How to explode gift card sales: advice from restaurant industry experts [interview]

Are you optimizing your gift card sales?

Gift card programs increase cash flow. Plus, overspend is common, and spillage rates remain high even with recent consumer protection laws.

I interviewed Fred Gordon and Todd McKenzie to find out how successful restauranteurs boost gift card sales.

Fred Gordon, the owner of Gordon Restaurant Consulting, relies on more than 15 years of restaurant industry experience, to help restauranteurs increase profits. His hands-on approach to management and FOH and BOH development delivers business solutions.

Todd McKenzie, the owner of two Midwest restaurants, Chix Restaurant, and Vegas Wings, uses his 25 years as an independent restaurant owner to make sound business decisions based on proven tactics while embracing changing consumer expectations.

Q: What’s the most effective way to promote gift cards?

Both restaurant experts recommend tying your loyalty program to your gift cards. According to Gift Card Granny,

64% of consumers disclose they have purchased a gift card based on promotions such as extra reward points or bonus cards.

Gordon: Integrating your gift card and loyalty programs is very cost-efficient, and the lift on the return is huge.

McKenzie: I used a direct mail list from our loyalty program. It was a routine promotion that did show success as it beat the previous year’s sales in gift cards.

70% of shoppers said they would be purchasing gift cards in the spring and summer seasons, particularly for Father’s Day, graduations, birthdays, and weddings. Half of these gift card purchasers will buy restaurant gift cards.
Source: Retail Gift Card Association

Q: How do owners increase restaurant gift card sales?

As dine-in rates fall and delivery increases, restauranteurs turn to different promotions to increase gift card sales across platforms.

Website
Social media
In-store

Gordon: The promotion of the gift card is the value. Restaurant owners need to advertise what the promo is and how it impacts the guest. Sell gift cards on your website in a way that is simple and user-friendly.

McKenzie: Website pop-up reminders and in-store displays, like table tents and menu inserts, provide a general reminder that we sell gift cards. Plus, service and sales staff should be suggestively selling to each and every diner during holiday seasons.

59% of gift card users spend more than the amount of the card.
Source: Blackhawk Network

Q: Does it make sense to offer gift card discounts?

The short answer is that it depends.

Gordon: Offering a deal like “buy $50 get $10 in free gift cards” while making the redemption data active during slower periods within a couple of months increases overall lift.

McKenzie: I still don’t feel the “buy $100 get $25 more for free” promotions do anything to impact the profits of the store positively.

49% report not using or forgetting to use gift cards received as a present.
Source: YouGov

Key takeaways

1. Loyalty program integration boosts revenue.

2. Gift cards increase brand awareness.

3. An omnichannel approach is vital to gift card sales.

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There’s no doubt that gift cards are an essential component of any successful restaurant strategy. A study by First Data states that:

53% of guests visited a store more often after receiving a gift card.

However, what works for one NYC restaurant may differ dramatically for another that’s smack dab in the Midwest. Blackhawk vice president of marketing, Theresa McEndree, says:

By optimizing their digital gift card solutions, retailers can keep these younger consumers engaged by giving them the digital experience that they crave.

Choose a reputable gift card program and incorporate it into your restaurant communications strategy for precise results and increased gift card sales.