What Your Restaurant Should Look for In a Gift Card Program

Posted by Elizabeth Kelly

Elizabeth was the Marketing Specialist for SpeedLine Solutions from 2017 to 2021. As the previous Managing Editor for the On Point Blog, she ensured our audiences got the restaurant and delivery technology information and news that we're known for.

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Research shows that gift cards consistently outperform other business marketing tools. Unlike coupons or discounts, they are prepaid and don’t require a large investment for the business. That makes them very attractive for both large chains and independent restaurants.

Benefits of offering gift cards in your restaurant

Gift card programs offer many benefits, including: 

  1. Attracting New Audiences: Gift cards serve as an effective introduction to your restaurant, drawing in new customers intrigued by the prepaid experience.

  2. Creating Upsell Opportunities: Over half of gift card users return for subsequent visits, creating valuable opportunities for upselling.

  3. Boosting Spending: Approximately two out of three consumers tend to spend nearly 40 percent more than the value of the gift card, contributing to increased revenue.


How to choose the right gift card provider

The first step is to find a gift card provider that matches your restaurant's needs. We spoke with Michelle Tempesta, head of Marketing at Paytronix, and she shared some considerations:

“Find a gift and loyalty provider that provides value outside of just the gift cards. Partner with a company that specializes in gift cards, and the reporting, security, and sales channels that go along with them.”

Tempesta explains that restaurants with multiple locations should also look for gift card providers that can move funds from where a card was purchased to where it was redeemed. For example, a customer purchases your gift card from location A and then redeems the gift card at location B a few weeks later. The gift card provider should be able to move the money from the purchasing location to corporate, then release the funds to the store it was redeemed at, or move the money from the purchase location directly to the redeemed location.

This is especially important for franchisees and large chains, where accounting for each location is separate.

As for security, Tempesta suggests: “Look for a gift card provider that uses registration codes, similar to a PIN, and non-sequential numbers for the cards. Sequential card numbers allow thieves to guess at card numbers until they get one right.

Finally, ensure the gift card provider integrates with your POS system. Your staff should be able to check the balance on gift cards at the POS.


Replenish your gift cards

If you use the same provider for your gift cards and loyalty programs, you may be able to store customer data on the same account. This is important for high volume, low cheque concepts like pizza shops that sell by the slice. Your most frequent customers can take advantage of using a preloaded card in place of cash.

How it works is a customer can set up their card to auto-replenish funds when their balance reaches a certain amount. For instance, if the balance on the card drops to $10, the system would automatically reload the card to $40 and charge the credit card for that $40. These cards can easily be added to an app for customer convenience.


How to sell gift cards

Strategies for selling your gift cards will depend on the size of your program. If you are a large chain with multiple locations, you will want to have a larger distribution chain for your gift cards, where a single location may be able to run smaller campaigns.

Ensure your gift cards are displayed clearly in your restaurant

The simplest way to market your gift cards is to display them prominently for your customers to see. Train cashiers to point out cards displayed at the cash.

Run a marketing campaign promoting your gift cards

Crafting an effective gift card sales strategy involves targeted marketing efforts. Large chains benefit from an extensive distribution network, while smaller establishments can run local campaigns. Send out box toppers and flyers, and hang signs in your store to promote your gift cards. Consider treating the buyer to a special bonus, like a $5 gift card they can use when they purchase a card worth over a certain amount. 

Make your website gift card-friendly

Optimize your website for gift card sales, allowing customers to make last-minute e-gift purchases. Make sure your online ordering program allows customers to redeem their gift cards.

Partner with local businesses

Consider partnerships with third-party stores, leveraging distributors to expand the reach of your gift cards to local warehouses and grocery stores.

Don’t wait for the holidays

Gift card sales begin to increase in mid-November and continue until December 25th, so consider timing your gift card promotions around that time. Thinking of setting up a gift card program? While most gift cards may be sold leading up to the holiday season, setting up a new gift card program can take some time, so take advantage of birthdays and other gifting occasions now.

Gift cards are an excellent marketing strategy to introduce your restaurant to new customers, and increase sales when implemented correctly. For pizza restaurants aiming to streamline operations and enhance customer engagement, the combination of gift cards and a robust POS systemproves to be a winning strategy. Explore the practical benefits, embrace strategic marketing, and position your business for sustained success.


Posted on Wed, Jun 05, 2019 @ 07:06 AM.
Updated on January 25, 2024 @ 8:32 PM PST.

Tags: Restaurant Marketing

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