Due to the supply chain disruption and pursuing inventory shortages, some experts in the commerce section are anticipating this holiday season to be the year of the gift card. In an interview with PYMNTS, Brett Narlinger, head of global commerce at Blackhawk Network, reported seeing a dramatic increase in gift card purchases.
One of their recent surveys revealed that the average consumer will purchase 15 prepaid cards this year—a 200% increase over 2019 before the digital shopping wave descended due to the pandemic.
Many holiday shoppers are also looking to give their friends and family meaningful gifts which often translates to experiences rather than physical objects. Additionally, research conducted by PYMNTS found that almost 90% of U.S. consumers plan to do some of their shopping online.
Let’s look at how this online trend may impact restaurants this season and tips to entice customers to share your fine food with friends.
Shoppers Turning to Restaurant Gift Cards This Season
A survey conducted by the National Restaurant Association found that over 60% of those surveyed hoped to receive a restaurant gift card this holiday season. Of these people, 62% prefer receiving one for their favorite restaurant, 20% would like to try something new, and 18% want to live on the edge and try a spot they would never pick on their own.
According to Hudson Riehle, Senior Vice President of Research for the National Restaurant Association, “People may be reluctant to give a gift card because they feel they’re too impersonal, but what you’re giving is the flexibility and opportunity for them to choose what they want. Plus, they’re a great option if you’re looking to give an experience rather than a material item.”
In addition to giving their friends the gift of great food, these people are also supporting the local economy. More than 70% of restaurants are classified as small businesses, bringing jobs to the area and providing a gathering spot for community members.
The Fate of Misplaced Gift Cards
Do you remember the holidays when you received a gift card only to have it lost amidst wrapping paper and other packages? Fortunately, our digital age has made that scenario far less likely to occur. Simply use your smartphone to take a picture of any gift cards you give or receive. That way it will be easy to access the number in case it’s misplaced.
For tech-savvy individuals, using a virtual wallet ensures safekeeping. Simply download the app, such as Google Wallet, to your smartphone. Then take a picture of the card and enter the number and balance. The cashier or server can scan the barcode upon checkout.
Restaurant Gift Cards Making Come Back
The Mid-Year Restaurant Gift Card Report 2021 by Paytronix found May and June’s sales rebounding to 91% of 2019 sales. This represents a strong recovery from 2020 when the pandemic caused restaurant gift card sales to fall by almost 32% compared to 2019.
So, how can restaurants get on the gift card wagon train? Some of the bigger chains are promoting special offers to entice customers to purchase a gift card. For example, Red Lobster is offering a “Give a Gift, Get a Gift” holiday gift card promotion. Purchasers earn a $10 bonus coupon for themselves for every $50 spent on gift cards.
Keep in mind that restaurants usually gain more than the amount of the gift card. According to Fiserv, 80% of customers paying with a gift card at a fine dining or fast-casual restaurant end up spending more than the value of their card.
Now, let’s take a look at a few ways restaurant operators can increase those gift card sales.
- Market Gift Cards Online: Do you know who your VIP customer is? How about where they live online and what social channels they adhere to? A targeted marketing campaign is much more successful than a general approach.
Of course, if you’re active on most social media channels, that’s a great place to start. Also, consider sending an email out. Make sure your gift cards stand out on your website, as well.
- Market Gift Cards In-House: Guests that already know about your great food and ambiance are the best place to turn to for gift card purchases. After all, they know they’re giving their friends and family an experience worth remembering.
Place card displays and posters throughout the restaurant and add menu call-outs or inserts. Depending on your brand’s image, you may also want to consider table tents or storefront signs.
- Set Up Special Holiday Promotions: It’s human nature to rush to purchase something before the sale ends or the promotion expires. It’s one of the reasons restaurant “specials” can boost sales. A few examples from other brands include Subway’s free six-inch sub for those that purchase a $25 gift card, and WOWorks restaurants’ $5 gift card for each $25 gift card purchase.
The holidays are upon us. Now’s the time to let your customers know about your great offer. Not only will you increase your revenue, but each gift card is also like a free advertisement, placing your brand front and center.