gift card strategy

Optimizing your gift card strategy

By Mo Chaar

The holidays are looking a little different this year: Canadians are feeling the affordability crunch, and a recent holiday gift card survey revealed that inflation is affecting nearly three-quarters (74 per cent) of consumer holiday spending. With the holiday season nearly in full swing and with one-third of restaurants in Canada operating at a loss, establishments must devise creative solutions to boost their bottom lines – and that’s where a smart gift card strategy can help.

The survey also revealed that while inflation is impacting consumer gift-giving plans, 20 per cent of Canadians still plan on spending at least $200 on gift cards this holiday season. Implementing a robust gift card strategy can play a pivotal role in driving repeat business, boosting profits, and cultivating customer satisfaction. Restaurant operators should be taking action now to optimize their gift card programs for the holiday season.

While some dismiss gift cards as an ‘impersonal’ gift that lacks thought or effort, the numbers show that this sentiment is changing. According to the survey, nearly all Canadians think gift cards are a good gift to receive – only six per cent said they don’t like getting them. When asked what type of gift card they would most like to receive as a gift, 42 per cent of Canadians said they prefer gift cards for restaurants. The data is clear: restaurant operators have a significant opportunity to capitalize on this demand for gift cards. Here are four ways operators can drive their gift card sales this holiday season:

Simplify the purchase process

First, restaurant operators should ensure their websites are designed in a user-friendly way to create an effortless purchase and redemption experience. Across devices, the option to buy a gift card should be prominently displayed and easily accessible, enabling customers seeking last-minute stocking stuffers or thoughtful workplace gifts and conveniently add them to their online carts.

Integrate gift cards into promotions

Implementing strategic promotions can prove advantageous for both operators and customers, cultivating a symbiotic relationship. Operators can captivate customers by using enticing offers tied to gift card purchases. This may involve providing a compelling reward, such as a percentage back on every gift card bought, or an additional value, like an extra five dollars for every $50 loaded onto the card. Such promotions strategically target slower months such as January and February, ensuring sustained customer engagement. Furthermore, brands can explore exclusive promotions specifically tailored for transactions made with gift cards. This not only boosts overall customer spending but also acts as a compelling incentive for post-holiday return visits. By introducing limited-time offers or seasonal holiday promotions, businesses can create a sense of urgency, fostering repeat purchases and building a loyal customer base.

 By offering incentives like coupons or rewards program points to customers who purchase gift cards, brands can also establish loyalty and differentiate themselves from competitors.

Incorporate messaging in your marketing campaigns

Marketing emails should highlight the ease and accessibility of purchasing gift cards. In 2022, the total gift card quantity sold was up almost eight per cent from the previous year during the holiday season (defined as Black Friday to Christmas Eve). Since transaction levels tend to be highest during the holidays, by aligning gift card messaging with these key shopping periods and highlighting the advantages of using gift cards, restaurant operators can tap into this customer group to drive engagement and support sales efforts.

Choose the right technology partner

Choosing the right technology partner enables operators to explore different gift card features, like customizable and animated e-gift cards that provide a personal touch for shoppers, with heartfelt video messages or images.

Technology providers that offer seamless integrations between loyalty programs and point-of-sale (POS) systems will make rewarding customers who order gift cards easier than ever before.

RELATED: Stepping up your loyalty program

The key to holiday success

The value of gift cards sold during the holiday season was up over 15 per cent in 2022 from the previous year, and with shoppers expected to spend less this year, having a good gift card strategy in place is critical. November, December, and January boast the highest gift card redemptions, emphasizing the importance of formulating a plan now to capitalize on the holiday season.

As restaurants gear up for one of the busiest times of the year, gift cards can be a powerful marketing tool. The value of gift cards endures beyond the holidays, and brands with a thoughtful gift card strategy will find they can reward existing customers and attract new ones, helping to drive post-holiday sales and long-term customer loyalty.

Mo Chaar is the Chief Commercial Officer of Givex, where he oversees commercial strategy and development worldwide, including the development of GivexPay, as well as managing sales teams within North America.