How to Sell Gift Cards: The Evergreen Guide for Restaurants

Learning how to sell gift cards effectively can prove a boon for your restaurant’s business. During your restaurant’s slow season and annual holidays, gift cards become a crucial revenue stream. 

The gift cards not only provide additional earning potential but also increase loyalty among new and existing customers, which creates a win-win for everyone involved. Let’s look at how to create an evergreen gift card sales system.

Setting Up Your Online Gift Card Sales 

The first step to achieving online gift card sales is developing a gift card strategy to launch your restaurant’s online store. Start by choosing the best platform and tools to sell gift cards online.  

When it comes to selling gift cards online, Paytronix stands out due to our suite of tools and seamless integration capabilities. In fact, with Paytronix launching online gift card sales have never been easier.   

We offer robust features that cater to restaurants’ core business growth and marketing needs. You’ll enjoy easy setup and efficient management of gift card sales. Our platform offers 500+ integrations, 30+ of which are POS integrations, creating a unified experience for both businesses and customers. Additionally, our analytics tools provide valuable insights to help you make informed decisions and drive success. 

With Paytronix you can track sales, manage inventory, and analyze performance, all in one convenient place. It acts as a powerful solution for driving revenue while enhancing customer loyalty through gift card programs. Once you have your platform set up, it’s time to apply your digital marketing skills to spread the word about your restaurant’s gift cards.  

 Marketing Tactics to Boost Online Sales 

Developing effective digital marketing tactics to boost online sales is the key to success.  By implementing the right strategies, you can significantly increase your revenue and customer base. 

• Use Social Media to Promote Gift Cards 

Social media is a valuable tool to reach existing customers and attract new ones. You’ll want to use platforms such as Facebook, Instagram, and TikTok to promote your restaurant’s gift cards, create a brand voice, and personalize your services. Also, always take the time to post engaging content that highlights the benefits of your restaurant’s gift cards. When posting, use high-quality images, videos, and testimonials to show what makes gift cards perfect for all occasions.  

• Launch Well-Timed Email Campaigns  

Use email campaigns to remind your customers about your gift cards, especially around holidays or special events. For example, send out a campaign a week before Mother’s Day, offering a 15% discount on gift cards. Share special discounts and promotions in email blasts to increase interest and sales, such as "Buy one gift card, get one 50% off" during the holiday season. 

Tailoring Gift Card Offers for Restaurants 

Promotional customized strategies for restaurant gift cards can prove successful. Many variations exist on how to spread the word about your restaurant’s cards. 

• Create Themed Gift Cards  

Customizing gift cards for a unique dining experience can make them more appealing and special to your customers. Create themed gift cards for special occasions like birthdays, anniversaries, or holidays. Valentine's Day, New Year's Eve, Christmas, and Thanksgiving are all popular holiday themes for restaurant gift cards.  

According to the Restaurant Gift Card Sales Report by Paytronix, restaurants saw a significant increase in gift card sales, especially during the holiday season. While the total value of cards sold is up approximately 1.4% year over year, the quantity of gift cards sold in 2022 dropped by 5.1% compared to 2019 and by 10.7% from 2021. 

However, digital gift cards saw a 77% increase in sales value since 2019 and a 4.6% increase since 2021, highlighting the growing importance of digital options. These stats drive home the importance of embracing holiday-themed gift cards to increase sales. 

• Showcase the Seasons  

Another idea is a "Seasonal Tasting Menu" gift card, where recipients can enjoy a special multi-course meal available only during certain times of the year. This not only adds value but also creates a memorable dining experience that encourages repeat visits and word-of-mouth referrals.

Offer an "Oktoberfest Feast" gift card, which includes a multi-course meal featuring traditional German dishes like pretzels, bratwurst, schnitzel, and apple strudel, paired with a selection of local and imported beers. This special menu, available only during Oktoberfest, provides a festive and authentic dining experience that stands out and attracts customers looking for seasonal specialties.

• Provide a One-of-a-Kind Experience  

To stand out, small-to-medium restaurants can offer unique experiences and incentives. For example, create a "Chef's Table Experience" promotion where purchasing a high-value gift card includes an exclusive dining experience with the chef, complete with a personalized menu and wine pairings.

• Offer Tiered Value Gift Cards  

Offering tiered value cards can encourage higher spending. For example, a $100 card might come with a free dessert or appetizer. These small incentives can make your gift cards more appealing. Here are three examples: 

1. $50 Gift Card: Comes with a complimentary drink or dessert. 
2. $100 Gift Card: Includes a free appetizer or a discount on the next visit. 
3. $200 Gift Card: Offers a complimentary entrée or a special dining experience. 

