The great thing about selling gift cards is that it’s about more than making a gift of a nice meal – it’s about giving someone a great experience. Full-service restaurants know this, and they’ve realized that gift cards are an ideal way to turn first-timers into regulars… and regulars into brand ambassadors. Because gift cards, after all, always bring customers back to the brands they love.
So how do restaurants go about winning gift card sales? Do they take a one-size-fits-all approach? Or is their strategy to get a little more targeted and a little more nuanced? Let’s take a look.
A Remarkable Recovery
The pandemic was catastrophic for the restaurant industry… but the numbers show it’s making a strong recovery. According to the Restaurant Gift Card Report: 2023 from Paytronix, gift card sales at full-service restaurants have staged a remarkable comeback from the worst depths of the pandemic. Year over year since 2021, both revenue from gift card sales and total cards sold at full-service restaurants increased, by 12% and 10%, respectively. This is especially interesting when compared with the numbers for quick-service restaurants, whose gift card sales actually declined (despite weathering the pandemic better overall).
Moreover, revenue from gift card sales at full-service restaurants has increased since 2019, although the number of cards sold at full-service restaurants has yet to hit pre-pandemic levels, with one exception: fine dining.
The Impact of Inflation
The majority of card sales at full-service restaurants are for $20, $25, $50, and $100 cards. As compared to 2019, the percentage of $50 and $100 cards sold has risen, while the percentage of $20 and $25 cards sold has fallen, indicating that inflation has pushed up the cost of a dining experience at these restaurants. On the whole, guests have responded in positive correlation with higher prices.
How They’re Winning Sales
Full-service restaurants have broken out every trick in the book to drive gift card sales. One evergreen, can’t-miss tactic that has consistently driven bigger results is the flash sale. Flash sales have worked particularly well for Duffy’s Sports Grill, a Paytronix client headquartered in Palm Beach County, Florida; their holiday gift card sales (during which physical gift cards are offered along with bonus dollars) have delivered incredible results. The results were especially dramatic in 2021: on flash sale days, sales increased by up to 10.9 times the daily average.
Don’t Forget Digital
Digital sales are also a critical tool in the toolbox. Digital gift card sales have seen a 12% increase in revenue year over year, and are often more valuable than physical cards, due to added perks and incentives from digital sales. During the holiday season, Cyber Monday continues to see the highest sales of any day during the holiday period from Black Friday to Christmas Eve. Even though digital cards represent just 12% of the gift cards sold between Black Friday and Christmas Eve, their sales have increased over 70% since 2019.
Would you like to know more? Just download the Restaurant Gift Card Report: 2023 from Paytronix FREE today.