How Gift Cards Can Boost Your Restaurant Sales

9 min.
Jun 29, 2023 3:11:58 PM

Full Service Restaurant News reported that 44% of consumers have expressed that gift cards motivate them to explore new restaurants they may not have considered otherwise.

Additionally, a staggering 65% of gift card recipients tend to spend 38% more than the face value of the gift card they receive. 

These eye-opening statistics underline the immense potential of gift cards in driving sales and revenue for restaurant owners. 

So in this post, we will explore how gift cards can be a game-changer for your restaurant’s profitability. 

Whether you’re looking to attract new customers, increase customer loyalty, or boost average ticket sizes, they offer a powerful solution to help you achieve these goals. 

Let’s dive right into the first reason gift cards can be a key ingredient for success in the restaurant industry—brand awareness.

Increased Brand Awareness

Did you know that 56% of customers would love to get a gift card from their favorite restaurant? 

This astonishing statistic highlights the incredible potential of gift cards in boosting brand awareness and ultimately driving sales for your restaurant. 

Let's discover how they can elevate your restaurant's brand.

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Illustration: Tablein / Data: FSR Magazine

Imagine the joy on your diners' faces when they receive a gift card to your establishment, as a token of appreciation from their loved ones. 

At that moment, your brand shines as the chosen destination for an extraordinary dining experience, and it's a testament to your restaurant's unique appeal amidst fierce competition.

But the power of gift cards doesn't end there. 

As these fortunate recipients step foot into your restaurant, they have the potential to evolve into loyal patrons, enamored by the exceptional service and unforgettable experiences you provide.

They become more than just customers—they transform into passionate brand ambassadors eager to share their remarkable dining adventures with friends, family, and colleagues.

Word-of-mouth advertising becomes your secret ingredient as these guests champion your brand, expanding your customer base and amplifying your restaurant's visibility within the community. 

Take, for example, Rock & Rose, a beloved restaurant nestled in the heart of Richmond.

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Source: Rock & Rose

They implemented a strategic gift card program and encouraged their loyal customers to share the gift of a dining experience.

In turn, they witnessed an impressive surge in the number of new customers and a significant boost in revenue right from the start.

In summary, if you actively encourage your guests to share their positive experiences and introduce others to your restaurant through the gift card medium, you will attract new customers and foster trust and credibility around your brand.

As more and more individuals become aware of your restaurant's offerings and reputation, your footfall will increase, and with it, the potential for higher sales.

More Opportunities for Promotion

In addition to boosting brand awareness, gift cards present many possibilities to promote your restaurant and amplify sales.

One key advantage is the ability to provide attractive discounts, exclusive deals, and irresistible opportunities for upselling. 

Just imagine your customers’ satisfaction as they redeem their gift cards, unlocking exclusive benefits such as enticing price reductions or complimentary delicacies that will persuade them to indulge even more. 

This strategic approach has proven to be a recipe for success, with numerous restaurants experiencing a surge in sales and revenue by captivating customers with these enticing offers.

One remarkable example is Smitty’s, a renowned family restaurant in Canada.

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Source: Smitty’s on Instagram

They cleverly promote a promotion where customers who purchase a $50 gift card receive an additional $10 gift card as a delightful bonus. 

This irresistible offer not only attracts customers to purchase gift cards but also encourages them to return to the restaurant, generating increased sales and fostering customer loyalty.

Furthermore, gift cards can catalyze upselling and creating unforgettable dining experiences. 

For example, you can create higher-value gift cards that grant access to exclusive perks such as chef’s tasting menus, priority reservations, or behind-the-scenes culinary adventures. 

By presenting customers with the opportunity to elevate their dining experience, you will spark their curiosity and ignite their desire to explore the full spectrum of your restaurant’s offerings.

Take inspiration from the esteemed restaurant, JÖRO, in Sheffield, England. 

With their carefully designed gift voucher for a dining experience at AXL, Chef Luke French’s intimate test kitchen, they offer customers an unparalleled opportunity to witness culinary creativity firsthand.

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Source: JÖRO

The result is an immersive and interactive dining experience where customers will savor every moment, create lasting memories, and eagerly share their extraordinary encounters with friends and family.

To conclude, by embracing these promotional tactics within your gift card strategy, you can elevate your restaurant’s allure, drive customer engagement, and, undoubtedly, enjoy a surge in sales.

So, take advantage of the promotional power that gift cards possess and unlock the full potential of what you can offer to your patrons.

Higher Immediate Revenue

Gift cards can provide restaurants with a significant boost in immediate revenue. 

It's true! 

Customers who purchase gift cards pay for them upfront, regardless of whether the recipient ultimately redeems the gift card or not. 

This upfront payment ensures a guaranteed sale for the restaurant, positively impacting cash flow and financial stability. 

In fact, a Bankrate poll revealed that a staggering 51% of US adults forget to redeem their gift cards, further solidifying the advantage of immediate revenue for restaurants.