These incentives not only make the gift cards more attractive to buyers but also encourage repeat visits, increasing overall customer loyalty. 

• Cross-Promote Gift Cards 

Build strong community relations by partnering with local businesses to cross-promote your gift cards. For instance, offer a discount on your gift cards when purchased at a local event or market. This strategy not only promotes your restaurant’s gift cards but also gets the word out to the locals. When residents and your neighbors start talking about your establishment business can start to boom.  

• Using Reward Dollars with Loyalty Programs 

Offering reward dollars based on specific user actions through your restaurant’s loyalty program is a fantastic way to deepen customer engagement and drive repeat business. By providing rewards, bonus gift cards, points, or special discounts based on specific purchases (or a total purchase volume), you incentivize customers to keep choosing your brand (and therefore gift cards) over others.  

Linking gift card usage to your loyalty program strategy allows customers to earn points every time they redeem a gift card. This strategy not only boosts gift card sales but also strengthens long-term customer loyalty.  

Think diligently about whether or not it’s worth offering loyalty points during both gift card purchase and redemption. Offering one or the other is best, because otherwise your buyers become accustomed to collecting points too easily. 

How to Sell Digital Gift Cards 

Enhancing customer convenience through digital gift card sales is crucial. Paytronix leads the market with its advanced digital gift card solutions, offering effective security features and seamless user experiences. Platforms like GiftUp and Square also provide effective digital gift card options, ensuring protection against fraud and unauthorized use. Leveraging these technologies not only boosts sales but also significantly improves customer satisfaction by offering a secure, seamless purchasing experience. 

Mobile gift cards can seamlessly integrate with your restaurant’s current app, loyalty program, and online ordering system. Provide the ability to recharge gift cards digitally via a mobile app.  

This integration enriches the customer experience and improves the likelihood that buying from your restaurant is accessible to your guests. 

Marketing digital gift cards has never been easier because most people rely on the internet and social media to learn about promotions, sales, and other deals. With the increasing shift towards online shopping, digital gift cards have become more accessible and popular than ever before. Here are eight ways to garner more attention for your digital gift card sales and marketing campaigns:

1. Use targeted advertising campaigns to promote digital gift cards.  
2. Collaborate with influencers or local celebrities to increase visibility.  
3. Offer incentives like reward dollars for customers who purchase digital gift cards. 
4. Use email marketing to send targeted, personalized offers and updates to your loyal customers, boosting engagement and driving repeat business. 
5. Feature detailed customer testimonials and reviews on your website and social media, highlighting positive experiences and providing measurable outcomes to build trust and credibility. 
6. Partner with local businesses to offer bundled deals that include digital gift cards from both establishments. 
7. Host online contests or giveaways where participants can win digital gift cards by engaging with your social media content. 
8. Make the purchase process seamless by integrating digital gift cards with your restaurant's mobile app and website. 

How to Sell E-Gift Cards 

In today’s internet age, selling e-gift cards often proves easier than physical gift cards. 

4 benefits of eGift cards include: 

1. Cost-effective: eGift cards eliminate printing and shipping costs, reducing overall expenses.  
2. Broader reach: They can be purchased and sent instantly, reaching a global audience.  
3. Greater flexibility: eGift cards can be personalized and easily tracked, offering convenience for both customers and businesses. 
4. Last-minute purchases: When you’re running late to a party and realize you forgot to buy a present, eGift cards are your ace in the hole. Tap a few buttons on your screen, customize the design, and send it to your recipient. 

Showcase the above benefits to effectively sell e-gift cards. Also, let potential buyers know that e-gift cards offer more customization options. Customers can personalize e-gift cards with messages or images, which may make them more appealing. 

Other effective sales techniques for e-gift cards include the use of cross-promotional tactics with other digital services. For example, offer a discount on an e-gift card with the online purchase of a meal.

Frequently Asked Questions About Selling Gift Cards 

Why do restaurants sell gift cards? 

Restaurants sell gift cards for a variety of reasons. Gift card sales generate upfront revenue and boost overall sales. During certain giving seasons, such as the winter holiday season, the increase in sales helps with cash flow and provides another sales channel. This is especially important during slower seasons.  

Gift cards offer convenience for customers. It’s easy for them to use gift cards as a thoughtful and hassle-free present. Most restaurants already offer gift cards so businesses who don’t offer them are at a disadvantage compared to competitors. 

