The value restaurant gift cards bring to your brand
The restaurant industry has gone through the wringer the past few years, facing a pandemic, supply chain shortages, labor shortages, and a 40-year-high inflation rate. With the uncertainty of dining in, it was challenging to figure out alternative channels for profit and revenue. Luckily, technology proved efficient and crucial to restaurant brands’ success. From small to mid-sized businesses, restaurants were able to adopt online ordering, branded mobile apps, delivery, loyalty, gift cards, and much more to enhance their guests’ experience and match industry brand leaders.
Now, many restaurant brands are thriving in the digital space of mobile apps, online ordering, curbside pickup, and delivery. Brands continue to find channels that bring guests to their restaurants without having to step into a brick-and-mortar location while still enjoying the dining experience. One of the most reliable channels to attract guests in the digital space, that hasn't been affected by current economic obstacles, is gift cards!
Why Offer Restaurant Gift Cards?
Gift cards are the top factor to drive guest loyalty. When a gift card is purchased, either for solo use or a friend/family member, they enjoy your restaurant to spend money on building their loyalty and coming back or care to share your brand with other people. Both reasons are great for your brand!
According to Fiserv’s Q1 2022 Gift Card Gauge, 58% of consumers plan to purchase more gift cards as an alternative to tangible products due to inventory shortages, and 80% say they plan on making gift card purchases in 2022. To top it off, guests are leaning more toward digital gift cards as mobile devices allow for purchasing, receiving, and storing them in the mobile app or digital wallet. Fiserv’s 19th Annual Prepaid Consumer Insights Survey showed that 77% of guests prefer digital gift cards because of the immediate delivery via email, 62% said it’s easier to send as a gift, and 50% said digital gift cards are easier to purchase and use as a payment method.
5 Ways Restaurant Gift Cards are Beneficial for Your Restaurant
Aside from making a profit on menu items, original sauces or ingredients, and branded merchandised items like shirts or mugs, gift cards can be used to incentivize guests for repeat visits and spend more on each purchase and earn loyalty points. Here’s why any size restaurant brand should invest in gift cards.
1) Boost Brand Awareness. Almost 70% of consumers primarily buy gift cards for other people. Gift cards can function as a form of complimentary advertising that brings in new customers and repeat visits if they enjoy your brand! 18% of consumers say they enjoy treating themselves to a gift card as well. Guests like the rewards and benefits that come with gift cards such as receiving a discount (buy a $50 card and get a $10 card for free), participating in loyalty programs (purchasing cards during double or triple point events), and building a digital wallet to pay with the gift card balance rather than a personal card. By incentivizing your gift cards via your website, email marketing, and social media, you can promote your brand easily across channels.
2) Increase the use of Mobile Pay and Digital Wallets. Consumer demand shows a popular and increasing trend for mobile payments and digital wallets. A modern gift card program can offer digital options in addition to traditional cards that help your mobile success! A fully integrated gift card feature that provides an all-in-one digital wallet experience allows you to meet guests online and in-store, making it easier and more convenient.
3) Collect Guest Data to Build the Guest Relationship. When restaurant gift cards are purchased and used, you can collect important guest data that provides insight into the current market/audience. If guests link their gift card to an account on the mobile app or online ordering, you can generate more information to send targeted marketing offers and campaigns to better serve guests!
4) A Form of Immediate Revenue. One of the biggest advantages of restaurant gift cards is that you generate revenue immediately. Whenever a guest buys your gift card they are paying upfront/in advance of providing your products. If a card is lost or never used, you already have $25, $50, or $100 in profit. Take a look at Starbucks which has more money on gift cards than banks have in deposits.
5) More Secure form of Payment. Gift cards do not require a name or account information tied to the card. Once purchased the funds are loaded onto the card to be used at any time, conveniently, either in-store or online. They also can not be duplicated for fraudulent use. This makes mobile payment easier and more efficient as guests now have the option to pay via a mobile app or in-store without personal information being used.
Types of Restaurant Gift Cards
There are two primary gift cards available for restaurant(s) to offer: Digital and Physical. Digital gift cards are the easiest way to sell gift cards to guests. They can easily purchase the gift card within the branded mobile app or online and have it linked to their account automatically. With a fully integrated digital gift card, guests can also add it to their digital wallets and continuously add funds when needed. For in-store purchases with digital gift cards, guests can pull up the barcode associated with the card to scan and redeem their funds.
Physical gift cards are still in use across all industries. Many guests like the feel and look of physical gift cards with 69% saying they like them as a tangible gift item. There are also two types of physical gift cards: barcode-based and magnetic stripe. Most of the time you’ll see the magnetic stripe gift card where they are redeemed by swiping through a credit card reader. Barcode-based gift cards come with a unique barcode/QR code and require a barcode scanner to scan for redemption.
Choosing either a digital or physical gift card is based on preference and the type of guests that come to your restaurant. Depending on your POS or gift card provider you can also choose both options to meet guests’ needs.
How to Implement Restaurant Gift Cards
Offer gift cards through your POS: Depending on the POS system you have, you can conveniently and efficiently implement gift cards that allow you to easily create, promote, and send or track sales, redemptions, and overall performance of gift cards.
Third-Party Integration with your POS: If your POS doesn’t have a gift card functionality, you can check out third-party solutions that offer the integration so you can seamlessly transfer information from your gift card program to your POS.
Third-Party Gift Card Company: If you don't have a gift card feature with your POS and you can’t integrate with a third-party service, another option is to use a standalone gift card provider. Keep in mind this will be a manual process as you will need to process gift card transactions separately from regular transactions.
4 Ways to Market Your Restaurant Gift Cards
After you’ve chosen to invest in gift cards and selected a type, you should be marketing your new investment to guests! Here are some tips to help market and make use of this valuable revenue channel!
- In-Store Visibility. Make eye-catching window clings, table tents, and other signage to promote your gift card at your brick-and-mortar locations so guests can be aware of your new offering.
- Promote on Social Media. Social media is a great way to reach guests at any time. Take advantage of this platform and boost awareness of your gift cards by sharing posts and stories, and promoting a bonus/discount when guests reshare the news!
- Email marketing. With a full, data-driven marketing suite, you can design and send personalized email promotions and create specific campaigns promoting your physical or digital gift cards.
- Word of mouth goes a long way. Train your staff about the new gift card so they can upsell them to guests in-store. This is free marketing and can increase your sales when guests purchase products as well as a gift card.
Restaurant gift cards are a great way to attract guests to your restaurant and build a loyal customer base! With all of the benefits to reap, you should consider investing in gift cards to boost your brand’s revenue and guest engagement!