Discover Eight Unique Secrets for Unlocking the Full Potential of Gift Cards for Your Restaurant

Discover Eight Unique Secrets for Unlocking the Full Potential of Gift Cards for Your Restaurant

Unlocking the Full Potential of Gift Cards for Your Restaurant

If you’re a restaurant owner, embracing gift cards as a year-round revenue stream is vital. In this guide, we’ll explore why gift cards aren’t limited to holiday sales and delve into eight effective strategies for maximizing their profitability. Plus, stay tuned for an additional bonus tip at the end!

Understanding the Gift Card Opportunity

Let’s begin by understanding the magnitude of the gift card market. Research reveals that restaurant gift cards are the top choice for consumers, surpassing popular retail options like Bed, Bath & Beyond and Macy’s. This presents a significant advantage for restaurant proprietors seeking to leverage this trend.

Moreover, nearly everyone either purchases or receives a gift card annually, underlining the immense potential for restaurant owners. When a gift card is issued, there are two potential outcomes: either a portion (roughly 15% of all gift cards) remains unredeemed, resulting in pure profit for the restaurant, or the cardholder exceeds the card’s value, generating additional revenue.

What I mean by that is, somebody receives a $100 gift card and they come in and they spend $75, so they have $25 left. When they come back in – because they don’t want to waste the value that’s left on the card – they’re probably going to spend at least another $50 again. So, now you’ve made a lot of additional revenue by getting this gift card in somebody’s pocket, so this is the best of both worlds.

Importantly, every gift card recipient represents a potential lifelong customer, with just a few visits needed to establish a lasting relationship.

Strategies for Maximizing Gift Card Revenue

  1. Discounts for Loyalty Members: Offer discounted gift cards to loyalty club members to incentivize purchases and drive sales. Alternatively, provide a complimentary gift card with every purchase, encouraging repeat business while minimizing the cost of promotion.

    How this would work is that they can get a $100 gift card for say $80. This is a great way to promote the cards, and drive sales.  A better way to do it is to offer a free $20 gift card with the purchase of a $100 gift card.  You’ll receive more money, and instead of giving away 25% of the purchase price you’ll only be giving away 20%.
  2. Fundraising Partnerships: Collaborate with schools, nonprofit organizations, and community groups to sell gift cards as part of fundraising efforts. This not only boosts card sales but also fosters positive word-of-mouth within the community.

    Again, take the $50 gift card and charge the community group, say $30 for each card. That way, when they sell them for $50, they make $20. When the new customer comes in, you’re getting $50 worth of spend and you have the opportunity now to enroll these new folks in your loyalty program.
  3. Local Business Outreach: Distribute small gift cards (maybe $5 or $10 worth) to neighboring businesses as a gesture of goodwill and an introduction to potential corporate clients. Focus on new businesses in the area, capitalizing on their interest in exploring local dining options.

    Going door-to-door, distributing gift cards, is a way to introduce yourself to other business owners in the area that are going to need to be ordering food in from time to time.

    It creates great goodwill and reciprocity where you come in and say, “Hey! My name is Shaun-Patrick, and I own the restaurant down the street. Here’s a $5 gift card for you to come see me sometime this week. And, again, when somebody comes in for the first time, get them enrolled in your loyalty program and just view this as a welcome to the neighborhood gift.

  4. Corporate Partnerships: Forge partnerships with call centers and large offices by offering gift cards as incentives for employees. This mutually beneficial arrangement enhances lunchtime business while positioning the restaurant as a preferred dining option.

    Put $10 on the cards, and give them to the HR Director, Office Manager, or whomever is in charge of distributing items to all employees – as a way to earn their business. And this is also a way that the HR Department of the company can use your gift cards as a holiday gift for their employees. It doesn’t cost them anything, and it will help them win favor with the entire staff. Don’t forget to make sure that your website address is printed on these cards and leave some menus as well.
  5. Loyalty Program Integration: Integrate gift card purchases and reloads into your loyalty program, rewarding customers with bonus points. This encourages both gift card sales and repeat patronage from existing customers.

    In this case, you’re rewarding your customers for buying gift cards and, as a part of your loyalty program, you can offer bonus points every time they buy a new gift card or reload an existing one. Another way to encourage sales from your existing loyalty members.
  6. Employee Sales Competition: Organize an employee sales competition to drive gift card sales, with the top seller receiving a percentage of their total sales as a prize. Leveraging the unredeemed portion of gift cards ensures a cost-effective incentive for staff.

    This promotion will quickly drive sales, and here’s how it’s going to work. You’re going to announce an in-store promotion to see who can sell the most gift cards over a 30-day period.  Open this competition to all of your employees, and what you’re going to do is explain to them, “There’s going to be one winner and this is the prize. The lone winner of this contest, whoever sells the most gift cards, is going to get 10% of the face value of all the gift cards they’ve sold.” 

    NOTE: And if you really want to bump this up, give them 10% of the value of all the gift cards sold. So, if all your employees sold $1,000 worth of gift cards, you give this one employee $100. And, remember, this is not going to cost you a dime because 15% of gift card value goes unredeemed. So, this is a win-win for you. It motivates the employees, gets that little competition going and it’s one prize, winner take all.
  7. Trade-In Opportunities: Utilize gift cards as trade currency for services such as advertising, equipment repair, and other business expenses. This transforms routine expenditures into marketing opportunities, expanding the restaurant’s visibility and reducing cash outflows.

    So, we know the statistics that about 15% gift cards never getting redeemed, so, if you’re using your gift cards just like cash, figure that is another way to get a 15% discount of the amount you have to pay for outside products and services. So, if you trade somebody a $10 gift card, think of it more as $8.50.

    Think about this. When you pay cash for all these services, that doesn’t bring anybody into your restaurant? But if you can pay with gift cards, that starts bringing people back into your business.  You’re doing business with people that do business with you and it’s like turning your regular expenses into a marketing opportunity.

    You can trade for radio advertising, TV ads, print ads and other marketing services. Our clients have traded for equipment repair, landscaping, and even auto repair. Dealerships love it because they could use the gift cards to treat their employees to lunch.

    Please Note: If you use gift card for trade, be sure to report every penny to the IRS.
  8. Personalized Gifting: Implement a user-friendly platform for online gift card purchases, allowing patrons to customize gift cards for friends and family. Offering discounted gift cards to recipients incentivizes new customer acquisition and boosts foot traffic.

    So, with our platform, you’ll have your own page where anyone can visit. On this page patrons will buy a new gift card, but instead of buying it for themselves they’re buying it for a friend. They can enter their friend’s email and add a friendly little note there. Once they hit purchase, the gift card’s on its way to their friend.

    If you want to add more benefit to this opportunity, you can offer the friend’s gift card at a substantial discount.  That makes the sender happy to receive the savings, but more importantly, the recipient now has the opportunity to become a patron at your restaurant.  And of course, you get a new guest.

Bonus Opportunity: Expand Distribution Channels

Consider selling gift cards at high-traffic locations like Costco or local supermarkets to tap into a broader customer base. Partnering with retail giants enhances visibility and accessibility, driving sales and increasing brand exposure.

In conclusion, integrating these strategies into your restaurant’s business model can unlock the full potential of gift cards as a consistent revenue stream. Whether you choose to implement one or several of these tactics, embracing gift cards as a year-round opportunity is essential for sustained growth. If you require further assistance, don’t hesitate to reach out for personalized guidance tailored to your restaurant’s needs.

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