As a restaurant owner, we understand the holiday season is hectic, and gift cards might not be your top priority. But with over a decade in the industry, we can assure you that including holiday gift cards can actually boost your restaurant revenue!
This effect is especially noticeable after the holiday rush. Plus, it has the potential to attract new customers, bring back previous ones, and even turn one-time visitors into regulars well beyond the holidays!
Without further ado, let’s explore how gift cards can work wonders for increasing your restaurant’s sales and revenue.
Do Gift Cards Increase Revenue for Restaurants?
While gift cards may not directly add to your revenue, they can work wonders for boosting restaurant sales and profits.
How? Well, gift cards help streamline operations by offering improved forecasting, leading to increased efficiency in managing inventory and staff allocation.
Moreover, gift cards have a knack for drawing in new customers, especially during the holiday seasons when they are often given as gifts.
This means folks who might not have known about your restaurant will walk through your doors, presenting an opportunity to increase revenue!
Here’s How Gift Cards Can Help You Increase Revenue for Your Business
Gift Cards Redeemers Are Less Price-Sensitive
Research indicates that customers who use gift cards tend to splurge more when they visit a store or a restaurant. Just check out the numbers – 72% of gift card redeemers end up spending approximately 38% more than the actual value of their gift cards!
While these stats are for the retail world, the same principle holds true for restaurants. The reason behind this behavior is that people don’t immediately equate gift cards with actual cash, giving them a feeling of having an additional ‘budget’ to spend.
So, not only do you gain revenue from the person redeeming the gift card, but also from the person who originally bought it, making gift cards a pretty lucrative deal overall!
Gift Card Purchasers Usually Spend on Themselves Too
In addition to grabbing gift cards, those buyers might treat themselves too. So, the folks who come by to purchase gift cards at your restaurant might just decide to dine in as well – it’s a convenient choice for them.
This translates to not just selling gift cards but also getting more dine-in customers at the same time! It’s like hitting two birds with one stone, making the most out of the visit.
Gift Cards Allow for Revenue in Advance (Cashflow)
When your customers buy your restaurant gift cards ahead of time, you get instant revenue that you can put to good use.
Think of it like how Starbucks lets customers reload their Starbucks cards with cash. They get immediate funds that they can use right away, just by swapping the card’s credit for a cup of coffee.
You can take advantage of this upfront cash to invest in marketing and attract more customers during the holiday season. It’s kind of like having an interest-free loan that you can use to bring in more customers.
Increase Net Profit by Having Better Inventory Management & Staff Allocation
Gift cards aren’t just great for customers; they can also work wonders for forecasting and managing your inventory efficiently. Once those gift cards are sold or given away, you’ve got a decent estimate of how much of certain ingredients you’ll be moving during that period.
This prediction lets you plan your inventory smartly, cut down on waste, and boost profits by trimming overall costs.
For instance, if you’ve sold 1,000 gift cards promising a free steak for table values over a specific amount, it makes sense to bulk buy beef and slash the cost per pound from your suppliers.
Gift cards and vouchers can also help you clear out inventory, especially if they’re approaching expiration. Just make sure the goods are still in good shape and safe to consume!
The same goes for staff allocation. If your gift card or voucher campaign spans a month, you can schedule staff accordingly. And if your vouchers are only valid on weekdays, you can consider having extra hands on deck during the weekday rush hours.
In a nutshell, gift cards give you a heads-up on crucial details like expected customer numbers and anticipated food portions during specific periods.
Expiring Vouchers Could Indirectly Lead to More Profit
When you provide vouchers in advance, it’s pretty standard that not every voucher will be cashed in.
Now, here’s where it gets interesting – those unused or expired vouchers can actually add a little extra to your revenue and profit. Why does this matter? Because you’re not obligated to honor the voucher’s value beyond a certain expiration date.
This is especially noteworthy during the holidays, like Christmas when retail and restaurant gift cards are being gifted. It’s not unusual for quite a few of these to remain unclaimed by the recipients.
Restaurant Gift Cards are Great for Attracting New Customers
As we mentioned earlier, a lot of folks grab vouchers or gift cards for their loved ones during the holidays. That translates to a wave of new customers stepping through your doors, giving a direct boost to your revenue and profits.
And the beauty of it? You don’t need to shell out a penny on advertising! Many of these fresh faces might develop a strong liking for your restaurant and turn into loyal customers.
Some might even hop on your email list or join a loyalty program. This opens up a direct line for marketing, with a higher chance of conversion because they’re already warm leads.
Crafting your gift cards cleverly can also spark more referrals. Plus, you can tailor them to attract specific groups. For instance, if you’re aiming for more family visits, you can try out gift cards with discounts for families or a ‘kids eat free’ promo during the holidays.
Increase Revenue Through Collaborations
Okay, it might sound a bit confusing at first, but stick with us. In addition to the usual bonuses, many HR departments hand out gift cards during the holidays to motivate and keep their employees happy.
