.

That's exactly what we've built with Virgin Experiences on Huggg. 

What this means for your gifting strategy

Let's be clear: we're definitely not saying physical gifts or gift cards are terrible. We’re big, big believers in the power of gifting - for employee or client recognition, for building human connection, for making someone’s day.

But if your goal is to:

• Create lasting appreciation (not just a momentary "thanks")
• Strengthen relationships (not just tick a box)
• Build memorable culture (not just send something nice)
• Stand out with clients (not send the same wine everyone else does)

Then the research is unambiguous: experience gifting outperforms material gifts and gift cards across every meaningful measure.

When should you choose experience gifts?

Experience gifts aren't right for every situation. Here's when they shine:

Best use cases for experience gifting:

• Milestone moments (big anniversaries, major achievements, significant client wins)
• Relationship-building (when you want to strengthen bonds, not just transact)
• Memorable recognition (when you want something they'll remember months or years later)
• Team experiences (shared activities that build culture and connection)
• High-value clients (differentiate yourself from generic corporate gifts)
• Remote teams (personal gifts that don't require office presence)

When to stick with alternatives:

• Immediate, on-the-spot recognition (experiences need planning time)
• Very low budgets (under £30-40 where experience options are limited)
• When you genuinely know nothing about the person's interests
• Quick transactional thank-yous where simplicity trumps impact

The business case: why experience gifting matters beyond "nice to have"

The research on experience gifting isn't just about happiness - there's a clear business case here too.

Employee retention

Studies from Gallup show that employees who feel genuinely appreciated are more likely to stay with their current employer - if they don’t feel recognised, they’re twice as likely to quit the next year. The key is “meaningful” and “memorable” recognition. 

Experience gifting ticks both boxes.

Client relationships and lifetime value

A 2013 study in Harvard Business Review by Dixon, Toman and DeLisi found that memorable client experiences (including thoughtful gifting) are one of the strongest predictors of client retention, referrals, and increased spending.

You're not just saying thank you. You're creating a memory that keeps your brand front-of-mind when they're making future decisions about who to work with.

Team culture and collaboration

For team experiences (think group activities, shared adventures, or gifts that bring people together), the research on social bonding is clear: shared positive experiences create stronger team cohesion than any Slack channel or structured team-building exercise.

This is especially powerful for [hybrid and remote teams](#), where creating shared cultural moments is harder but even more valuable.

How it works: Virgin Experiences on Huggg

Now you might understand why we’re so excited about this partnership. Now experiences are a huge part of Huggg’s offering - and we can’t wait for you to benefit. Here’s how it works:

1. Curated choice

You can either choose a specific experience - based on what you think your recipients will love - or pick a ‘collection’ - where your employee and client can choose for themselves from experiences like spa days, adventure activities, gourmet dining, and much more.

This gives you the thoughtfulness of curation without the risk of getting it wrong.

2. Address-free, GDPR-compliant gifting

Like everything on Huggg, you send a link via email, SMS, Slack, or Teams. Recipients add their own details when they choose their experience. No awkward data collection for you, no spreadsheets, no GDPR headaches..

3. Flexible value options

Whether you're recognising a team win, celebrating a work anniversary, or thanking a client for a major deal, you can set a budget that fits the moment - from £25 experiences up to premium weekend getaways worth hundreds.

4. Trackable and measurable

See who's claimed their gift, who hasn't, and what types of experiences resonate most with your people. Use that data to refine your gifting strategy over time and demonstrate ROI to leadership.

People also ask about experience gifting

Are experience gifts more expensive than traditional gifts?

Not necessarily. Virgin Experience gifts on Huggg start from £25 and scale based on your budget - the same price range as quality physical gifts or gift cards. The key difference isn't cost - it's impact per pound. Research shows experiences create significantly more lasting satisfaction than material gifts of the same value, making them better ROI for employee recognition and client gifting.

What if someone can't use their experience gift?

Virgin Experience vouchers typically have 12-month validity from the date of issue, giving recipients plenty of time to book their chosen experience around their schedule, commitments, and personal circumstances. Huggg's platform lets you track claim status so you can follow up if needed.

Do experience gifts work for people you don't know well?

Yes. That's the beauty of the curated choice model. You choose the broad category based on what you do know (e.g., "They mentioned enjoying spa days" or "They're adventurous"), and they pick the specific experience that suits them. This removes the pressure of getting it exactly right while still showing thoughtfulness.

How do you gift an experience to remote workers?

Experience gifting actually works brilliantly for remote teams. With Huggg's address-free gifting, you send a link and recipients choose an experience available in their local area - whether that's London, Edinburgh, Manchester, or anywhere else Virgin Experiences operates. No logistics challenges, no office presence needed.

