It’s January and that means one thing is probably occurring at your restaurant: People are redeeming the gift cards they got as holiday gifts. If you aren’t selling restaurant gift cards, you are missing out on a great opportunity to increase revenues. According to the National Retail Federation (NRF) Annual Holiday Spending Survey, 61% of consumers said gift cards were the top items on their wish lists, making them the most requested item for 11 years in a row. And the most popular gift cards by category? Restaurants, at more than 40% of cards purchased.
Beating the Winter Blues
If January is a slow time for your business due to weather or a post-holiday slump, selling restaurant gift cards during the holidays may create just the incentive to get customers out of the house to enjoy an evening at your restaurant. Restaurants that offered a “bonus” card with a gift card purchase may have ensured two customers return in January. This can increase revenue as well as foot traffic, since most customers spend beyond the face value of a gift card when they redeem it.
Not Just for the Holidays
All these benefits suggest that like selling restaurant gift cards should be a given at the holidays (and it’s smart to put plans in place now for the 2018 holiday shopping season), but also remember that selling gift cards is a smart strategy, in general.
Here are four reasons selling restaurant gift cards should be a mainstay of your business:
- Gift-giving occurs all year, and gift cards are a go-to gift. For example the 2017 Father’s Day survey put gift card spending for this holiday at $2.2 billion and the Mother’s Day Survey in 2017 estimated $2.5 billion spent on gift cards.
- Gift cards aren’t redeemed immediately. This means you collect revenues upfront, kind of an interest-free loan, which can be used to stock up on inventory or invest in other areas of your business. Some gift cards are never redeemed, which can increase your margin.
- Easy tie-in with loyalty. When a gift card doubles as loyalty card, the customer may be more likely to refill the card and return to your restaurant to collect rewards. You can sweeten the deal with loyalty reward points for purchasing gift cards.
- Gift cards can be a preferred method of payment. Gift cards can be some consumers’ preferred method of payment. If they don’t have credit cards and don’t want to carry cash, a gift card is the perfect answer. It’s also a convenient way for parents to fund restaurant visits for a student or for a traveler to manage expenses.
Selling restaurant gift cards is a relatively simple way to increase traffic, revenue and profits — any time of year — and the popularity of gift cards is a trend that doesn’t show any signs of slowing down. Evaluate how well your business is meeting your customers’ demand for gift cards and how you can leverage this trend to benefit your business.
