We all know that the sale of gift cards is at an all-time high during the holidays. In fact, gift cards are the most requested holiday present; 73% of consumers said that they will be purchasing a gift card this holiday season. On average most consumers purchase 2 gift cards during the holiday season, followed closely by 3 gift cards.
If you have considered selling gift cards before – but are still on the fence – consider these benefits. Selling gift cards allows you to:
- Generate revenue in advance of providing services. The full “sales value” directly goes to your restaurant as soon as a gift card is purchased whether the gift card is redeemed or not.
- Increase your bottom line due to the high percent of spillage on gift cards (which refers to the dollar amount on gift cards never actually used). This means clear and free profits.
- Increase your sales. Since using a pre-paid card does not feel like we are using our own money, we are more likely to order that bottle of wine or splurge on dessert. Research proves that 72% of customers spend more than the value of their gift card.
- Attract new customers. Think of gift cards as the ultimate referral!
- Increase return business within a pre-determined time frame with the use of incentives for the card purchaser.
If you do decide that gift cards are right for you, below are a few tips to help boost your bottom line:
Offer cards in pre-determined dollar amounts. Take a look at your sales data to determine what an average check total is, then round up slightly. Let’s say an average check runs $20, offer cards in increments of $25, $50, $75, and $100. Doing so will likely lead to the user having money left on the card, which can result in a return visit.
Have your servers offer gift cards to every table. Don’t rely on having gift cards just displayed on the hostess stand. Every waiter should mention to their guests “I just want to make sure know that we have gift cards available for purchase. I can add one to your check if you know someone who might enjoy it.” Many operators run annual contests and reward the employee who sells the most gift cards.
Do not include an expiration date. Gift cards are the equivalent to cash, and cash doesn’t expire. The cards are already paid for by the purchaser, so you are not losing money by honoring the card no matter how long it takes the recipient to make it into your restaurant. Not having an expiration date will also make gift card purchases a year-round offering, which can save you money by ordering cards in bulk.
Offer incentives to the purchaser. Who doesn’t love to free money? Offering incentives such as a free $10 gift card for every $50 gift card purchased is a good enough reason to buy one to for many of your customers. It also guarantees a return visit from the purchaser! Another smart way to get guests in your door during predictably slow post-holiday period is to state that the $10 card is good for certain dates. For example, print on the card bonus card that it is valid from January 1 through March 1 (not including holidays), and your odds of seeing these customers again during a slump is greatly increased.
Consider digital gift cards. If you are not sure if gift cards are going to be a hit at your restaurant, consider selling them online. Offer digital gift cards on your website, promote them on social media, and in create marketing emails to send to your customers and prospects. Be sure to advertise that gift cards can be purchased online in your restaurant as well through posters, table tents, or inexpensive printed flyers tucked inside the menu.