‘Tis the season – to expect a digital gift card in your email. And it was probably purchased on Cyber Monday.
As inflation eases and December approaches, guests across the country are preparing themselves for the holidays in a time-honored tradition: purchasing gift cards. As reported in The Restaurant Gift Card Report: 2023 from Paytronix, ~45% of annual gift card sales for the year occur in the months of November and December, with a large portion of those sales occurring between Thanksgiving and Christmas Eve. Black Friday has traditionally kicked off this vital time of year, and 2023 has reason to give retailers hope, with the value of gift cards sold outpacing inflation and total cards sold rising. Gift card sales this year also point to changing consumer behavior, with digital sales continuing to increase and Cyber Monday asserting itself as the higher-volume day for gift card sales.
In terms of total sales, restaurant gift card sellers have reason to be jolly: total dollars spent on restaurant gift cards was up 7.3% year over year, outpacing the latest reports of core inflation of 3.6% and establishing a new multi-year high. The good news continued in terms of total numbers of cards sold: over the entire weekend, the number of cards sold increased by 0.4%, with gains led by digital cards and cards for full-service restaurants. This is a reversal from last year, when the number of cards sold during the holiday season decreased. Unsurprisingly, the value per card also increased, once again highlighting the effect of inflation on gift card purchasing behavior.
Total value of gift cards sold between Black Friday and Cyber Monday increased in 2023.
Digital card sales led the way, increasing 8.5%, while physical card sales dropped 2.6%. Moreover, Paytronix data shows an increase in dollars spent on cards at both quick-service and full-service restaurants, full-service restaurants were clearly the favorite with a 9.6% increase (as opposed to quick-service, which only saw a 2% increase and a decrease in the number of cards purchased). It appears that when it comes to holiday gifting, guests favor the full-service experience.
Given the rise in digital card sales, it is unsurprising that Cyber Monday has become a larger sales day. While the value of cards sold increased on both days, largely driven by deals offered by brands, the number of cards sold dropped on Black Friday, while the number of cards sold on Cyber Monday increased.
The number of cards sold on Black Friday decreased, while Cyber Monday saw increased gift card sales. This change was, in part, driven by brand deals.
Together, these trends point to the need for restaurants to incorporate digital gift cards, as an integrated part of their digital guest engagement strategy. As guest purchases are driven more and more by the marketing outreach of key sales days, such as Cyber Monday, brands without a gift card marketing outreach tied to their CRM risk losing business to more forward-thinking brands. And as more and more gift cards are delivered via email as opposed to physically, the regulatory and accounting concerns around those cards make a strong payments platform essential.
Want to catch up on all the holiday gift card sales trends? Check out our blog predicting the 5 Gift Card Sales Trends for This Holiday Season.