Should Your Restaurant Have a Gift Card Program? How to Get Started
November 21st, 2023
Are you looking for a new way to boost sales and build your restaurant’s brand? The answer may be as simple as a rectangular piece of plastic with your logo on it. That’s right; we’re talking about a gift card program.
In 2022, the gift card market in the US generated $499.4 million in revenue — growing by 8.2% each year. Gift cards aren’t just for the biggest national brands, and they don’t need to be sold in grocery store checkout lines. You can sell gift cards in your own restaurant — or on your own website — and start reaping the rewards.
Are you ready to start selling gift cards for your restaurant? Let’s look at how gift cards work, how they can benefit your business, and the steps it takes to start your own gift card program.
What is a Gift Card Program?
A gift card program allows customers to buy cards with a balance that can be redeemed at your business. Generally, customers can make gift card purchases both in-store and online. The customer selects an amount to add to the card, and the merchant collects payment upfront. Their receipt will include the gift card's activation information and the balance.
When it comes time for the customer to redeem their gift card, the process is quick and easy. In an in-store setting, the card is swiped similar to a credit card. For eGift cards, the card number can be manually entered or a QR code can be used.
When a gift card is used, the transaction amount is deducted from the card’s balance. If there is a remaining balance on the card, the customer will be notified. If the balance doesn't cover the entire transaction, they will need to provide another payment method. Once a gift card is used up, it can be discarded or reloaded for future use.
Why Should You Implement a Gift Card Program?
New shoes, laptops, air fryers, video games — out of all the major holiday gifts, gift cards reign supreme as the most popular. According to Givex, 44% of surveyed Americans who want gift cards for the holidays prefer restaurant gift cards.
However, gift cards aren’t just a boon for your holiday sales — they’re money-makers all year round. Let’s dive into the tangible benefits your restaurant can expect when starting a gift card program.
Improve Your Cash Flow
Gift cards are instant revenue. Even if they're never redeemed, you’ve secured a profit. Whether they’re gifts for friends and family or impulse purchases by returning diners, gift cards are a great way to increase sales. If you’re a seasonal business, you can promote gift cards to get an influx of cash until customers start coming back in.
Plus, once a gift card recipient’s foot is in the door, you have the chance to upsell. CapitalOne Shopping found that 61% of customers spend more than the card’s value — amounting to $31.75 on average. If they don’t use the entire gift card on the same visit, don’t worry; now they have another excuse to come back!
Attract New Customers
Gift cards are a great way to bring new customers into your restaurant. According to FSR, gift cards encourage 44% of customers to try new restaurants. When family or friends gift their loved ones an experience at your restaurant, that’s a vote of confidence in your business. With the power of word-of-mouth marketing, you have a unique opportunity to turn them into loyal customers.
Promote your gift card program on your usual channels, including on social media and in your restaurant. You could also offer a limited-time promotion to encourage more gift card sales.
Turn Existing Customers into Repeat Business
While gift cards are a great way to bring in new customers, they’re also powerful tools for increasing brand loyalty.
FSR found that 56% of customers want a gift card from their favorite restaurant. That means there’s likely already a desire for gift cards among your existing customer base — so why not fill that gap?
Gift cards make it easy to upsell to your customers, encouraging them to come back and spend even more on their next visit. Plus, if you encourage returning customers to reload their gift cards, you can reduce new card costs.
Gift cards can also make it easier to turn unhappy customers into loyal ones. If a customer has a poor experience at your restaurant, a gift card can help make it right. By turning that bad experience into a better one, customers are more likely to try your restaurant again. Then, you have an opportunity to show them your best.
How to Start Selling Gift Cards for Your Restaurant
Would your restaurant benefit from a gift card program? If so, then let’s dive into the steps you need to take to sell gift cards successfully for your restaurant.
1. Choose a Gift Card Provider
Before you can start selling gift cards, you need a gift card provider. Your restaurant POS system may already have a built-in gift card program. Otherwise, you can use third-party gift card programs for restaurants that integrate with your POS system.
Whichever direction you choose, ensure that your gift card provider charges a flat monthly fee. Otherwise, you could be hit with transaction fees for selling, redemption, and balance inquiries.
Gift card providers typically offer a starter kit with gift cards and marketing materials to help you promote the program. For example, SkyTab’s gift card program starter kit comes with 50 free gift cards, envelopes, one window sticker, an acrylic stand with an insert, and two register decals.
Your gift card program should include necessary features like:
- The flexibility to sell gift cards in any desired amount
- Rechargeable cards for multiple uses, enhancing customer convenience
- Online visibility of gift card balances, allowing customers to check their card's value easily
- Customizable gift card design to align with your brand identity
- Smooth conversion of existing cards to the platform, ensuring a seamless transition
- Powerful reporting capabilities to gain valuable insights into gift card sales and usage
You can start selling digital gift cards for your restaurant as well. eGift cards are only rising in popularity — Cyber Monday in 2021 saw a 31% increase in eGift card sales. Your gift card provider should support eGift cards and provide you with a customized eCommerce site to sell them on.
2. Customize Your Gift Cards
Gift cards are another valuable opportunity to advertise your restaurant and increase brand awareness. However, if your gift cards are plain and generic, you won’t be getting your restaurant’s name out there. Customers may even lose track of which restaurant the gift card is for.
Your provider should allow you to customize gift cards to match your restaurant’s branding. SkyTab’s gift card program allows you to upload an image file, choose a template, or get a custom-designed card.
3. Decide How You Want to Use Gift Cards
Now that you have branded gift cards at your disposal, it’s time to determine how you want to use them. How will you sell them? Where will you display them?
Use the advertising materials provided to you by your gift card provider to let diners know about your program. Ensure that you have gift cards ready to purchase at the register or host stand so that customers can easily buy one on their way out. Offer set amounts for customers to choose from and a custom amount option.
You can use gift cards for more than their traditional purpose, though. Gift cards can be great for:
- Incentives: Use gift cards as rewards or incentives for employee recognition programs.
- Promotions: Employ gift cards in promotions or special offers to attract more customers.
- Fundraising: Partner with local organizations or charities and donate a portion of gift card sales to support a cause.
- Customer Appreciation: Show gratitude to loyal customers by offering exclusive discounts through gift cards.
- Events: Use gift cards as prizes or giveaways for special events or contests.
- Comp Cards: Do you need a quick and easy way to resolve a customer’s negative experience? You can smooth things over by providing them with a gift card with any custom value appropriate for the situation.
By thinking creatively, you can maximize the impact of your restaurant's gift card program and enhance its overall value.
4. Start Selling Your Gift Cards
Now that your gift card program is ready to roll, it’s time to launch it! Ensure that your employees are all fully trained on the program and how gift cards will work in your restaurant. They should be prepared to answer any questions your customers will have about the program.
Encourage your staff to share the news about your new gift card program with customers. You can set up an incentive program for the employees who sell the most gift cards! Promotion is vital — if customers don’t know that your gift cards exist, they won’t buy them.
Give the Gift of Your Restaurant
It’s clear that a gift card program can be a significant benefit for any restaurant. Not only can it increase your sales, but it can also bring in new customers — and turn existing ones into loyal advocates.
Starting a restaurant gift card program is more accessible than most might think. With the right POS system and gift card provider, you can start selling gift cards in no time.