How Gift Cards Can Help Your Restaurant During COVID-19

By: Chelsea Verstegen

6 Minute Read

Mar 17, 2020

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In light of the current health crisis, restaurants are having to make tough choices about keeping their doors open, and many states have mandated that restaurants can’t offer on-premise dining. As restaurants decide on their next steps, gift cards should be part of the conversation.

While it’s always good practice to offer gift cards — given 80% of customers spend more than the value of their gift card when using one — now is a particularly important time to chase diversified streams of revenue. 

The restaurant community is facing a dramatic decline in sales and could quickly run out of cash to support day-to-day operations and staff wages. In many cities, restaurant sales are down as much as 50% across the board as a result of COVID-19. It has put hard-working owners, operators, staff, delivery drivers, farmers, and just about everyone in the food industry at risk.

Restaurants already operate on thin margins, and with social distancing and governments enforcing capacity restrictions or off-premise only at local restaurants, this industry needs our support now more than ever. 

That’s why, on behalf of restaurants across the country, we’re asking people all over the U.S. to pay it forward through gift card purchases.  

Today, Toast launched the Rally for Restaurants campaign, where guests can purchase gift cards to their favorite restaurants to help them stay afloat during this time of extreme uncertainty. By purchasing as many gift cards as they can, guests will have future meals to look forward to, and their purchases will support restaurants in managing their businesses and keeping their staff and customers safe through the health crisis.

In this article, we’ll show you why a gift card program is important to your business right now, and how and what to track using your POS system.

Why Offer Gift Cards?

In your normal day-to-day operations, customer loyalty is extremely important. During a health crisis, customer loyalty can save your restaurant. 

Gift cards are the ultimate driver of customer loyalty. When someone purchases a gift card, they are either guaranteeing they’ll be back in your restaurant, or they care enough about your brand to share that passion with their friends or family. That’s huge. 

When a guest purchases a gift card, they are essentially giving your restaurant the promise of future business, and when you’re struggling to make ends meet and aren’t sure if you can afford to pay your staff, this is the exact promise you need. 

Customers spend an average of $59 over the value of their gift card, which adds to the appeal of offering and advertising gift cards. Toast customers have reported an average additional spend of $25.34 for checks paid with gift cards. The average check size for restaurants that sell gift cards is $28.11, compared to $25.50 for restaurants that do not offer gift cards.

The ease of use is also an added bonus, as guests can now receive gift cards either through email or text message. There’s no need to keep track of physical gift cards, because they’re easily accessible through your customer’s phone. 

Contactless payment is highly encouraged during a health crisis, so make sure you let your guests know they’ll be able to pay virtually when advertising your gift cards. It’s often not considered a perk, but reducing human interaction as much as possible is so important right now.

If you don't yet offer gift cards at your restaurant, you can set up digital channels, like online ordering, a mobile ordering app, contactless delivery, and e-gift cards with Toast Now™. Start today with three months free. No hardware or POS purchase required.


How to Incentivize Gift Card Sales

Your restaurant’s own website and social media channels can be used to advertise your gift cards and incentivize purchases. Your website should be optimized for search engines, so if someone is looking for “Italian food in San Francisco”, and you serve the best bolognese in town, your website should be at the top of the google search. To learn more about how to optimize your website for search engines, read this article.

Social media is a great way to advertise any and all promos, so if you’ve just launched a buy-one-get-one gift card promotion, post it on your social media channels. Social media is also a place where you can be transparent with your customer base. Especially during the current health crisis, people are searching for ways to help support the industry. If you can use your social channels to convey how important every last gift card and dollar spent at your restaurant is, your customers will hear you, appreciate you, and hopefully, help you.

Toast has launched Rally for Restaurants, a campaign devoted to keeping restaurant doors open through the purchase of gift cards. Regardless of which POS system you have, Toast will display your gift card page on RallyforRestaurants.com to attract locals in your area to purchase gift cards for your restaurant. Toast is also committing up to $250,000 in matching contributions to relief organizations through Toast.org.

What Metrics to Track and How Your POS Can Help

Gift card sales are an important metric to keep an eye on. Being aware of how much you’re making from certain marketing initiatives or campaigns is really important, because you can evaluate what you’re doing right and where you may need to beef up your efforts. 

It’s great to track whether your guests prefer text versus email gift cards, because you’ll be able to see which is the most popular form of gift card in order to pivot your marketing strategy to that particular method. 

When customers do come in to use their gift cards, it’s good to keep track of how much more than the gift card value they’re spending so you can better determine your target customers, as well as how much you should devote to marketing gift cards.

Lastly, look at the average gift card amount that customers buy. Is it $25? $100? This will give you great insight into the spending habits of your customer base, including how much they are expecting to spend on a meal. 

Your POS system can track all of these gift card metrics, so you don’t have to worry about manually keeping track of these numbers and averages, regardless of which type of gift card your customers want. Guests also have the ability to check their gift card balances online, which makes using their gift card even easier. 

There’s a lot that your restaurant can benefit from by offering gift cards and managing your gift card program correctly. Aside from the loyalty, additional customer spend, and customer convenience, gift cards can be part of what gets you through this crisis.

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