Over 64% of Guests Use Gift Cards to Discover New Restaurants [2024 Gift Card Data]

What's small enough to fit in a stocking, but powerful enough to drive restaurant traffic all year round? If you guessed gift cards, you're right on the money. 

Gift cards and loyalty programs are two strong incentives to get new customers into your restaurant and turn them into regular customers. Toast conducted a blind survey of 850 adults on how they prefer to receive and use restaurant gift cards and loyalty points. This article discusses the data points behind what diners are thinking.

Join us as we explore how these insights impact both diners and restaurateurs in 2024. 

Quick insights:

• 54% of respondents prefer physical gift cards over digital ones

• 64% of respondents are discovering new restaurants by receiving a gift card

• 41% of respondents prefer to learn about gift cards on a restaurant’s website

• 48% of respondents use restaurant apps primarily to build loyalty points

• 62% of respondents find that free menu items are the most appealing loyalty reward

Restaurant gift cards and loyalty insights 

100% of our respondents have purchased or received a gift card to a restaurant. Let’s dive into how they’re feeling about restaurant gift cards and loyalty programs. 

Despite digital gift card popularity, 54% of respondents prefer physical gift cards

Despite the convenience of digital options, traditional physical gift cards remain the clear favorite among restaurant guests. Our data reveals that 54% of respondents prefer physical gift cards, while only 11% opt for digital versions, and 35% express no preference.

Age plays a significant role in these preferences. Young professionals aged 25-34 show the strongest interest in digital gift cards at 28%, contrasting sharply with older demographics as just 6% of those 55 and older and 9% of those aged 45-54 prefer digital options. Conversely, physical gift cards are particularly popular among older guests, with a 62% preference for them.

When it comes to the redemption of these gift cards, the dining room trumps takeout. Nearly two-thirds (64%) of respondents use their gift cards for dine-in experiences rather than takeout (36%). This preference is most pronounced among guests ages 18-24, with an overwhelming 83% choosing to use their gift cards for in-restaurant dining.

This finding is particularly interesting given that younger guests (ages 25-34)—the highest users of food delivery apps with 20% ordering 6-10 times monthly—still prefer the in-person experience. The dine-in preference remains strong among older guests as well, with 74% of those 55 and older choosing to use their gift cards for restaurant visits.

Gifting dining recommendations: 64% of respondents are discovering new restaurants by receiving a gift card

Gift cards are proving to be more than just a convenient payment method. Today, they're becoming an effective gateway for restaurant discovery. Our data shows that 64% of respondents have discovered new restaurants through receiving a gift card, highlighting their potential as a marketing tool for restaurant operators.

Men are particularly receptive to this, with 68% reporting they've found new restaurants through gift cards. The impact is also popular among younger demographics: 78% of diners aged 25-34 have discovered new restaurants through gift cards, closely followed by 75% of diners aged 18-24 and 74% aged 35-44.

While the discovery rate is significant across all age groups, there's a slight decline from older demographics. About 67% of guests ages 45-54 have found new restaurants through gift cards, dropping to 55% for those 55+. These findings suggest that gift cards could be particularly effective for restaurants looking to attract younger clientele and expand their customer base.

Marketing your gift cards: 41% of respondents prefer to learn about gift cards on a restaurant’s website

To maximize gift card sales, restaurant operators should carefully consider their marketing channels and promotional strategies. Our data provides clear insights into where and how to effectively promote gift card programs.

Your restaurant's website should be the cornerstone of gift card promotion, with 41% of customers preferring to learn about gift card offers online. But don't neglect traditional marketing, as 32% of guests actively prefer gift card promotion to take place on-site, at the bottom of the menu, or on a sign by the entrance. While social media captures 17% of customer attention, only 10% prefer server-initiated discussions about gift cards. 

The data strongly supports bonus-type promotions as a sales driver. When offered deals like "buy a $50 gift card, get a $10 bonus card," the response is positive. About 87% of customers express a likelihood to purchase, with 48% being "very likely" and 39% "somewhat likely." With such a strong response rate and minimal resistance (less than 2% unlikely to purchase), bonus promotions should be a key component of any gift card strategy.

The upcoming holiday season presents an opportunity for gift card sales. With 86% of respondents planning to purchase restaurant gift cards in the next three months (45% "very likely" and 41% "somewhat likely"), restaurants should prepare for increased gift card activity. This high intent to purchase suggests that well-timed holiday promotions could significantly boost gift card sales..

Restaurant loyalty programs are growing, as 48% of respondents use restaurant apps primarily to build loyalty points

Another effective way to get customers into your restaurant is through loyalty programs. Have you ever found yourself choosing where to get your coffee based on where you’re closest to earning a free drink? If so, you’ve been subjected to a loyalty rewards program — and it worked.

Loyalty programs continue to play a significant role in the restaurant industry, with nearly half (49%) of surveyed diners actively participating in at least one restaurant loyalty program. Their influence on dining decisions is also notable with 66% of respondents considering loyalty programs when choosing where to eat, with 49% rating them as "somewhat important" and 17% as "very important" in their decision-making process.

Guests ages 25-35 show the strongest engagement with loyalty initiatives, with 26% considering these programs "very important" to their dining choices. This stands in sharp contrast to older demographics, where approximately 42% view loyalty programs as unimportant to their restaurant selection process.

When it comes to technology integration, restaurant apps serve primarily as loyalty-building tools. Nearly half (48%) of respondents specifically use restaurant apps to accumulate loyalty points, while 32% don't engage with apps for this purpose. Interestingly, 20% of customers indicate they would use restaurant apps regardless of loyalty features, suggesting that digital engagement extends beyond point collection for a significant portion of diners.

Cater loyalty programs to younger guests as they’re more likely to use their points 

Loyalty programs are proving their worth in the restaurant industry, as 68% of guests surveyed have redeemed rewards such as discounts or complimentary items. This high redemption rate suggests that well-structured loyalty programs are successfully engaging customers and driving repeat visits.

The appeal of loyalty programs is particularly strong among younger diners, with Gen Z leading the charge. About 71% of guests aged 18-24 actively engage with and redeem their loyalty points. 

When it comes to reward preferences, it’s clear that free menu items are the fan favorite. A substantial 62% of respondents identified complimentary dishes as their most desired reward type, outranking other incentives like discounts or special offers. Consider this strong preference for menu item rewards when crafting your loyalty rewards program. 

The gift that keeps on giving 

Restaurant gift cards have the power to drive new guest discovery, creating compelling reasons for diners to explore new options. Restaurants that align their gift card strategies with guest preferences will be best positioned to capture their share of the 86% of guests planning to purchase this holiday season. After all, the best gift isn't just the card itself, it's the memorable dining experience it promises.

Confused about restaurant gift card accounting practices? Check out this article, How to Optimize Your Restaurant Gift Card Accounting and Bookkeeping. 

Methodology

Toast conducted a blind survey of 850 U.S. adults ages 18 and older on this topic on October 21, 2024. Respondents were not made aware that Toast was fielding the study. Using a standard margin of error calculation, at a confidence interval of 95%, the margin of error on average is +/- 3-5%.