Shortened Holidays Sales Season Takes Its Toll on Restaurant Gift Cards

Newton, MA– January 13, 2020 – Restaurants felt the impact of the shortened 2019 holiday sales season in their gift card sales, according to data from Paytronix Systems, Inc., the most advanced digital guest experience platform. The 2019 Christmas Shopping season had fewer days than 2017 or 2018, but over the long-term gift cards are still on the upswing, having experienced a significant rise during the 2018 selling season. Also, most shoppers pick up gift cards at the very last minute, so says data collected from nearly 200 brands during the time period from November 1 through December 31, 2019.

Overall, restaurants show declines in both the number of gift cards sold and in the dollar values of those cards. For the period between November 1 to December 31, 2019, Paytronix data reveals a 1.3% decline in cards sold, but only a .62% decline in dollar values sold when compare with the previous year. However, for the holiday season alone, from Black Friday to Christmas Eve, card sales were down 5.6% while dollar values were off by 5.8%.

However, while card sales are down from their 2018 peak, that year saw a 15% increase in card sales versus the 2017 holiday season. What’s more, 2019 sales still outpaced those in 2016, which is significant given that those two selling seasons were closer in length.

“The lesson here is that every day of the holiday season counts. Gift cards sell more during the holidays than any other time of year. In fact, you can almost see the panic in the buyers faces on the graph, which shows a last-minute spike this year that exceeds the previous three years,” said Michelle Tempesta, head of marketing for Paytronix Systems. “These cards kick off a cycle for the coming year that means great business. The majority of cards are likely to be used in the first two months of 2020, then it’s about capturing those guests and keeping them loyal.”

Other external factors can also affect gift card sales. During the first weekend of holiday sales, directly following Black Friday, a weather system that blanketed most of the country in snow and rain depressed sales on Saturday, even as Friday and Sunday showed sales increase. This resulted in a 10% drop in Black Friday gift card sales as compared with 2018.

This research supplements the Paytronix Annual Gift Card Sales Report: 2019, which surveyed 220 brands and found consistent 10 percent year-over-year growth in gift card sales over 2018. Paytronix offers an in-depth look into holiday gift card sales, sales by channel and service type, anticipated redemption and new insights on eGift cards. With the online ordering industry expanding, the Report also examines the impact of gift cards redeemed online.

Methodology

Following trends in closed-loop restaurant gift card sales, the Paytronix holiday gift cards research includes data from gift card sales between November 1, 2019, and December 31, 2019, and includes 197 brands. The majority of the brands, 116, are full-service restaurants (FSR), 24 identify as fast casual (FC), 22 fit multiple categories, 14 are quick-service restaurants (QSR), 14 identify as fine dining and seven don’t specify a type. Regionally, the vast majority of stores, 95.32%, are in the United States.