As restaurants recover from the devastating effects of 2020 and face new virus-, labour-, supply-chain and inflation-related challenges on an ongoing basis, gift cards are proving a vital tool to provide much-needed additional revenue and to acquire new customers.
That’s according to a new Restaurant Gift Card Sales Report 2022 from Paytronix and PYMNTS, which found that restaurant gift card sales were up 22 per cent in 2021 compared to 2020.
While sales may not have recovered to pre-pandemic levels and remain 13 per cent below 2019 sales, this data, which builds upon a mid-year report, signals that restaurateurs are turning to gift cards again as one avenue of aiding their recovery.
Of particular note is that the trend seemed most prominent with full-service restaurants, perhaps indicating that diners have been following through on a desire to return to an in-person restaurant experience. Fine dining gift card sales grew 57 per cent during the year, and family dining gift card sales were up 106 per cent.
“In restaurants, there’s typically 25 to 30 per cent that people spend beyond the gift card [value],” said Andrew Robbins, co-founder and CEO at Paytronixsaid. “If you think about it, [the gift card] was given as a treat, and so you’re going to treat yourself.”
Additionally, the study found that consumers spend more on digital gift cards than physical across various dining categories, so there is a particular added value and increases sales opportunity from eCards. Additionally, since gift cards tend to promote positive dining experiences, those customers are more likely to come back.
“Everybody likes a good referral, so that’s a great guest that’s coming to visit you, and then they eat for free, so they’re going to be a little bit happier about the meal,” added Robbins.
Given the higher spending that gift cards tend to yield, consumers may be more likely to order another beverage or dessert that they might otherwise not have purchased, contributing to their satisfaction with the overall experience. Moreover, the data shows that gift card users are more likely to order more entrees, suggesting that they are bringing more people with them to the restaurant – perhaps as part of a group celebration. As such, gift cards help the restaurant reach not only the card recipient, but also the others in their party.