Pizza Today - September 2022 - 28

$50 card for $40, or throw in an extra $5
card with purchase. These small-denomination
gift cards are very likely to plant
the seed of a bigger purchase, whether
they are used by your loyal customer or
passed on. Either way, you are engaging
your customer by demonstrating your
appreciation.
Gift cards can boost sales. " One of the
top benefits of implementing a gift card
program is maximized sales, " says Mehta.
" Historically, Square has found that
17 percent of transactions where a gift
card is used result in overspend, creating
an opportunity to drive incremental
revenue and sales. " When the customer
doesn't spend over the value of the card,
they might well spend under the value,
encouraging them to return to use the
remaining balance. At that time, you
might see them overspend.
How to Prepare for Gift Card
Season
If you are launching a new gift card
program, Seshu Madabushi, founder and
CEO of M-Konnect, proposes a series of
questions to ask yourself. " What kind of
gift cards do you want to have? Do you
want a physical gift card or an electronic
gift card? Can they be redeemed online
or only in-store? Can your point-of-sale
(POS) system accept physical gift cards?
Can your online ordering system accept
your digital cards? " He advocates starting
early so you can make informed choices.
Mehta suggests that " the best way to
prepare for gift card season is to make
sure you're offering both physical and
e-gift cards so your customers have a
choice. When stocking up on gift cards,
restaurants should make sure they have
different designs, such as a customized
gift card with your business logo, birthday,
or holiday, among other things. "
Familiarize yourself with the types
of gift cards available: electronic vs.
physical; bar code vs. magnetic strip;
reloadable vs. not reloadable. Compatibility
with your POS system should
be your first priority. Consult with your
provider to ensure a frictionless experience.
It's important that transactions go
smoothly to maximize convenience for
the customer.
" Every business should have a
360 view of their operations, and gift
cards are included in this, " observes
Mehta. " It's important for restaurants to
use integrated solutions that seamlessly
work together. This removes the need to
piece together hardware and software
that don't work together, and ultimately
cause more work. By running your
restaurant all through one centralized
platform, businesses can better understand
how they're performing, areas of
improvement and necessary changes to
make. "
Promoting Your Gift Cards
Train your staff to engage in active but
low-pressure promotion. Make it crystal
clear in every available channel that you
offer gift cards, including your menu,
website, table tents, e-mail communications,
social media campaigns, and at the
register and hostess stand.
Incentivize your staff by rewarding top
sellers or reward the whole staff when
you hit a certain target of gift card sales.
Present a gift card as a prize.
Madabushi at M-Konnect suggests
partnering with local entities such as
schools, PTAs, scout troops, youth organizations,
sports teams, realtors, churches
and apartment managers. Offer them
bulk gift cards at a discount to provide
as prizes, incentives and rewards to their
members and customers.
New Opportunities with Gift
Cards
" Surveys on gift-giving found that a
large portion of Americans preferred to
receive cash over other presents, " according
to Mehta at Square. " Last year, gift
cards continued to grow in popularity
and there's no sign of this trend slowing
down. "
Digital cards are particularly attractive
to the last-minute shopper, who can
make a purchase in minutes on their
phone and deliver it cross-country at
lightning speed.
Madabushi predicts that this holiday
season, customers will be eager to return
to the experience of dining out with
friends, " so that's how I'm looking at gift
card positioning for this year specifically. "
However, public health circumstances
might compel a spike in takeout this
winter, so make sure your cards are versatile
for both in-person and online use.
Square has noted increased self-use of
gift cards. According to Mehta, " last year,
around a third of gift cards purchased
from Square merchants were for self-use
as consumers now use gift cards as a
budgeting tool to keep track of finances. "
Financial Implications of a Gift
Card Program
Gift cards can boost cash flow for restaurants.
Many establishments promoted
gift cards heavily during the peak of the
pandemic as a tool to cover immediate
operating costs so they could endure the
hardships of the shutdown.
It's also worth noting that a certain
number of gift cards are never redeemed.
According to USBank.com, three to
five percent of total gift card value goes
unspent.
Madabushi from M-Konnect reminds
operators that they need to make sure
their accounting systems are prepared for
the interval between sale and redemption.
" From an accounting standpoint, if
you are a publicly-traded company, it's a
kind of a debt which needs to show on
your financial statements. But for most
mom-and-pop restaurants, it doesn't
matter. " You may sell a thousand dollars
in gift cards in December, and there's no
cost of goods sold until they're redeemed,
" so you need to be prepared from a
financial standpoint as well. "
ANNELISE KELLY is a Portland,
Oregon-based freelance writer.
28 / PIZZATODAY.COM / SEPTEMBER 2022
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