Can you gift experiences to teams, not just individuals?

Absolutely. Virgin Experiences offers group experiences perfect for team building - things like escape rooms, cooking classes, wine tasting, or adventure activities. You can send individual experience vouchers to team members or choose a specific group experience for your entire team.

FAQ: Everything you need to know about experience gifting

What is experience gifting?

Experience gifting means giving someone an activity, event, or memorable moment rather than a physical item - things like spa days, adventure activities, gourmet meals, or weekend getaways. Research published in leading psychology journals consistently shows experiences create more lasting happiness and stronger relationships than material gifts of equivalent value.

Why are experience gifts better than gift cards?

Experience gifts create lasting memories and emotional connections, while gift cards are often perceived as transactional and impersonal. Studies suggest that up to 19% of gift card value goes unredeemed, and recipients rarely remember who gave them a gift card months later. In contrast, experiences become part of someone's identity and life story - something they'll recall and appreciate for years. Research by Chan and Mogilner (2017) found experience gifts strengthen relationships more than material gifts.

Do experience gifts work for remote teams?

Absolutely. Experience gifts work brilliantly for remote teams because they're personal and don't require physical presence at an office. With Huggg's address-free gifting, you send a link and recipients choose an experience in their local area - whether that's London, Edinburgh, Manchester, or anywhere else in the UK. It's one of the most effective ways to show appreciation to distributed teams.

What types of experiences can you gift through Virgin Experiences?

Virgin Experiences on Huggg offers a huge range: spa and wellness experiences, adventure activities (driving experiences, skydiving, indoor skiing), gourmet dining, family days out, theatre and entertainment, weekend breaks, and more. You choose the category and budget; recipients pick the specific experience that suits them, their schedule, and their interests.

Are experience gifts more expensive than traditional gifts?

Not necessarily. Experience gifts start from £50 and scale up depending on what you choose. The key difference isn't cost - it's impact per pound. Research from Van Boven and Gilovich (2003) shows experiences create significantly more lasting satisfaction than material gifts of the same value, making them better ROI for employee recognition and client gifting strategies.

How do you gift an experience without knowing someone's schedule?

That's the beauty of modern experience gifting platforms like Virgin Experiences. You're gifting a voucher the recipient can use to book their chosen experience at a time that suits them. They have flexibility to book weeks or months in advance, around their own schedule, commitments, and availability. Most vouchers are valid for 12 months.

Can experience gifts be used for client gifting, or just employees?

Experience gifts work brilliantly for both employee recognition and client gifting. For employees, they create memorable recognition moments that strengthen culture and retention. For clients, they're a standout way to say thank you that's far more memorable than generic corporate gifts or bottles of wine. Research shows thoughtful experience gifts strengthen business relationships more than traditional corporate gifting approaches.

What happens if someone doesn't use their experience gift?

With Virgin Experience vouchers, recipients typically have 12 months to book and use their experience, giving them plenty of time to find the right moment. Huggg's platform lets you track who's claimed their gift so you can follow up if needed. Experience gifts have much higher redemption rates than traditional gift cards (85-95% vs. 81-90%) - partly because people are genuinely excited to use them rather than letting them sit forgotten in a drawer.

How does experience gifting support employee wellbeing?

Research shows experiences boost multiple dimensions of wellbeing: physical (active experiences like hiking or sports), mental (memory creation, anticipation, and positive recollection), social (shared experiences or stories to tell), and emotional (identity-building moments that reinforce self-worth). Unlike material gifts that depreciate psychologically through hedonic adaptation, experiences actually appreciate over time as we remember them more fondly - what psychologists call "rosy retrospection."

How do you measure ROI on experience gifting?

Track redemption rates (experience gifts see 85-95% redemption vs. 81-90% for gift cards), employee retention (are recognised employees staying longer?), employee engagement scores, client retention and referrals, and qualitative feedback on recognition programs. The key metric is memorability - if people remember and talk about your gift months later, you've created lasting value that traditional gifts can't match. Research shows memorable recognition is one of the strongest predictors of retention and engagement.

Ready to try experience gifting?

The science is clear. The business case is strong. And now, with Virgin Experiences on Huggg, sending thoughtful experience gifts is as simple as sending a link.

Whether you're recognising top performers, thanking loyal clients, or celebrating team wins, experience gifting delivers meaning that lasts long after the moment itself.

Want to explore Virgin Experiences on Huggg? Check out the range here, send a choice of experiences, or talk to us about building an experience-led gifting strategy for your team.