Restaurant gift card redemption: A guide for restaurateurs
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With the holiday season upon us, gift cards are a major consideration for gift-givers. Gift cards can be the best solution for the hard-to-buy-for, and restaurants can lean into this to help boost their bottom line and profit margins. So what can restaurant owners do to maximize their gift card sales and get customers in the door? What’s the best way to manage restaurant gift card redemptions? And what kind of restaurant gift card ideas work the best?
When used correctly, a gift card program can increase customer loyalty, boost sales, and get chairs filled like they should be. For many customers, a gift card represents the perfect gift. How many people do you know who need a last-minute gift idea for family members or foodie friends? What if you could get customers to ditch holiday gift cards from Amazon or other retailers in favor of your own? With the right promo, people will ditch Starbucks, Chipotle, or Buffalo Wild Wings gift cards in favor of your small business. Let’s dive in.
Why gift cards?
Gift cards are an all-around good idea. Customers who are fans of your restaurant can share their love by giving cards to their loved ones, who may become regulars in turn. Best of all, because they’re paid up front, restaurants can collect immediately on future service. And that’s future service that’s not even guaranteed. While considering gift card sales not being used may seem cynical, it’s simply true: Sometimes, diners don’t end up using the gift card. That means pure profit for a restaurant and a way for people to give friends the best gift possible. It’s a win-win scenario.
But it’s much better of course if a diner does in fact redeem their restaurant gift card and enjoy a meal at your establishment. Essentially, you have your customers doing your advertising for you as their potential favorite restaurant. Gift card purchases can make a sizable contribution to your profit margin while bringing in new customers. What’s not to love? When diners come to redeem gift cards, you’ll already have made money.
Rather than having to aggressively offer coupons online or in local publications, gift cards are an excellent passive income vehicle. By offering gift cards, you also do your loyal diners a favor in giving them a gift option they might not have considered. Save someone some time from holiday shopping and they’ll likely be quite thankful.
Old school vs. new school: Physical gift cards and e-gift cards
We live in the future, and that means plenty of options for gift cards. While physical gift cards that resemble a debit or credit card, a gift certificate, or simple voucher paper are always an option, there are plenty of other choices as well. Restaurants can offer digital gift cards stored on a mobile device that helps a diner remember their gift card balance.
Furthermore, rather than being relegated to a slot in a wallet or purse, a digital gift card will be on a device that people check regularly and carry everywhere, i.e., their phone. So, seeing your gift card on their phone will be a welcome reminder that yes, indeed, they do have a free meal or more coming their way and heck yes they should use it. If your restaurant has a mobile app, building gift cards into it is a move we recommend. Your restaurant app should be available on both Apple and Android for maximum diner reach.
A smart customer will use the entirety of their remaining balance in your restaurant and may find that it doesn’t cover the whole bill. No worries! In a diner’s mind, they’ve already saved substantially on the meal and will be happy to pay extra to complete the meal.
Expiration dates and other options
A wise move for restaurants is to set an expiration date on gift cards and potentially impose other gift card terms. Doing so encourages diners to use the card quickly and scoot in the door. Combine that with a positive dining experience that they may well share on social media and you’ve got a winning proposition.
You can also add other limitations to your gift cards, e.g., dine-in only instead of takeout or allowing takeout directly through but not via third-party apps like DoorDash. Encouraging guests to experience your full range of service will nudge them towards becoming regulars and, hopefully, telling their friends about your establishment as well. Ideally, you’ll be confident enough in your service to warrant such a maneuver. Getting your front-of-house (FOH) game in tip-top shape will help make the dining experience one to remember.
You can also limit gift cards to not be valid on certain busy dates like special occasions. Christmas and Mother’s Day, for example, are notoriously busy days and you may choose to opt out these dates. That’s up to you, however—it depends on how in demand your restaurant is and how many seats you expect to fill on those days.
How to drive gift card sales
If you’re in the business of selling gift cards, you’ll want to make it known. In addition to putting signs on the walls and potentially on the tables, make buying a gift card an option when guests check out. Seeing the option before they’re about to pay will help trigger impulse purchases and may give customers a bright idea to buy a gift for someone they’ve been thinking about. And hey, when they buy gift cards, everyone wins.
Additionally, advertising online can work well. If your restaurant has a website or social media accounts (and really, you should) be sure to let guests know they can purchase gift cards online.
Because gift cards work as a payment method that’s simply been paid ahead of time, you can mark gift cards into your monthly sales. If you want to offer a recurring gift card that can be set up on a subscription basis, that’s doable too: Customers can add to a digital or debit card-style gift card account balance on a recurring basis should they choose to do so. As long as the card number stays the same, it can work just like a prepaid card.
Make the gift worth it
With a great gift card in hand, guests will walk into your restaurant excited to see what you have to offer, and you’ll want to ensure they have the best dining experience possible. That means equipping your servers with the best tools in the market. It also means being able to connect with diners as easily as possible.
So, if you’re looking for a system that gives fully customizable floor plans, syncs with the best point of sale systems, and allows for online reservations, check-ins, and waitlists, you’ll probably be interested in Yelp Guest Manager. It does all that and much more, and will make new diners thoroughly impressed with your service.
Curious if it’s right for you? Want to give it a test drive? Reach out to us for a free demo and we’ll get started. It’s gift card season, and it’s time to get new regulars in the door.