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How to Sell More Gift Cards in Your Restaurant This Year

Posted by Rod Brant on 10/6/17 8:00 PM in Restaurant Marketing

It’s coming up to that time of year when you drive down the street and see dozens of banners and signs hocking gift cards for sale.

And it’s easy to simply put a sign up in your restaurant saying "Gift Cards Available."

Just do that, and you will have a share of the $150+ billion worth of gift card sales this year. 

But what if we told you there are proven ways to get an even bigger piece of the pie?

Restaurant Gift Cards

Restaurants are the most popular places for consumers to purchase gift cards, with 41% of total gift card spend going to restaurants, according to Blackhawk Network.  With sales of gift cards north of $150B, customers will purchase over $40B (that’s billions!) in restaurant gift cards this year, and even more next year.

gift card sales

© WalletHub.com 2017

Breaking it down even further, Blackhawk says the average American consumer will purchase almost $150 in gift cards in the coming year. There is no reason you shouldn’t get a significant portion of those purchases with your own gift card program.

Why Should Restaurants Sell Gift Cards?

Far too many restaurant owner/operators dismiss the power of gift cards, but they're proven to attract new customer visits long after the holidays have passed.

Encouraging a flood of new customer visits is reason enough to put an emphasis on gift card sales during the coming holiday season.  But if you are skeptical (like many restaurant owners I know), then imagine taking advantage of the following benefits from gift cards:

Cash Flow

Cash in hand today is worth more than it will be tomorrow. Gift cards are the perfect way to improve your cash flow. There is virtually no costs of good sold, and you’ll get to use the cash generated for weeks, months, or even years before the card is redeemed.

Spillage

Spillage refers to the dollar amount on gift cards never actually used. A few years ago, it wasn’t all that unusual to hear of spillage rates in excess of 30% in all restaurant types.

While the number is not nearly as high these days due to consumer protection laws, think of all the gift cards you have in your own living room drawer or in your wallet somewhere. The fact is, not all gift cards are used. This means money for your business.

Overspend

Customers tend to look at gift cards as “free money” and will likely spend much more than the value of the card when they visit.  Guests at full service restaurants spend an average of 72% over the actual value of the card. So, a customer who comes in with a card worth $50 will spend $86 or more. 

Future Visit Frequency

Done right, selling gift cards can dramatically increase the visit frequency of the gift card purchaser. If the card is gifted to a new customer, this is your chance to show them what makes your restaurant so special and - hopefully - get them excited to come back again soon. 

Are Gift Cards Just for Christmas? 

If you are like most restaurant owners, you only think about gift cards during the Christmas gift-giving season. And rightly so, as only about half of all sales are conducted in December every year.

But that also means ~$50 billion worth of gift cards are purchased in the other 11 months of the year, so don’t forget to promote gift card sales during the entire year, not just during the Christmas season. 

How to Sell More Restaurant Gift Cards 

Here’s the one tactic we’ve found most effective in increasing sales by up to 187% in just one year. 

I’m sure you are very familiar with the offer many restaurants use:

“Buy a $50 Gift Card and get another $10 free!”  

You see it at places like Outback, Olive Garden, and just about every other restaurant you can name.  

restaurant gift card ideas

And that is really the point: everybody is making the same offer, and if everybody is doing it, then it’s not so special anymore.

Here’s what we recommend doing instead.

There's a system to overcome the same 'ol, same 'ol of a restaurant gift card program. To get the attention of your customers and make incredible profits for your restaurant, try out the Motherlode Bonus System.

Here's how it works.

When a gift card of sufficient value is purchased in your restaurant, the purchaser is also given a "Motherlode Bonus." This bonus is not simply an additional $10-$15 gift card. Instead it is 1-3 offers that come with every gift card purchase.

For example: if the gift card purchase amount is $50, then the purchaser receives an additional bonus of a small appetizer and a dessert that must be used on separate visits.

It’s an offer guaranteed to break through the overwhelming glut of restaurants offering gift cards. The purchaser is getting something of greater dollar value for themselves than the typical $5 or $10 offered by most restaurants.

There is also a greater perceived value because the purchaser is getting three gifts, not just one. On your end, you get an extra visit than if you had offered a one-time redeemable gift card for the purchaser.

The Great Debate: Digital vs. Physical Cards

It’s true - electronic gift card sales are increasing rapidly, especially with younger customers.  But, even in this digital age, over 85% of gift card sales are physical cards.

While you shouldn't ignore physical gift cards, digital cards offer a ream of benefits physical ones cannot. Digital gift cards are personalized, can be delivered in a more cost-effective manor, and can be replaced easier.

gift cards

Where to Promote Gift Cards

You can have the greatest food, the best offer, and the most important bonus, but if you don’t let anybody know about your gift card program, it's doomed to fail. If Starbucks had all those beautiful holiday gift cards to sell, but kept them in a box under the counter, how many do you think they would sell?

The point is, you need to let customers know about your gift card program, or it’s just like putting them all in a box in the freezer.

The following media can be effective ways to tell of your gift card availability.

  • In-Store Card Display (at hostess stand, in waiting area, at cash register, etc.)
  • In-House Signage, Posters, and Displays
  • Menu Call-outs
  • In-House Email List 
  • All Social Media Channels
  • Server Suggestion/Upselling
  • Table Tents
  • Direct Mail
  • Storefront Signs
  • In-Store Video Screens
  • Local Sports and Event Programs
  • Menu Inserts
  • Your Website
  • Your Restaurant App

As you can see, there is no excuse to not promote your restaurant gift card program. 

Not Offering Gift Cards in Your Restaurant?

If the idea of gift cards is new to your restaurant, check out a gift card program built specifically for restaurants that you can track right from your restaurant management system. 

Here’s to a successful restaurant gift card selling season in 2017!

social media for restaurants

toast restaurant management blog

Written by: Rod Brant

Rod Brant is the President of Marketing for Independents, a membership website dedicated solely to helping Independent Restaurant Operators with their marketing.


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