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Restaurants are pushing gift card sales, but consumers are slower to respond

Operators are counting on holiday gift cards to boost revenue but sales are down.
Paris Baguette gift card
Photo courtesy of Paris Baguette

Sales of restaurant gift cards typically boom around this time of year—they make a safe, easy and universally-appreciated holiday present. But so far, sales are down considerably from 2019, according to data from Paytronix Systems, a guest experience platform.

Year-over-year gift card sales declined 30% over the Black Friday weekend following Thanksgiving, which traditionally acts as a barometer for the holiday season, Paytronix reported. 

Limited-service restaurants actually fared better than the full-service sector. QSRs and fast casuals either held steady with 2019 gift card sales or saw an increase in spend over last year. And while sales in quick service fell by 3.6% on Black Friday, the amount loaded onto those cards increased by 4.6%.

Fast-casual sales were mixed, with some concepts showing declines and others tripling sales, spurred by hefty bonus offers.

“The more upscale the restaurant, the greater the decline we saw in gift card sales during the Black Friday shopping weekend,” said Lee Barnes, Paytronix head of data insights.

No doubt the uncertainty and stress surrounding restaurant dining during a pandemic has something to do with it. But consumers still seem to be bullish about restaurant gift cards, according to the National Retail Federation.

Data released from the NRF last month indicates that 29% of gift card shoppers plan to purchase a card for a restaurant—the highest of any category. Restaurants beat out department stores (28%), Visa/American Express/MasterCard (26%) and coffee shops (20%).

Restaurants in every sector are still counting on gift card sales to bring in some revenue this holiday season, with many chains offering perks to drive purchase.

Carrabba’s Italian Grill is offering a $10 bonus card with every gift card purchase of $50. There’s an option to customize the card with a photo. The gift cards do not expire, but the bonus card must be used between Jan. 1 and Feb. 7, 2021.

Outback Steakhouse, Carrabba’s sister concept, launched drive-up gift card shopping through a new curbside concierge service. The chain has created designated gift card pick-up spots in its parking lots, and arranged to have an employee come to the car to complete the purchase. Several designs are available, along with a card that features country music singer/songwriter, Jake Owen.

Capitol Grille is gifting purchasers with an “exclusive” knife set plus a 10% discount card if they purchase $500+ in gift cards. In keeping with its upscale status, consumers can opt for a $1,000 stainless steel gift card that’s shipped in its own leather box.

Paris Baguette jumped into gift cards for the first time this year. Starting on Monday, guests can purchase the cards in any denomination at one of the bakery cafe’s 80 locations or through the Paris Baguette Rewards app. The cards are available in four designs.

TooJay’s Deli gift cards are being promoted as “perfectly timed for post-holiday saving,” since they must be redeemed by Feb. 28, 2021. But for every $25 card purchased, the customer receives a $5 bonus card that can be used anytime.

Tijuana Flats also is trying to boost post-holiday sales with its gift card program. Guests who purchase $25 in gift cards get $5 in bonus bucks; $50 earns back $15. But the bonus bucks expire on Feb. 28.

Del Taco brought back its holiday gift card freebie program for 2020. Guests who purchase $15 in gift cards card in-store receive two free grilled chicken tacos; $25 earns four tacos. Online shoppers get a free combo meal with the purchase of a $30 eCard; four free combos with a $100 purchase.

BJ’s Restaurant & Brewhouse is running its eGift program through Jan. 1, but on Cyber Monday, the chain offered freebies with a purchase. Customers who bought $50 cards received a $15 BJ’s bonus card, and those purchasing $100 cards got a $30 bonus card and a 20% off VIP card.  

Sweetgreen is promoting its Impact Outposts program that helps support food-insecure families through holiday gift card sales. For every card sold, the fast casual will donate a meal.

Many independent restaurants are also offering gift cards or gift certificates this holiday season, hopeful for a future when their dining rooms can fill up once again. Most cards have no expiration date, allowing customers to satisfy their pent-up desire to return to restaurants at their convenience.

 

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