And guess what? Some employees might also participate in ‘secret Santa’ corporate events, providing a great opportunity for you to sell and promote your restaurant’s gift cards.
Here’s what you can do to get started. First, you can try reaching out and presenting your gift cards to HR departments in corporate setups.
The other alternative is that you can spread the word and directly promote your gift card program to the employees.
Whichever route you take, the key is to sell your gift cards for less than their actual value. For instance, you could offer a $50-worth gift card for $40 – creating a sweet incentive for them to bring in revenue upfront!
Sure, you might miss out on that initial amount, but remember those unclaimed vouchers we talked about earlier? Most times, when you factor that in, you won’t be in a net loss.
Even if you end up with a small loss selling the voucher at a discounted price, the influx of new customers through your vouchers can make up for it. And, some of these customers might just become loyal patrons, ensuring recurring revenue in the long run!
Restaurant Holiday Gift Card Promotion Ideas
Try Out Early Bird Holiday Gift Cards
This approach gives you a jumpstart on cash flow, and the two popular ways to pull it off are either selling the voucher at a discounted price (as we mentioned earlier) or throwing in a complimentary freebie!
If you want to boost the gifting of your vouchers, we suggest leaning towards the discounted early bird voucher path. It’s a win-win: easy for the buyer to gift, and enticing enough to draw the recipient in as a new customer.
Remember, not every voucher gets redeemed, according to industry averages. So, you’re raking in revenue even if they don’t all get cashed in.
In our demo above, you can see there’s a 10% discount for purchasing vouchers before a certain date. With KlikNRoll’s gift card/voucher management system, setting up your gift card criteria is a breeze – no fuss, no hassle.
Plus, we’ve got a robust tracking system for both physical and digital gift cards. If you’re curious about our system, click the button below to learn more – no strings attached!
‘Minimum Purchase’ Upselling Vouchers
This type of voucher is meant for upselling and is mainly targeted to lure and bring in larger crowds. The general idea of the ‘minimum purchase’ voucher is to provide something of perceived value but at the cost of a minimum spend.
An example could be giving a complimentary entree, bottomless drinks, or maybe dessert for the table but with a minimum spend of $200.
The main objective is to encourage upselling naturally, as most people would add on a few items to hit the benchmark if they’re not quite there yet. These types of gift cards are great for referrals, as some customers will bring more peopletoo get a good deal!
You can also change and adjust your target segment based on the gift card. If your main objective is targeting the office crowd, a bottomless drink voucher could be the way to go. However, if it’s families that you’re targeting, you could go with something like unlimited french fries for the table.
French fries are lower in cost to produce compared to other types of snacks, which is a plus!
Buy X get Y Vouchers
The ‘buy x get y’ type of gift card is, again, straightforward. The idea is that customers will get a complimentary item (y), with a purchase of a said item (x).
For example, you can sell or give out gift cards that allow customers to redeem a side of chicken wings with every purchase of pasta.
The beauty of these types of vouchers is that you’re able to use them to strategically clear out older inventory, or maybe take advantage of bulk ordering in order to generate better profit margins for some items.
Let’s say you want to clear out your wine inventory, you can opt to use a similar concept to the voucher in the demo above! Our system is pre-installed with many options that you can simply tick and untick, based on your preference – just in case you’re looking for ideas!
The Bottom Line
As you can see, holiday gift cards are great for revenue before, during, and even after the holiday seasons, as many of your redeemers might just end up as loyal customers.
Remember, vouchers are great for predicting sales, and anticipating customer traffic not only helps streamline operations but also enhances inventory management. It opens up opportunities to make bulk inventory purchases, cutting costs and boosting profits along the way.
If you’re interested in learning more about our voucher management system, click the button below and it’ll bring you to our product page!
Hey there! I’m Jeffrey Hau, and my journey in the digital world started after I wrapped up my psychology degree at UCLA. Imagine coming back to the bustling streets of Hong Kong from the tech haven of Silicon Valley – it was a whirlwind of inspiration! Seeing how social media platforms were evolving at breakneck speed and realizing the limitations of traditional advertising in this digital age, I decided to dive in.
In 2012, I laid the foundation of Prizm Group. From our humble beginnings, we’ve now blossomed into a global powerhouse with a team of over 200 passionate professionals. Our HQ is right here in Hong Kong, and we’ve spread our wings to SG, AU, NZ, JP, and China.
As a digital problem solver, our team found that several industries are in need of reservation systems, especially for F&B, Hotels, Beauty, and Medical sectors. Our digital magicians started crafting reservation systems tailored to cater to these specific needs. We extended our expertise to e-commerce, voucher management systems, and campaign management systems, combining them into KlikNRoll – an all-in-one solution. We deep dive into various industries, understanding their unique challenges and developing innovative solutions.
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