Gift-giving can be a daunting task. That’s why so many Americans rely on gift cards. By the end of 2018, it’s predicted that $160 billion in gift card sales will be made, $11 billion more than 2017. Small and mid-size restaurants, cafés, bars, ice cream shops, and pizza parlors should all be taking advantage of a gift card program through a restaurant POS system.
Understandably, restaurant owners may feel reluctant about associating gift cards with their business; because they worry it will be like offering discounts. This is completely false; there’s a higher level of acceptability and perception associated with gift cards, compared to coupons or other discount initiatives.
Plus, there is nearly zero loss on a redeemed gift card since it’s usually paid for in full, and it does not directly impact the price of anything on your menu.
Below, we reveal how gift cards present restaurants with more opportunities to upsell and a few guidelines to follow.
Gift Cards Encourage Indulgent Spending
When someone gets a gift card, it becomes a chance to treat oneself. One study on the psychology of gift-giving and -receiving reveals that people view their gift cards as excuses to indulge. Paying with a gift card feels is basically paying with someone else’s money, and this spurs consumers to forego mundane purchases for more extravagant ones.
So, what does this mean for your restaurant…? Options for upselling! Train your front-of-house to upsell customers throughout the meal gently.
Typically, servers have the easiest time upselling drinks. Instruct the FOH to introduce the holiday cocktail list or a special bottle of wine that’s available, but not to persist in a way that grates on customers.
Subtlety is the key to successful upselling. Rather than trying to sell the price reductions, direct servers to highlight the unique and special qualities of whatever item is being upsold, whether it’s the daily menu special to a long drink. Below are some examples of attractive qualities to convince diners with:
- The sourcing location of the ingredients. Is the beef grain-fed or from a local farm? Is the vegetable seasonal produce? Is there an unusual cooking method or spice the chef is trying for the first time? Remarkable details like these make a menu item more attractive in the eyes of the customer.
- Why the wine will go well with their dinner, to sell more expensive wines, train your FOH in the perfect food pairings. Customers enjoy wining and dining and especially learning ways to enjoy wine. With a well-placed recommendation for wine, customers will appreciate the suggestion and hold the entire restaurant establishment in higher esteem. In return, you gain a new loyal customer and a higher bill.
- Dessert—10% of customers always order dessert. With the right dessert suggested in the right way, your serving staff can increase that rate.
One important message to relay to staff is that upselling is not only about increasing the overall bill total but also to satisfy the whims of your customers and anticipate their needs. At the end of a special meal, customers that pay with gift cards are, hopefully, inspired to come back for another meal with their own wallet.
Additionally, gift cards play a huge role in converting first-time or infrequent customers into loyal patrons. Every table is an opportunity to impress guests and build a lasting, loyal following. There’s a reason some restaurants have a legendary reputation, and that’s mainly because the clientele was devoted to the establishment.
If you are just getting started with gift cards, here are three points to consider:
- Don’t give an expiration date. Because gift cards are treated like cash by the recipient, it means there’s always a possibility someone will come a long time later. Even if years passed, a gift card should always be honored.
- Consider offering gift cards of different dollar levels, which should include amounts above your check total. If your average check is $25, consider also including $50 and $100 increments. Thus translates to more upfront revenue for your business with a great chance that the more expensive gift cards will have leftover cash on the card, leading to subsequent visit(s).
And if the amount they have left over isn’t enough for a full meal, they’ll have to shell out some cash to balance up, meaning that you get some new revenue coming into your restaurant. If you’re using a gift card system where any amount can be put in at the gifter’s discretion, train your FOH person to always look for opportunities to upsell to a higher increment.
- Make setting up a gift card easy for your staff. Add gift cards as a menu item; this gives servers the freedom to load or reload gift cards in minutes. On the Lavu POS, balances can also be looked up immediately when guests want to see how much money is left. See how to order custom-design restaurant gift cards here.
- See the possibilities for word-of-mouth. When a customer orders a gift card, your team and you should celebrate the moment. This reveals how much the diner likes your restaurant, and it says that he or she wants to share the experience with family and friends. Not only do you have their trust, but you are also getting new customers. Focus on giving great service.
Other Seasonal Promotions
Gift cards can be used year-round and encourage repeat business. However, other seasonal promotions can boost your efforts. Choose another seasonal loyalty program that would be appealing to your customer base:
- To encourage group dinners: For every five people that attend, the sixth meal is free. (Ideal if serving a pre-fixed menu.)
- To promote seasonal specials: Mark seasonal dishes half-off during happy hour, or Holiday Hour.
- To encourage return visits: Diners receive $20 gift cards for every $100 spent.
- To bring in more families: Invite children to dine at the house between 5 p.m. and 7 p.m.
- To attract all customer types: Promote a Holiday Week and give discounts for seven days. It could be a certain percentage off the menu or a discounted holiday menu with special dishes.
- To build loyalty: Offer guests a discounted coupon redeemable on their next visit, after January 1, 2019.
With gift cards and seasonal promotions, your restaurant can flourish. Since you can expect more customers, prepare your staff to handle the demands with ongoing training sessions.
Before you fully incorporate gift cards into your restaurant business, you need to determine how to keep track of all gift cards purchased. There are various methods to achieve this, Lavu POS being one of the better options for monitoring transactions and processing credit cards, in case you decide to go with a POS system.
Many restaurant owners are of the opinion that without a POS system, gift cards will not work – this is a common false assumption. There are other options to choose from, both automated and manual track method; however, a POS method makes it easier and safeguard against future modifications.