Having this additional cash in hand offers a sense of security and flexibility for restaurant owners and provides a safety net in case of unforeseen investments or circumstances.

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Illustration: Tablein / Data: Bankrate

But that's not all.

For the 49% of people who do redeem their gift cards, it often creates a sense of urgency to visit the restaurant and utilize their gift card balance fully.

This prompts them to make reservations or visit sooner rather than later, resulting in increased customer traffic and, in turn, generating even more revenue.

Interestingly, studies have shown that customers tend to spend more than the value of their gift cards. We will delve into this in the next section.

Let’s now just say that this phenomenon presents a fantastic opportunity for restaurants to capitalize on the increased spending potential of gift card recipients.

And if restaurants know how to strategically offer enticing menu items, special promotions, or add-on experiences, they can further maximize sales and revenue.

All in all, with a well-executed gift card program, you can enjoy the benefits of higher immediate revenue, providing stability and resources to invest in other crucial aspects of your business.

Whether allocating funds towards marketing initiatives, staff training, or enhancing the restaurant's ambiance, the financial boost from gift card sales opens doors to further growth and success.

Larger Checks Upon Redemption

As a restaurant owner, you'll be thrilled to learn that gift cards have the incredible potential to boost your sales by leading to larger checks upon redemption. 

When recipients of gift cards choose to redeem them, they often end up spending beyond the value of the gift card, resulting in a significant sales increase for your restaurant. 

Let's dive into the statistics that support this phenomenon.

A whopping 81% of consumers with a gift card to a fast-casual restaurant reported spending beyond the original value of their gift cards. 

On average, they spent an additional $20, showcasing their willingness to indulge in more of what your restaurant has to offer. 

But that's not all—the majority of consumers with a gift card to a fine dining establishment revealed that they, too, have spent beyond the value of their gift cards.

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Illustration: Tablein / Data: Hospitality Technology

These numbers demonstrate the potential for substantial revenue growth through gift cards.

So, how can your restaurant become the one that reaps the benefits of larger checks? 

One way is through effective upselling techniques. 

For example, you can empower your staff to highlight enticing menu items, recommend special promotions, or suggest add-on experiences to your patrons. 

By doing so, you can capitalize on the fact that consumers are 2.5 times more likely to pay full price for an item when using a gift card.

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Illustration: Tablein / Data: CBS News

This presents a prime opportunity to showcase your premium offerings and encourage customers to indulge, resulting in increased sales and higher check averages.

Even in cases where customers may spend less than the original value of their gift cards, there's still a valuable gain for your restaurant. 

The remaining balance will encourage your guests to return, increasing the likelihood of repeat visits and fostering customer loyalty. 

It's a win-win situation for both your patrons and your business.

Improved Customer Loyalty

Loyal customers are the lifeblood of your business. 

They not only bring in consistent revenue but also act as advocates for your restaurant, spreading positive word-of-mouth and attracting new patrons.

Gift cards can play a pivotal role in nurturing customer loyalty, further motivating them to keep returning and spending.

Let's explore how you can leverage gift cards to improve customer loyalty and boost your sales.

First and foremost, it's essential to recognize the value of retaining existing customers. Did you know it costs five times more to attract a new customer than to keep an existing one?

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Illustration: Tablein / Data: Invesp

And yes, attracting new customers is important, but it’s even more crucial to prioritize the satisfaction of your existing patrons.

Rewarding them is a powerful way to show you appreciate them, and gift cards can be a valuable tool in achieving this goal.

However, it's important to note that randomly distributing gift cards may yield different results than the desired ones (at least not in your favor).

Instead, you need a strategic approach to reward your customers effectively.

One powerful method is social media engagement.

Take inspiration from Jersey Mike's, an American sandwich chain, which successfully retains loyal customers by offering them the chance to win gift cards by playing games on Instagram.

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Source: Jersey Mike’s

This combination not only rewards loyal customers but also helps to expand the restaurant's online presence and maintain a solid social media following.

Additionally, you can consider using gift cards as a gesture of goodwill when mistakes occur in ordering or delivery.

By offering gift cards to customers affected by errors, you will not only fix the situation but also demonstrate that your guests' satisfaction is paramount to your restaurant. 

This level of personalized attention and care will reinforce their loyalty and make them feel valued.

And remember, your loyal customers are the backbone of your restaurant business. 

By consistently rewarding them with thoughtful gift card incentives, you'll create a strong bond with your patrons, driving repeat visits, positive recommendations, and, ultimately, increased revenue.

Conclusion 

In conclusion, we hope that this exploration of gift cards has shed light on their immense potential for your restaurant.

By harnessing the power of gift cards, you can elevate your brand, attract new customers, and foster loyalty among existing patrons.

The ability to offer enticing promotions, personalized rewards, and unforgettable experiences can significantly impact your sales and overall profitability.

So, we encourage you to reconsider the untapped potential of gift cards and embrace their power as a valuable asset in your restaurant's success.

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