Gift cards attract new customers. When recipients visit a restaurant, it could be their first time visiting a restaurant. This initial exposure could lead to long-term customer relationships. 

Customers often spend more than the gift card value when redeeming gift cards. This leads to increased ticket sizes. Sadly, some gift cards become unwanted gift cards, which leaves restaurants with leftover funds from unused balances. 

What happens to customer gift cards when a restaurant closes? 

When a restaurant goes out of business, it might have a deadline for customers to use their gift cards by for the funds to be honored. Purchases made after that deadline may not be allowed using the gift card as a form of payment.  

If a restaurant suddenly closed without notice, customers who hung on to their gift cards would not be able to redeem them. If the gift card is a multi-restaurant gift card, customers could redeem the gift card at other participating restaurants. 

Sometimes, a closing restaurant makes arrangements with another restaurant that partners with them to accept the gift cards. For example, Fred’s Bistro is going out of business and works with Diana’s Pizzeria to accept Fred’s Bistro gift cards after Fred’s goes out of business for a set amount of time. Part of the partnership might be giving some of the revenue to Diana’s Pizzeria and for Diana’s to have an opportunity to acquire some of the customers Fred’s had.  

What percentage of restaurant gift cards are redeemed? 

Gift card redemption rates vary by segment and individual restaurant, but about 56.11% of gift cards are redeemed within the first 180 days of purchase, according to the latest data (Moneyzine). Customers tend to redeem digital gift cards faster, with an average redemption rate of 16.8 days compared to 35.3 days for physical gift cards. 

A significant portion of gift cards remain unspent. Up to 47% of American adults reported having at least one unused gift card in their possession (Spectrum Local News). The average unused gift card balance is $187, leading to an estimated $23 billion in unspent money. 

Redemption rates also depend on the type of restaurant offering the gift cards. Fast-casual restaurants often see higher redemption rates due to their frequent customer visits and lower price points, while fine dining establishments may experience longer redemption timelines. 

Seasonal trends, including major holiday sales, also impact when and how gift cards are redeemed. For instance, cards purchased during the holidays may not be used until months later, as recipients wait for special occasions to redeem them. 

What can I do with unused restaurant gift cards? 

Customers have several options when it comes to unused restaurant gift cards. In an ideal world, they would use all of their gift card balance before it expires. If customers don’t want to use the gift card, they can regift the gift card to someone else or use platforms like CardCash, Raise, or Gift Card Granny to sell it or trade it for a restaurant or retail store they prefer.  

Nonprofit organizations accept gift cards as donations. It could count as a tax-deductible donation. If the gift card will expire soon, customers can request the unused balance transferred or combined with a new gift card.  

Some US states require businesses to honor expired gift cards or refund balances under specific conditions. Other states like Illinois, Connecticut, Florida, and California don’t allow gift card expiration dates to begin with. Restaurants operating in these jurisdictions should be familiar with the laws governing gift card sales. 

Are restaurant gift cards taxable income? 

Gift cards are generally not considered taxable income for the issuing restaurant at the time of sale. New gift card sales are treated as a liability because of the restaurant’s obligation to provide goods or services when customers redeem gift cards.  

Gift cards are recorded as deferred revenue or a liability on the restaurant’s balance sheet and taxable income is not recognized until the gift card is redeemed. When the customer redeems the gift card, it is recognized as revenue and taxable income.  

For unredeemed gift cards, tax treatment depends on applicable laws in the restaurant’s jurisdiction and state. This is known as breakage. Some jurisdictions allow the restaurant to recognize breakage as revenue after a certain amount of time passes or it expires. 

Sales tax isn’t charged when the gift card is sold. It’s applied when the card is redeemed, based on the foods or services purchased. 

The Bottom Line 

A well-managed gift card program leads to increased customer retention and higher average ticket sizes. It offers a steadier revenue stream and strengthens customer loyalty. Investing time and effort in your gift card program is a wise move to yield significant long-term benefits. Whether you’re selling physical, digital, or e-gift cards, the key is to tailor your approach to your audience and continuously innovate. 

To stay ahead of the competition, you need to continually promote your restaurant’s gift cards by evaluating and adapting your strategies to meet changing consumer demands. Keep your marketing fresh and relevant. Monitor the performance of your gift card sales and adjust your tactics as needed with the help of Paytronix.  

Ready to boost your restaurant's revenue with gift cards? Partner with Paytronix for seamless integration and comprehensive management gift card management and strategy tools. Start selling gift cards online, enhance customer loyalty, and drive sales year-round. Book a demo now to get started.