"If you reward people for doing something they are not interested in, you demotivate them in the long run," Wu says. "It's like giving kids a dollar for doing math problems." They will do the math problems because they like the money, but will become conditioned to do it only for the money.
"Gamification is a good short-term tactic, and is good for getting people to do something, but for the long term, it won't work, as the over-justification effect will kick in," Wu explains. "No one knows how long it will be before it kicks in, but we know it won't be forever," he cautions.
But if users can find some intrinsic value in the site, such as participation in a community, then gamification only needs to work until they find that value, Wu adds. After that, gamification becomes a reinforcement rather than a driver, he notes.
Beyond that, "If enough people do gamification the wrong way, there is the danger of consumers being conditioned to resist all gamification, just as they now resist pop-up windows, and that would be a loss for all of us," he warns.
For internal, employee-facing gamification, Wu says the primary danger is that the motivators could become morally offensive. "If someone recycles because they are environmentally conscious, and suddenly you pay them to recycle, they may see the money as cheapening the act, or as being less than their time is worth, feel offended, and stop doing it."
"You have to be careful," Wu adds.
Meanwhile, with both consumer and employee gamification, there are legal issues that an enterprise ought to be aware of, notes attorney Joaquin Gamboa, partner at the Washington, D.C., law firm of Levine, Blaszak, Block & Boothby.
He asks: What kind of data is being collected? Where does it come from? Do users know how it will be used? Who is protecting the data? Who gets access? "These are not reasons you should not do gamification, but are questions that should be approached thoughtfully," he says.
Other legal issues include whether comments from users who get prizes need to be treated as paid endorsements, the value of the virtual currency used for rewards and the intellectual property embodied in the user-generated content, Gamboa says.
Finally, there's a potential pitfall in expecting too much of gamification, as Lyons discovered with the Redding system. After the first three months of gamification, the newspaper held a reception for the 50 or so top commenters, offering drinks and appetizers. Only five showed up.
"I think they prefer the online world to the real world," Lyons says.