This Restaurant is Seeing Huge ROI on Gift Cards

    This Restaurant is Seeing Huge ROI on Gift Cards

    Gift cards aren't something you think of as a huge money-maker.  But ROI on gift cards can be astonishing.  Especially if you really know how to use them. 

    gift card

    This is a quick lesson learned by one of my clients.  They're a popular restaurant in a smaller suburb outside Minneapolis.  And while they've always been popular, they struggle to grow.  

    They recently installed a new POS system, and their POS rep recommended they call me for gift cards.  And when people find out the cost of gift cards, they often waiver on whether they need them.  "Those are expensive," Sandy, the owner remarked to me. 

    "Sandy, I understand your reservations, but lets talk about the ways you make money on gift cards."  My standard response. 

    So, how do you make money with gift cards? 

     1.) You sell gift cards to people in the store. 

     Seems simple enough, but there are even pointers here.  

    First of all, 85% of gift cards get used within 60 days.  But that other 15% often doesn't get redeemed at all.  That means for every $1000 in gift cards you sell, you get $150 free. Not a ton of cash, but it's free! 

    Second, 66% of people with gift cards spend more than the value of the gift card.  38% more to be specific.  So if you sell $1000 of gift cards, it equates to $1300 in actual sales. 

    Third, gift cards aren't redeemable for cash, and they're not refundable.  So, if someone buys one, that cash is yours.  You've already made it.  Almost like someone making a downpayment on dinner! 

    So, where do people go wrong here?  There's a couple of easy things that keep people from selling gift cards.  But the biggest one, is that they don't display them.  If your customers don't know you have gift cards, how the heck can they buy them?!

    2.) You give gift cards away. 

    This sounds kind of strange when you first hear it.  But how often do you get a call from some high school that needs something for their raffle?  Or from the boyscouts, who need a prize for something?  As a small business owner, you're bombarded by community groups who want you to give stuff away.  And the publicity is a nice trade off.  So why not give them a gift card?  

    The gift card will do 2 things for you.  It'll set a limit for what you're willing to give away.  And it will let you track the results.  Your POS system can alert you to which gift cards get used.  This is super valuable when tracking your marketing efforts. 

    But why stop there?  Why not give $10 gift cards to customers who spend $50 or more in your restaurant?  What does that $10 gift card represent?  It represents a customer who HAS to come back to your restaurant to use it.  You're guaranteeing return business, and for the price of $10! 

    So what Happened with Sandy?

    Well, after giving her this advice, she ordered 500 cards.  We actually made Sandy 2 different designs.  1 for customers in the store who need cards, and a second design for cards to give away!  She had such good luck giving cards away, that she needed to reorder those cards 9 months later! 

    I've been in the industry for years, and I'll tell you that for what gift cards cost, there's no better investment. Gift cards represent your brand, they're often reusable, and secure.  It's a great way to make your restaurant some more money this holiday season. 

     $160 Billion dollars will be spent on gift cards this year.  Restaurants account for about 35% of that.  Don't you want your piece of $56 Billion dollars?  

    About the Author:
    Cole Goebel is the Enterprise/Channel Manager for Plastic Printers in Minnesota. A leading plastic card providers for POS. Cole interfaces with POS providers to offer card directly to their customers. Cole Goebel is a POS Industry insider. He's an expert in encoding and barcode data, and has a great knowledge of POS integrations. Cole is also the writer and editor of his personal industry blog, and you can follow him here: Or on Linkedin:


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