With Mother's Day, Father's Day, and scores of students graduating in May and June, the coming two months make up the second-highest period for gift card sales, following the holidays.
Experts says restaurants should not eschew or ignore the value of a strong gift card program, especially as data suggest consumers typically overspend $23 beyond the gift card value.
Between Nov. 28 and Jan. 9, First Data, a provider of merchant service gift card programs, hired an outside agency to send send mystery shoppers into 658 stores, including casual-dining restaurants. They found that not every casual eatery has a strong gift card program in place, whether due to lack of visibility, a void of information about the program, or poor signage.
FSR spoke with Euphemia Erikson, director of product marketing, and Mark Putman, senior vice president of prepaid solutions, at First Data to learn the best practices for gift card programs, common mistakes casual-dining restaurants are making, and the impact a strong gift card program can have on revenues.
FSR: In a nutshell, what are some of the best practices for casual-dining restaurants when it comes to gift card strategy?
Erikson: It comes down to having a great assortment, telling your customers that you have a gift card program, and integration if you've got cards that are online or in store—leveraging that omni-channel approach.
FSR: What are some common mistakes restaurants make with gift card programs?
Erikson: You need to have the gift cards in the store. Sometimes restaurants don't have displays with the gift cards, or the displays aren't full. We suggest you have a couple of different designs, so that you're reaching different clients and different spending occasions.
Promoting the gift card program to customers while they're in the restaurant can be key. Also, if you have a website, make sure you're promoting it on the website or with the right signage.
Putman: You also have a customer satisfaction angle. Say you have customers giving you a bad service review; with gift cards, you very much have an opportunity to reach out to the customer with a $5 gift card. It's a different way of engagement and one we're seeing take off right now.
Erikson: Similarly, if you're on social media or Yelp and you get a customer who writes a lovely review, you can extend a gift card to reward that customer. He or she clearly loves your business, and will probably promote you more.
FSR: Within a casual-dining restaurant, where should operators place gift cards or signage?
Erikson: Even if you're on a busy street, you have an opportunity to work with the landlord on monument signage or signage outside. If you have great foot traffic, something on the sidewalk, especially during the holidays, is nice.
Indoors, you can use front door stickers and promote the cards on your menu. And use your employees, give them pins—they are your best sales people. You can incentivize them to sell gift cards, and you can incentivize customers with free food items or discounts if they buy gift cards.
Finally, the check is another opportunity. Mention the program at the bottom of the check or receipt.
If you have a website, make ensure you have a clean, easy user experience so consumers can come online and buy your card easily.