Are you making the most of your gift card program? If your restaurant only sells gift cards in December, sees low redemption values, and doesn’t promote gift cards, your response should be “no.”
Recently released in the Toast Restaurant Management Blog, The 2016 Restaurant Gift Card Study compiles gift card data from over 500 restaurants and sheds light on the truth about restaurant gift cards - when they’re purchased, how much is spent per card, and what types of restaurants sell the most gift cards.
Here are the highlights of the report - and the results may surprise you.
Gift Card Holders Spend More Than Others
If you operate a full service restaurant (FSR), this might be the best news you hear all day. Guests with gift cards tend to spend much more on the check, especially at full service restaurants. At FSRs, guests spend 72 percent more with gift cards. Diners, bakeries, and cafe/delis see a slight dip in purchase amounts when paying with gift cards, but this isn’t necessarily a bad thing - there’s more left on the card for when customers come next time.
With a gift card program integrated in your point of sale system, servers can sell and swipe digital and print gift cards with the tap of a button. Allowing guests to personalize their gift card options, select the amount, include a personalized message, and choose whether they want the gift card emailed or texted to the recipient immediately or later are ways to make the process of selling gift cards easier and more interactive for guests. Gift Cards Are Not Just Christmas Presents
When you run a restaurant, it’s easy to conclude that December is the best (or only) month to promote gift card sales to coincide with the holiday season. While this is a smart holiday restaurant marketing strategy, the data shows that restaurants shouldn’t put all their eggs in the December basket.
In fact, 48 percent of gift card sales for full-service restaurants (FSR) and 58 percent for quick-service restaurants (QSR) occur outside the month of December. That means about half of your gift cards are being sold outside of the holiday season. Mother’s Day, Father’s Day, and graduations are perfect occasions to promote gift cards, and don’t forget - every day is someone’s birthday!This information should drastically change the way you promote gift cards in your restaurant. Assuming the sales in December stay constant, utilize those remaining 11 months of the year to promote and sell gift cards and increase overall revenue.
Nearly a Third of Gift Cards Go Unused
This may sound great - free money, right? Well, while there are immediate financial benefits to unused gift card funds, this is a double-edged sword. If that unused gift card is received by someone who has never been to your establishment, you lose out on a new customer who could become a regular. The $25 used to buy the gift card stays with you, but the hundreds of dollars they may go on to spend if they had become a repeat customer vanishes. With digital gift cards purchased through POS software, guests are required to provide their email or phone number (which is automatically stored in the restaurant CRM) and select the amount they want to purchase. The digital gift card will then be emailed or texted to the intended recipient. Using this information, you can send reminders to recipients of cards that go unused for 3, 6, or even 12 months. This is an easy way to bring that customer in to use the gift card - and hopefully for a few visits after that.
Gift Cards in 2016
There are clearly many benefits to offering a gift card program in your restaurant, but becoming a master of gift card management can only be achieved by looking at all the numbers. Check out Toast’s official 2016 Restaurant Gift Card Study for the complete rundown on how to improve your restaurant’s gift card program.