Gift cards have become increasingly popular among consumers in recent years. It’s difficult to find the perfect gift for every occasion, so gift cards are often used holidays and birthdays. Gift cards are extremely convenient for those who purchase and redeem them, but they also yield benefits to restaurateurs themselves:
1. Free advertising and customer referrals – While consumers often purchase gift cards redeemable at a particular restaurant because they know the recipient will enjoy it, many also give gift cards to friends and family as a means of introducing them to establishments they themselves favor. As a result, gift cards can function as a form of complimentary advertising that brings in new customers. Without gift cards, these new customers might never have visited your establishment. Sometimes, the small gesture – and price – of a gift card can lead to return visits and purchases.
Gift cards also have the potential to generate word-of-mouth advertising. People who receive gift cards are keen on using them and may invite friends or family to tag along. When a group of people is brought in by one gift card, the potential for multiple purchases and visits shoots up. Paid advertising can definitely be effective in increasing consumer recognition and generating business for restaurants, but word-of-mouth and recommendations from acquaintances should never be overlooked.
2. Increased sales – Gift cards boost restaurant sales not only by expanding the customer base, but also through purchases that exceed the amount on the card. On occasions where only a few dollars remain on the card, customers will likely return to your establishment to use them up – and will purchase more than the few dollars they have left.
3. Increased engagement of existing customers – Although cultivating new customers is important, tending to existing ones should be even more of a priority. Businesses make most of their money off of loyal customers that return either frequently or at least on occasion. Patrons want to know that restaurant operators care about them and value their business. Gift cards make great rewards for loyal customers and are an attractive compensation for mistakes, such as problems with orders or service.
4. Better security compared to paper gift certificates – Some business owners might think the investment of gift cards is too expensive or too much of a hassle, but they provide plenty of benefits that paper gift certificates do not. It’s possible to forge a paper gift certificate, which could lead to a loss in sales for your business. Gift cards, on the other hand, are very difficult to duplicate.
In addition to the safety aspect of gift cards, their appearance is also beneficial. Paper gift certificates can become torn or dirty, but gift cards will keep your company logo looking pristine. Gift cards can also show that your business is up to date technologically, which is important for many consumers.
The structure of gift card programs and the way in which they are publicized and used to attain business goals may differ from restaurant to restaurant. However, gift cards are excellent options for any business looking for ways to bring in new customers.
